What do you know about TS Humble Investor? Inquiring minds want to know. (So do TS account holders.)
Tradestation: zero commission
- Thread starter Maverick2608
- Start date
They are a heavily leveraged institution (18.50 to 1). By contrast IB is levered at only 8.5 to 1. One little thing goes wrong and TS is done. These so called "free trades" are just going to make things worse for them.
And by the way, good look with SIPC, it's gonna take 1-2 years to get your money back if things goes wrong.
@Humble Investor - what are you basing this on? Not doubting your info, just can't find anything (and am very interested, since I have an account with them as do friends of mine.)
Here you go:
https://www.sec.gov/Archives/edgar/data/1002006/000100200619000004/TSSBalanceSheet3_31_19.pdf
It's unbelievable to me that only 10 years after the financial crisis, people have forgotten what counterparty risk is and that brokers can go bankrupt!
The only ones that I trust with my money are: IB, SCHW, AMTD, Fidelity and a few other firms.
Guys, please read your broker's financials!
Thanks, @Humble Investor... I'm fairly new to all this, but trying to learn as fast as I can. Really appreciate this extra bit of knowledge; I was aware of counterparty risk as a general principle, but I've never applied it in this context.
I'm seriously weak on the fundamentals, so would appreciate a cross-check here - we're just talking about their total liabilities over their shareholder equity, right? (I don't see a way to figure the actual tier 1 leverage ratio - the total capital is easy enough, but I got lost looking for the "average total consolidated assets".)
If it's the former, then - yeah:
Assets: 2533792k
Liabilities: 2396709k
Shareholder equity: 137083k
Liabilities/equity: 2533792/137083 = ~18.5
Fidelity, for comparison, is
Assets: 64489M
Liabilities: 59659M
Shareholder equity: 4830M
Liabilities/equity: 59659/4830 = ~12.3
Is that what you're talking about?
Has anyone got examples of a major online retail brokerages that went bankrupt AND where clients lost money over the last 20 years?
I’m thinking online brokerages above a certain size like Charles Schwab, Fidelity, Interactive Brokers, Lightspeed, E-Trade, Ameritrade or Tradestation.
MF Global went bankrupt, but I do not believe clients lost money.
Even the notorious Lehman bankruptcy did not cost Lehman brokerage clients their money, although they had to wait five years.
https://www.ft.com/content/f06762de...kerage customers of MF,93 cents on the dollar
That does not mean it cannot happen in the future. Of course, it can. And I agree that it is wise and important to inform yourself about the financial position of the broker you choose.
I am interested in opening an account at Tradestation, because Tradestation apparently is the only broker offering commission-free trading for EU clients (UK clients may have the opportunity with Schwab), so at least I can gain access to gather data on price execution with zero-commission trading.
I’m thinking online brokerages above a certain size like Charles Schwab, Fidelity, Interactive Brokers, Lightspeed, E-Trade, Ameritrade or Tradestation.
MF Global went bankrupt, but I do not believe clients lost money.
Even the notorious Lehman bankruptcy did not cost Lehman brokerage clients their money, although they had to wait five years.
https://www.ft.com/content/f06762de...kerage customers of MF,93 cents on the dollar
That does not mean it cannot happen in the future. Of course, it can. And I agree that it is wise and important to inform yourself about the financial position of the broker you choose.
I am interested in opening an account at Tradestation, because Tradestation apparently is the only broker offering commission-free trading for EU clients (UK clients may have the opportunity with Schwab), so at least I can gain access to gather data on price execution with zero-commission trading.
Let's see... what would be the opposite of "damning with faint praise", now...
It may be that, for someone whose resources are well diversified - someone who, in short, does not have to give a damn about a single account at a single broker - this would be annoying but not significant. For the majority of brokers' customers, this would be anything from life-changing (and not in a good way) to lifestyle-destroying. Most would see no practical difference between losing it all and losing access to it for an unpredictable (in the event, years-long) amount of time, with no guarantees for eventual recovery.
All of us are, of course, brilliant with our finances and would not be affected in the least. [cough, cough]
Google - via 'lehman brothers stock chart' - is your friend.
