How safe are my funds with a (US) futures broker?

"I think that attempting to document a false intent to invest in securities'

Thanks for your answer, but not sure where the above comes in - I actually do (now) invest almost exclusively in stocks through IB.
 
Quote from comintel:

Funds swept from futures account into stock account are not FDIC protected and not SIPC protected either unless used/intended to purchase stocks as per clarifications from IB, SIPC and NASD in last year.

To be SIPC protected, funds must be deposited for purposes of investing in securities as per the SIPC law. Idle cash swept from futures account does not meet this criterion.
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How would this be interpreted if one has funds in an all-in-one account, but they are used (thus far) exclusively for stocks and options?

I maintain the option to trade futures, forex and worldwide stocks in my IB account in case some great opportunity catches my eye, but thus far have only traded US stocks and options from that account.

Unclear and probably will be litigated in the event, or has SIPC clarified this point?
 
The USA is third worldish deregulated s$%t... Get a dual citizenship or marry a Canadian and park your $ in Canada. Canadians got their MFGlobal money back in a week, the US bagholders didn't. POS politicians are cannibalizing the US, same as Rome in it's latter days.
 
Quote from mokwit:

"I think that attempting to document a false intent to invest in securities'

Thanks for your answer, but not sure where the above comes in - I actually do (now) invest almost exclusively in stocks through IB.
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Well then you are covered.

This thread is about futures according to its title.
 
Quote from justrading:

How would this be interpreted if one has funds in an all-in-one account, but they are used (thus far) exclusively for stocks and options?

I maintain the option to trade futures, forex and worldwide stocks in my IB account in case some great opportunity catches my eye, but thus far have only traded US stocks and options from that account.

Unclear and probably will be litigated in the event, or has SIPC clarified this point?
More...

I see no problem. You are covered.

The issue was about futures traders, doing no stock trading, but trying to get SIPC coverage via sweeping of idle funds to a "securities" account that was otherwise inactive.
 
One of futures benefits: leverage. Allows you to keep only so much on the actual trading account but trade good size.
 
Quote from comintel:

I see no problem. You are covered.

The issue was about futures traders, doing no stock trading, but trying to get SIPC coverage via sweeping of idle funds to a "securities" account that was otherwise inactive.
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Thanks.

With no bona fide securities trading, I would expect claims would be denied.

For those who purely trade futures, I would suggest maintaining the bare minimum necessary in the brokers account, and even then if the amount is significant to you, spread it around 2 or 3 brokers.

Tedious to be sure, but infinitely preferable to losing it all through malfeasance or recklessness.
 
Quote from Eight:

The USA is third worldish deregulated s$%t... Get a dual citizenship or marry a Canadian and park your $ in Canada. Canadians got their MFGlobal money back in a week, the US bagholders didn't. POS politicians are cannibalizing the US, same as Rome in it's latter days.
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What does POS stands for? I only know it as Point Of Sales.
 
mokwit said:
With futures brokers it is made to look as if you have some kind of protection on casual inspection. Actually what can happen is if a big customer of a broker incurs a huge loss they can take (STEAL) the funds of the other customers to make up the loss to the exchange. Note, they don't go after the assets of the failed trader or brokerage seat executives owners, they can dip into other customer funds.

So now you know why big floor traders had pesky retail accounts.

Chicago is run for the benefit of the exchange members at the expense of customers IMO.

I had money with Refco and found out about the sham lookalike protection around that time having not read the small print sufficiently. My funds were in the CFTA side of things and that is what I am referring to above.

Lawyers contended that within the non CFTA side as the customers had received a return on their funds by effectively authorising Refco to invest on their behalf these CUSTOMER funds were therefore somehow Refco funds and could be used to pay creditors. IMO how does that fly other than with a tailwind of utter dishonesty and absence of integrity?
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So HOW do you get a seat on the exchange? Just out of curiosity.
 
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