At what point do you millionaires split up your funds and manage different brokerage accounts?

[Maverick2608]

what -

e.g. IB covers additional $30m... Fidelity covers $1b, why is this irrelevant..

IB's Insured Bank Deposit Sweep Program allows IBKR clients to obtain up to $2,500,000 of FDIC insurance in addition to existing $250,000 SIPC coverage for total coverage of $2,750,000.

Fidelity covers USD 1 billion for 29.6 mio. accounts = 34 USD per account?

 

[Specterx]

If this Futures trader wants to keep his funds fully invested as he has experienced an unexpected windfall with his Futures trading....does he leave it all at AMP for example? Do I suggest to him to put some at IB?..Dorman?...what if he leases his own seat at the CME?...do those retail firms accomodate him?

I am surprised I cannot point him to a thread here...this is EliteTrader right?

IMO:

1. Keep all funds needed for active trading with the safest broker you can find.

2. Have a separate investment / reserve account with another broker (ideally a TBTF institution) which you use to warehouse long-term holdings, and as an alternative emergency route into the markets - eg if your main broker goes down and markets are crashing, you can hedge any holdings in your primary account.

3. Once you've "gotten rich once" and built substantial wealth, keep most it in safe offline forms that won't vanish if a broker collapses, gets hacked or records wiped etc. - such as real estate or directly purchased Treasury securities. Spare cash can be spread around various banks to stay under FDIC limits.

 

[dozu888]

Excess of SIPC
In addition to SIPC protection, Fidelity provides its brokerage customers with additional "excess of SIPC" coverage. The excess coverage would only be used when SIPC coverage is exhausted. Like SIPC, excess protection does not cover investment losses in customer accounts due to market fluctuation. It also does not cover other claims for losses incurred while broker-dealers remain in business. For example, fraud claims would not be covered if the brokerage firm was still in operation. Total aggregate excess of SIPC coverage available through Fidelity's excess of SIPC policy is $1 billion.

I just checked with Fidelity... $1b is PER CUSTOMER.

 

[dozu888]

IB's Insured Bank Deposit Sweep Program allows IBKR clients to obtain up to $2,500,000 of FDIC insurance in addition to existing $250,000 SIPC coverage for total coverage of $2,750,000.

Fidelity covers USD 1 billion for 29.6 mio. accounts = 34 USD per account?

$1B is per customer.

 

[comagnum]

P. S. Is there software to group trade them?

Good question - I have looked far & wide for this, and struck out. Come on software geeks, you could make millions - we need this product!

I use multiple brokers for a number of advantages: redundancy, finding shares to short, access to more IPO's, access to more diverse technology & products, and it saves me $ since no single broker gives you the best deals across the board.

I am not a millionaire, definitely not a spooner & proud of it.

 

[ETJ]

As delicately as possible - BULLSHIT.

 

[Maverick2608]

Good question - I have looked far & wide for this, and struck out. Some prop shops have their own proprietary software to interface multiple brokers where they can enter from a single order.

I use multiple brokers for a number of advantages: redundancy, finding shares to short, access to more IPO's, access to more diverse technology & products, and it saves me $ since no single broker gives you the best deals across the board.

What is your impression of stock borrow rates across brokers? Is there wide disparity or do borrow rates reflect a common market borrow rate?

 

[ETJ]

$1B aggregate. The premiums for a billion per account would be $118 Billion.

No dollar limit per account, but a billion aggregate.

 

[Sig]

So first issue, SIPC insurance limits, is relatively easy. Just buy Treasuries in your name, you take a 5% haircut on buying power, and if they go under you just retrieve your Treasury and move on in a matter of days. On the margin rates, just sell a wide SPX box to get better lending rates than any broker, and you can do it at any broker.

 

[Sig]

IB's Insured Bank Deposit Sweep Program allows IBKR clients to obtain up to $2,500,000 of FDIC insurance in addition to existing $250,000 SIPC coverage for total coverage of $2,750,000.

Fidelity covers USD 1 billion for 29.6 mio. accounts = 34 USD per account?

Keep in mind the FDIC only covers cash.