how do you insure funds in your trading account?

aeliodon · Sep 29, 2008

What is the minimum amount of investment in T-Bills? Are they sold in 100k "lot" sizes?

theboxer · Sep 29, 2008

Quote from cszulc:

Counts as 95% cash.

Instead of having $100,000 to trade with (in cash), you'd have $95,000 available to trade with while earning interest on the T-bills worth $100k.

Holy shit, that's a good idea. Is that only for futures accounts?

wiseass · Sep 30, 2008

so if i have a futures position open and all of a sudden i find out my broker has gone under. what happens then?

Specterx · Sep 30, 2008

SIPC insures accounts up to $100k in cash and $500k in securities, though securities can only be "lost" if your broker is doing something illegal. When you buy a stock or a futures contract or whatever it's in your name, not the broker's.

IB has additional private insurance for up to $1.5m in cash, I think.

dandxg · Sep 30, 2008

Quote from wiseass:

so if i have a futures position open and all of a sudden i find out my broker has gone under. what happens then?

What should happen is the CFTC would arrange sale of insolvent broker to new broker as in Refco futures to Mann Global. They would transfer your position. I would be more concerned if the bank that holds your supposed segregated account flops.

Traber · Sep 30, 2008

I'm learning a lot in this thread.

Keep it going

jeb9999 · Sep 30, 2008

Quote from Specterx:

SIPC insures accounts up to $100k in cash and $500k in securities, though securities can only be "lost" if your broker is doing something illegal. When you buy a stock or a futures contract or whatever it's in your name, not the broker's.

IB has additional private insurance for up to $1.5m in cash, I think.

SIPC does not cover futures contracts.

Stock at a broker is held in street name not your name.

Customer securities accounts at Interactive Brokers are protected up to $30 million (including up to $1 million for cash).

jeb9999 · Sep 30, 2008

Quote from wiseass:

so if i have a futures position open and all of a sudden i find out my broker has gone under. what happens then?

It is not the futures broker you have to worry about, it is the clearing firm that holds your cash and positions. In the past customers of clearing firm failures have been eventually made whole, but your account could be frozen for days to months.

Bernard111 · Sep 30, 2008

Quote from dandxg:

I would be more concerned if the bank that holds your supposed segregated account flops.

Often the bank that holds the segregated funds is different according to the currency you open the account with your broker/ FCM: so are foreign currencies deposited in a US-based futures account protected at the same way as in USD?
:eek:

dandxg · Sep 30, 2008

Quote from Bernard111:

Often the bank that holds the segregated funds is different according to the currency you open the account with your broker/ FCM: so are foreign currencies deposited in a US-based futures account protected at the same way as in USD?
:eek:

I am not sure as I am a US citizen holding only USD at this point. I wouldn't think they holding bank would be different because on the wire instructions I have only seen one?