Don't need to worry about the SIPC limit. Most large brokerages have additional protection. For example this is from TD Ameritrade: "Additionally, TD Ameritrade provides each client $149.5 million worth of additional protection for securities and $2 million of protection for cash through supplemental coverage provided by London insurers."
Risk for $500k+ assets in single brokerage account?
- Thread starter turkeyneck
- Start date
Good call. Thanks.
"All fully paid customer securities, including stocks and bonds, are 100% owned by the customer. These securities are required to be kept segregated from E*TRADE Securities' own assets, and cannot be used by E*TRADE Securities to satisfy its own obligations."
Robert Morse
Sponsor
I can't tell you to ignore the risk of future defaults even with SIPC or future's seg accounts.
I can tell you that I find it interesting that this concern is most often voiced by accounts under $500K and I'm almost never asked by accounts over $5mm.
I can tell you that I find it interesting that this concern is most often voiced by accounts under $500K and I'm almost never asked by accounts over $5mm.
correct, this has happened more than once and traders accounts have been transferred. I have no actual experience with this, just read this happening a few times.
selling puts is free money until you blow up. Then you learn about tail hedging strategies.
Besides the MF Global disaster, don't forget our friend Wasendorf from Peregrine who also thought he'd wine & dine off customer accounts. Things are dangerous for futures traders out there...
When my wife and I sold our business and got inheritance, we spread it around. We have money/stocks (trust and Roth IRAs) at Schwab, Fidelity, and my wife has an old Roth IRA at T. Rowe Price. We use Wells Fargo for banking. We each have two credit cards (no debit card) and an ATM each. We have put CDs in different banks. Some in solid banks (Wells Fargo) and some in credit unions and slightly riskier banks.
Twice, in about 20 years with Schwab and Fidelity, I have made major blunders in online trading...Both to our advantage (thank God).
The first one was I wanted Royce Global Trust RGT (1,000 shares)...I put it in for 10,000!! I caught it after about 3,200 share the next day. It was a great investment over the last 10 years.
The second one was I bought a put rather than doing a covered call on QQQ!! This was about 4 years ago. I caught my mistake and cleared the trade for a good profit.
I like to stay at level one for my options. At my age, I don't want to make big costly mistakes...Drain an account completely!!
One last story...In 2008 during the financial crisis, we closed our bank accounts with our bank, that we thought would go under (it did). At the same time we walked our safe deposit content to Wells Fargo. At that time (2008), WE DID NOT CARE WHAT INTEREST WELLS FARGO PAID...WE DID NOT CARE WHAT THEY CHARGED FOR THE SAFE DEPOSIT BOX!! All we cared about was having our money there and not having it tied up in the FDIC for 6 months while the government figured out what to do.
Safe/boring investor here...
PS About 2005 (not sure the date), all the brokers announced they do not hold a fiduciary relationship with you. Before a certain date, it was implied that they did. They changed their fine print...
Twice, in about 20 years with Schwab and Fidelity, I have made major blunders in online trading...Both to our advantage (thank God).
The first one was I wanted Royce Global Trust RGT (1,000 shares)...I put it in for 10,000!! I caught it after about 3,200 share the next day. It was a great investment over the last 10 years.
The second one was I bought a put rather than doing a covered call on QQQ!! This was about 4 years ago. I caught my mistake and cleared the trade for a good profit.
I like to stay at level one for my options. At my age, I don't want to make big costly mistakes...Drain an account completely!!
One last story...In 2008 during the financial crisis, we closed our bank accounts with our bank, that we thought would go under (it did). At the same time we walked our safe deposit content to Wells Fargo. At that time (2008), WE DID NOT CARE WHAT INTEREST WELLS FARGO PAID...WE DID NOT CARE WHAT THEY CHARGED FOR THE SAFE DEPOSIT BOX!! All we cared about was having our money there and not having it tied up in the FDIC for 6 months while the government figured out what to do.
Safe/boring investor here...
PS About 2005 (not sure the date), all the brokers announced they do not hold a fiduciary relationship with you. Before a certain date, it was implied that they did. They changed their fine print...
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I remember my FIRST fat-finger options order that literally threw money away. After that I check and double-check estimated margins before I hit the final submit. That's saved me many times over my initial value lost. I guess it was a good lesson paid for the first time.
IB claims all money is under SIPC? even though it's singal account allows you to trade Futures not just Stock!