Is cash no longer fully insured in an IB account ?

IB-AN, thanks for following up - it sounds like IB is doing the right thing for the customer as usual, look forward to the final implementation.

PS - I'm not sure if it's your realm of expertise but WRT the universal account, what is the treatment of an account with a $1,000,000 6-month T-bill that wishes to trade commodities? Which side is the T-bill held on (securities/futures), and is the 99% margin available as futures collateral without incurring a margin loan?

Happy new year everyone!

Quote from IB-AN:

What you are seeing is the first phase of a development effort which, at completion, will provide clients with full discretion as to which account segment (securities or commodities) excess cash is to be transferred as opposed to IB making that election.

As is the case with most development efforts, this is being driven by client requests and while it might seem illogical for any given client to waive the protection of SIPC, there are some sound reasons for doing so. Chief among these is the fact that the activity of many clients is predominantly skewed towards commodities and the level of cash they maintain is well in excess of the $250,000 limit imposed by SIPC, to the point where that coverage is deemed immaterial and not warranting any internal bookkeeping/reconciliation efforts introduced by the securities segment. assist.
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So it was an IB move not an SIPC. I find it troubling that IB does a move like that (for now) effects the security of its clients, without notification to its clients.
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QUOTE]Quote from IB-AN:

What you are seeing is the first phase of a development effort which, at completion, will provide clients with full discretion as to which account segment (securities or commodities) excess cash is to be transferred as opposed to IB making that election.

As is the case with most development efforts, this is being driven by client requests and while it might seem illogical for any given client to waive the protection of SIPC, there are some sound reasons for doing so. Chief among these is the fact that the activity of many clients is predominantly skewed towards commodities and the level of cash they maintain is well in excess of the $250,000 limit imposed by SIPC, to the point where that coverage is deemed immaterial and not warranting any internal bookkeeping/reconciliation efforts introduced by the securities segment.
 
yeah well, I've always been comfortable with futures. It's the one place in my life I could always operate with very little regulation, and I hate to see that changing. (but then again, I always hate to see anything change.) I always knew that the most important risk was making bad trades, and then even if I was so fortunate as to make good trades I had to worry about the broker.

The attraction to IB was an account, easily moved from the safe side to the risky side. It appears that is no longer the case. So that makes IB just like any other futures broker. Maybe safer than some, but same risk.

Commissions mean nothing to me when it comes to my conservative money. Compared to the old days, I can trade in a securities only account, just the way I used to do it at a fraction of the old pre regulation rates with any broker out there.

So why take the risk?

I agree with many previous posters. IB is just for risky trades. Keep the safe money somewhere else.
 
let me put it to you this way. MF goes under and nobody cares because nobody knows who they are and what they do.

Fidelity or Vanguard or Charles Schwab goes under and every carp sucking politician is going to be on your side.

True, they ain't going to be on your side the way they will be when Doitcha Bank goes under
 
Quote from Joe Doaks:

Does this have any relevance to Universal accounts? I thought the issue was sweeping between two different account types. Thanks.
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Universal accounts are just a client reporting presentation layer on top of two underlying real accounts, Securities and Futures. You can see the underlying real accounts in the Account Window.
 
Quote from oldtime:

yeah well, I've always been comfortable with futures. It's the one place in my life I could always operate with very little regulation, and I hate to see that changing. (but then again, I always hate to see anything change.) I always knew that the most important risk was making bad trades, and then even if I was so fortunate as to make good trades I had to worry about the broker.

The attraction to IB was an account, easily moved from the safe side to the risky side. It appears that is no longer the case. So that makes IB just like any other futures broker. Maybe safer than some, but same risk.

Commissions mean nothing to me when it comes to my conservative money. Compared to the old days, I can trade in a securities only account, just the way I used to do it at a fraction of the old pre regulation rates with any broker out there.

So why take the risk?

I agree with many previous posters. IB is just for risky trades. Keep the safe money somewhere else.
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swanny mentioned 5th3rd as a safe bank,something that needs to be part of the equation is where your clearing firm keeps their money and how honest or transparent will that bank be with your clearing firm in the shtf scenario,we know the gist of the customer/ house agreement.. if shtf and your firm is banking with jpm chase or gs,who will those banks take care of first,are the houses worrying about this...what's the risk in the house/bank agreement..the fact that there is more than a rare chance of the shtf scenario...the bare minimum should be in any acct..and your stash house should be just as safe..how safe is any clearing house or your bank
 
Quote from Lady7:

I am not a lawyer I don't understand any of this
Can someone tell me is my margin account flat end of day safe in IB or not and I trade futures
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yeah Lady7, that's the question we're all beginning to ask. If you find out the answer let me know.

I also am not a lawyer, but I have extreme views on many of the Supreme Court decisions. They should have let me write the dissenting opinion.

To be honest with you, I don't understand it all either, but like my Daddy always told me, "Don't invest in anything you don't understand."
 
Quote from ammo:

swanny mentioned 5th3rd as a safe bank,something that needs to be part of the equation is where your clearing firm keeps their money and how honest or transparent will that bank be with your clearing firm in the shtf scenario,we know the gist of the customer/ house agreement.. if shtf and your firm is banking with jpm chase or gs,who will those banks take care of first,are the houses worrying about this...what's the risk in the house/bank agreement..the fact that there is more than a rare chance of the shtf scenario...the bare minimum should be in any acct..and your stash house should be just as safe..how safe is any clearing house or your bank
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maybe so, MF was banking with Harris and that's about as solid as I know, fuck it man, I'm just gonna go buy gold and hide it in my back yard, I can't take all this risk anymore
 
Quote from optionnew:

So it was an IB move not an SIPC. I find it troubling that IB does a move like that (for now) effects the security of its clients, without notification to its clients.
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Yeah I have a beef with the lack of communication, but at the same time the only reason we have these lengthy IB bitching threads is because they're more transparent about these matters than most in the industry.

I'm sure once this is worked out IB will offer the most flexibility that the regulatory framework allows - it sure beats other FCM's who will just give you lip service about funds being safe.
 
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