IB or Thinkorswim in terms of security of funds

T

tyrant

I am thinking of increasing my trading capital in Interactive Brokers. I want to put most of my savings there as they do pay good interest. Security of my funds is very important. I simply cannot take it if I woke up one day and see my broker go bust and lose my life savings. I was also thinking of diversifying some funds into thinkorswim. However, I also thought that I better make up my mind as to which broker I think is the safest between the 2 because it's nice to say diversify but losing 50% of your funds if one of them go bust is JUST AS BAD as losing 100%. To me, at least. So, I have decided to stick to just one broker which I deem safest. Whats your pick and why.

Thanks
 
As far as I know, TOS is just an Introducing Broker for Penson (PNSN).

So, you have to compare Penson with Interactive Brokers (IBKR).

The first thing I would do is: Pull up charts of both companies and compare their performance during the recent turmoil in financial stocks. For me, there is no question where I would put my money, if I had to choose only one of them.

That said, I think it is always good to diversify funds between different brokers. There is simply no such thing as "100% security".
 
IB always seemed somewhat anal retentive about their margin rules, funds transfers, etc when compared with other "high flier" brokers like TOS. But it seems to me that this fastidiousness makes IB a very safe operation.

IB doesn't (to my knowledge) offer boutique features such as debit cards that other brokers do. This seems kind of stodgy, but again I think it just goes to the heart of what IB is about: safety.

I hope to hell I'm not wrong about them. :cool:
 
Quote from sculptor66:

As far as I know, TOS is just an Introducing Broker for Penson (PNSN).

So, you have to compare Penson with Interactive Brokers (IBKR).

The first thing I would do is: Pull up charts of both companies and compare their performance during the recent turmoil in financial stocks. For me, there is no question where I would put my money, if I had to choose only one of them.

That said, I think it is always good to diversify funds between different brokers. There is simply no such thing as "100% security".
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Hi sculptor,

Do not have access to charts now but are you saying IB's chart seems to hold up better than penson?
 
Quote from stevegee58:

IB always seemed somewhat anal retentive about their margin rules, funds transfers, etc when compared with other "high flier" brokers like TOS. But it seems to me that this fastidiousness makes IB a very safe operation.

IB doesn't (to my knowledge) offer boutique features such as debit cards that other brokers do. This seems kind of stodgy, but again I think it just goes to the heart of what IB is about: safety.

I hope to hell I'm not wrong about them. :cool:
More...



Thats what I thought too, that they are quite strict with many things and this tells me that they are serious about security. I am just wary of them going under if some of the banks they deposit their money with or their counterparties fold. Another factor is their parent company Timberhill being one of the largest market maker in options. I mean, will some market collapse somewhere that they make market in cause them to go under?

What are the obvious signs of financial distress, if any, so that we can pull out funds in time?
 
Quote from tyrant:

Thats what I thought too, that they are quite strict with many things and this tells me that they are serious about security. I am just wary of them going under if some of the banks they deposit their money with or their counterparties fold. Another factor is their parent company Timberhill being one of the largest market maker in options. I mean, will some market collapse somewhere that they make market in cause them to go under?

What are the obvious signs of financial distress, if any, so that we can pull out funds in time?
More...

IB market making makes more money when the market is volatile, as their competitors withdraw letting IB make wider markets.
 
Quote from squirly309:

Aren't those regulations applicable to pretty much all brokerages? Nice to see that IB 'seems' to take them seriously though.
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How many brokerage houses are traded publically? Interactive Broker Ticker Symbol: IBKR
 
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