Is cash no longer fully insured in an IB account ?
- Thread starter Damrak
- Start date
no kidding, I suppose an astute stock analyst could have known something was wrong, but you would think IB has a few astute analysts employed and they were first in line to buy it.
Failure to sweep with no advance warning and no explanation (as if that would make a difference) puts me on notice.
But you make a good point. MF was great until it was bad, and IB was trying to buy it until they weren't.
couple thoughts...first yeah it sucks the sweep might go away but as steveh right said, this feature might not have had any real value b/c the ultimate guarantee wasn't coming from ib but from sipc. it's like if i told you john smith would insure your house but then later find out that he wasn't going to. there's a lot of speculation so i say we wait as hard as it is for def or whoever to make an OFFICIAL statement that's posted on the ib website so we can see what's what then make a decision w/ all the facts.
as for possible solutions, it's pretty much the same ones as before - have multiple accounts at separate brokers ideally with separate clearing firms (i've heard re a lot of traders using mb and tos now tda but they're still relying 100% on the clowns at pnsn - nothing wrong w/ using these two firms it's just watch out for single points of failure).
what ultimately is going to happen is that the trading community will DEMAND a solution as another poster said (e.g. a new broker will come out much like OH did a few years ago funded by a deep pocketed partner like peak6 and say "we don't do any of this nonsense that got everyone else in trouble, if you open a cash account you will not be subject to rehypo, etc).
bottom line is that for traders with under a few mil, the safest way to go is to use 3-4 accounts and be ready to wire money out from one to the other pdq if things go sideways - or even look like they could.
i know long post but it's good that traders are all over this issue and notice these substantial changes which are basically footnotes and call brokers on it. if brokers pull this horsesh*t and no one says anything they'll keep doing it. if you give a mouse a cookie...however if a thousand traders representing x mil say "knock this horsesh*t off or we're wiring out today" then the broker will see the error is their ways pdq.
as for possible solutions, it's pretty much the same ones as before - have multiple accounts at separate brokers ideally with separate clearing firms (i've heard re a lot of traders using mb and tos now tda but they're still relying 100% on the clowns at pnsn - nothing wrong w/ using these two firms it's just watch out for single points of failure).
what ultimately is going to happen is that the trading community will DEMAND a solution as another poster said (e.g. a new broker will come out much like OH did a few years ago funded by a deep pocketed partner like peak6 and say "we don't do any of this nonsense that got everyone else in trouble, if you open a cash account you will not be subject to rehypo, etc).
bottom line is that for traders with under a few mil, the safest way to go is to use 3-4 accounts and be ready to wire money out from one to the other pdq if things go sideways - or even look like they could.
i know long post but it's good that traders are all over this issue and notice these substantial changes which are basically footnotes and call brokers on it. if brokers pull this horsesh*t and no one says anything they'll keep doing it. if you give a mouse a cookie...however if a thousand traders representing x mil say "knock this horsesh*t off or we're wiring out today" then the broker will see the error is their ways pdq.