How Safe are Interactive Brokers?

Quote from traderNik:

I finally switched to IB because I wanted to go to sleep knowing my funds up to $100K were protected by the Canadian government (CIPF). Businessman mentioned 'FSA' up to $70K in the U.K. Certainly no such protection exists in the U.S., as we saw during the Refco debacle.
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You are incorrect about the US protections. Securities accounts are insured up to $500K by SIPC. IB sweeps any funds not needed for your overnight futures margins into your insured securities account every night.

Refco was a pure futures broker which means they didn't have such an arrangement.

But beyond that I don't believe retail Refco clients lost any money. I could be wrong on this last point though.
 
Quote from Shreddog:

You are incorrect about the US protections. Securities accounts are insured up to $500K by SIPC. IB sweeps any funds not needed for your overnight futures margins into your insured securities account every night.
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Thanks for the clarification. Certainly there has been a lot of debate on here about which accounts at U.S. brokers would be protected in case of the sudden bankruptcy of the firm.

If, as you say, up to 500K is guaranteed by the U.S. government to be returned to IB account holders in case of fraud or other failures, then U.S. customers are actually doing better than Canadian customers, for whom the protection limit is 100K.
 
Quote from traderNik:

Thanks for the clarification. Certainly there has been a lot of debate on here about which accounts at U.S. brokers would be protected in case of the sudden bankruptcy of the firm.

If, as you say, up to 500K is guaranteed by the U.S. government to be returned to IB account holders in case of fraud or other failures, then U.S. customers are actually doing better than Canadian customers, for whom the protection limit is 100K.
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http://individuals.interactivebrokers.com/en/accounts/accountProtection.php?ib_entity=llc
 
Quote from Shreddog:

http://individuals.interactivebrokers.com/en/accounts/accountProtection.php?ib_entity=llc
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Interesting... since I'm a skeptic, I wonder what 'periodically' means...

available cash will be swept from your futures account to your securities account periodically

This is helpful to me since I did not know that cash ever resided in my 'futures' account. I thought that when I wanted to establish a futures position, funds were taken from my 'cash' account.
 
Quote from Shreddog:

You are incorrect about the US protections. Securities accounts are insured up to $500K by SIPC. IB sweeps any funds not needed for your overnight futures margins into your insured securities account every night.

Refco was a pure futures broker which means they didn't have such an arrangement.

But beyond that I don't believe retail Refco clients lost any money. I could be wrong on this last point though.
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This limit would apply to Penson Financial Services wouldn't it?
 
yes it applies to penson/ penson clears a ton of brokers. i'm so tired of worrying wether my brokers safe. its made me spread out my accounts among many brokers to keep under 100k cash. why the hell can't they just keep are money uninvested and pay us 0% interest. i'm sure we'd all give up a little interest money to have 100% safe money
 
Quote from hedgeking:

yes it applies to penson/ penson clears a ton of brokers. i'm so tired of worrying wether my brokers safe. its made me spread out my accounts among many brokers to keep under 100k cash. why the hell can't they just keep are money uninvested and pay us 0% interest. i'm sure we'd all give up a little interest money to have 100% safe money
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I agree with you that we would give up a little interest to have 100% safe money BUT the difference between 0% and 4%+ is IMHO not a LITTLE interest.

On another note, you could sell some EFPs and get synthetic interest by buying the stock and shorting SSFs. at 50 cents a pop it seems that you can earn a higher rate and also be invested more fully.
 
Quote from dabao91:


IB is ranked number one almost every year for financial soundness by the NFA.


It is nice to know that.

Would you mind to post a URL link (or some thin else) to support your statement?
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I have no idea where that may be listed on the net. Try IB's website. Last time I read a ranking it was via Futures magazine. IB was way out front.

BTW, I do not believe futures traders at Refco lost funds. Those accounts were sold to another broker, which usually happens except when fraud is involved (ie stealing customer funds). The FX guys got nailed.
 
I am from Thailand. Am I entitled to the $500k protection offerred by US government? Does the 500k protection includes traders who trade futures and options but not stocks??

And, is it quite safe to have 100k with Interactive Brokers?

Thanks for any replies.
 
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