SIPC limits and IB

Keep in mind also that IB may not have that much in the way of cash in client accounts..at least from what I've read. Maybe I read this wrong, but there was a post a while back in another thread about funds under mgmt at each of the brokers. According to this chart, I thought IB only had about 130M or so. I know there are sweeps and the like from securities accounts to commodities accounts, etc... so I'm not sure precisely what this figure represents. The number seemed low to me, like something wasn't being counted. If that figure is legit and SIPC took care of the first 500K for everyone, the 150M would be more than enough for everyone else.

This was the pre/post Refco chart that I'm referring to. Looking at IB's financials, they have much more lying around on the balance sheet. I'm not sure what that chart represents.
 
Quote from Triple X:

Also, Govt. insurance will only pay you 50 cents on the dollar. I know someone who had money in a bank that went under, and FDIC insurance was 50 cents on the dollar. :(
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As a general statement, that is simply untrue. The only way you get only 50% is if you have twice the limit in your account, or the FDIC were insolvent and did not get bailed out by Congress.
 
Excellent Commentary All

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The main issue here is safety of funds as must be compared to other firms...The late 90´s created a lot of non self clearing low capitalization firms.......

Thus a brokerage has its liabilities...and a clearing firm has its liabilities...

Thus if one trades and desires the competitive rates that IB offers....the question is really who is safer in this regard than IB...and offers what IB offers...???

Most small private firms do not provide financial information as does IB....thus one is left in the dark with the alternatives...
 
Quote from OptionsWizard:

The disadvantage of splitting the account this way is the inefficiency of using your buying power.
This is not a problem if you just have stocks, just split the portfolio.
However, if you trade futures or (short) options and using most of your buying power for this, then you must reduce your quantity, effectively trading half size on each account.

Worse, if you use hedging (i.e. options against futures), you have to keep each account hedged, rather then trading the futures in one account and the options in the other.
This amounts to doubling your trading effort.

Worst of all, if you trade futures or (short) options, most of your buying power is in cash, which has a cap of just $100,000 SIPC protection and small supplemental from lloyds.

Unfortunately, I don't have a better solution than splitting accounts.
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with all of your accounts combined under the ib fa master account all accounts trade exactly as one account according to a preset allocation. i dont see a problem but i dont do those types of trades.
ib sweeps your futures account excess cash at night so it falls under better protection rules.
 
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