IB or Thinkorswim in terms of security of funds
- Thread starter tyrant
- Start date
You seem to be asking questions that IB went into detail at the link you were provided. Did you read the link???
Further, you are able to do a search on brokerage filings. You can find listing of firms according to net capital for example filed with the SEC, or with the CFTC, at which IB stands quite high. You can google it.
But let me just say that SIPC covers you up to $100K cash. If you're planning to use more cash than this, then I would be planning to put some of it into some type of security (a treasury security for instance) that is covered up to $500K. Beyond this and you take a risk that something happens that you insurance doesn't cover. For money beyond these limits you should think of other alternatives. To me, Think or Swim wouldn't even be on a short list.
IB does have supplemental insurance with Lloyds. But this insurance is aggregated across all accounts. I don't have a means of evaluating this insurance...and therefore personally I assume it doesn't exist at all. When IB decides to provide detailed information about the insurance then I may reevaluate.
OldTrader
old trader you're incorrect. i have accounts at both and feel very safe at either. tos clears threw penson who holds your money. penson clears for a min of 200 broker dealers and is one of the biggest independent clearers and carries additional ins above sipc. penson has $5 bil in customer funds which is as big or bigger than what ib has. but penson is just a clearing house which has much less rev than a ib. i think you're safe with either one
From the TOS website:
"Account Protection
At thinkorswim, we offer total securities account equity protection of $35 million. As a member of the Securities Investor Protection Corporation (SIPC) funds are available to meet customer claims up to a maximum of $500,000 in cash and securities with a $100,000 cash maximum. Additionally, our clearing firm holds Excess SIPC Insurance of $200,000,000 in the aggregate, over all customer accounts, subject to a maximum limit of $900,000 per customer in respect to cash. This "Excess SIPC" protection is in addition to the protection provided by the Securities and Investors Protection Act, which is administered by SIPC and is subject to certain conditions and limitations, details of which are available upon request. Note SIPC and Excess SIPC provide coverage against loss of securities and cash, not against market depreciation, fluctuation in market value of your securities or a trading loss.
SIPC and AIG provide coverage against loss of securities and cash, not against market depreciation, fluctuation in market value of your securities or a trading loss."
"Account Protection
At thinkorswim, we offer total securities account equity protection of $35 million. As a member of the Securities Investor Protection Corporation (SIPC) funds are available to meet customer claims up to a maximum of $500,000 in cash and securities with a $100,000 cash maximum. Additionally, our clearing firm holds Excess SIPC Insurance of $200,000,000 in the aggregate, over all customer accounts, subject to a maximum limit of $900,000 per customer in respect to cash. This "Excess SIPC" protection is in addition to the protection provided by the Securities and Investors Protection Act, which is administered by SIPC and is subject to certain conditions and limitations, details of which are available upon request. Note SIPC and Excess SIPC provide coverage against loss of securities and cash, not against market depreciation, fluctuation in market value of your securities or a trading loss.
SIPC and AIG provide coverage against loss of securities and cash, not against market depreciation, fluctuation in market value of your securities or a trading loss."
From the 10-Q's ending 03/31/2008:
Penson Payable to customers $3,616,755,000
IB Other payables: Customers $7,489,834,000
Penson does not state Customer Equity
IB Customer Equity (in billions) $9.2
Penson has shareholder equity of $269,479,000
Consolidated equity of IBG LLC grew from $2.97 billion at March 31, 2007 to $3.97 billion at March 31, 2008.
Penson pretax profits $12,931,000
IB total pretax profits $373,953,000
IB brokerage pretax profits $57,800,000
You are safer with IB.
I think I have made up my mind to go full blast with IB. I hope I am not wrong with this "trade". this type of trade can be the most important. i will not even diversify to other brokerages as Buffett says "too much of a good stock is wonderful!" I do hope that IB will continue to improve on their credit and security controls as you can't be too careful with these things. Safety of funds come first. Without that, eveything else is moot.
Yes.