Publicly Traded Firms and Portfolio Risk

" Regarding SIPC, I think this has come up before, but at times one may want to be in all or mostly cash (or cash fund equivalent), potentially putting one over the $100k threshold for protection, even if spread across 3-4 firms."
quote by tomahawk



Buy risk insurance on the amount not covered by SIPC or instead of 3,4 brokerages use 5,6 or 10. You are looking for a perfect answer and this is not a perfect world.
 
Quote from jeb9999:

What type of disaster do you think could hit IB and wipe out their $4.64 billion in capital and start using the $9.04 billion in customer cash? IB only has two businesses, market making and brokerage. In a poor quarter IB had pretax profits of $141.5 million from market making and $62.0 million from brokerage.

I have significant retirement funds at IB purposely because I believe IB to be the lowest risk broker with reasonable commissions. I am not aware of a brokerage firm with a lower risk profile than IB has. I have a futures account at a higher risk broker because IB's futures commissions are too high for regular trading.
More...

Thanks for your post jeb.

Regarding your question, who knows what could happen to IB? Maybe a ridiculous transaction tax gets passed and suddenly there's a run on all the discount brokers. Or we wake up some morning to see Peterfly on the news ... in handcuffs. I'm not saying either of these things is very likely, but with all that's come to light in the past year I now believe anything is possible, especially if it involves investors getting hosed.
 
Yes, you are correct , anything is possible.

Unfortunately, all the flights to Mars are booked, so you have to do your business here on Earth.
 
Quote from jeb9999:


I have significant retirement funds at IB purposely because I believe IB to be the lowest risk broker with reasonable commissions. I am not aware of a brokerage firm with a lower risk profile than IB has. I have a futures account at a higher risk broker because IB's futures commissions are too high for regular trading.
More...

If you don't mind my asking, who do you use for futures trading and how long have you been with them?

- thanks.
 
You must log in or register to reply here.
Back
Top