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vetten
Registered: Nov 2004
Posts: 202 |
04-26-12 06:15 PM
hello folks,
I always wonder if currency futures from CME are safe if a broker blows up.
with the likes of Refco and MF Global going belly-up, I dont feel like pouring big money in spot forex.
so what happens if I bought a currency futures contract through my broker and he goes bankrupt?
thanks
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Wallace
Registered: Aug 2003
Posts: 3022 |
04-26-12 06:26 PM
if you're trading with a Canadian broker, your account is insured up to C$1,000,000 -
highest insured amount in the world
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failed_trad3r
Registered: Oct 2009
Posts: 1613 |
04-26-12 07:19 PM
Quote from vetten:
hello folks,
I always wonder if currency futures from CME are safe if a broker blows up.
with the likes of Refco and MF Global going belly-up, I dont feel like pouring big money in spot forex.
so what happens if I bought a currency futures contract through my broker and he goes bankrupt?
thanks
if a broker goes bankrupt due to a banking crisis youre out of luck. the insurance is paid by either government or bank guarantee. but in a banking crisis both lack liquidity.
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emg
Registered: Feb 2010
Posts: 5318 |
04-26-12 07:31 PM
Quote from vetten:
hello folks,
I always wonder if currency futures from CME are safe if a broker blows up.
with the likes of Refco and MF Global going belly-up, I dont feel like pouring big money in spot forex.
so what happens if I bought a currency futures contract through my broker and he goes bankrupt?
thanks
http://www.finra.org/Investors/Prot...SIPCProtection/
Not all investments are protected by SIPC. In general, SIPC covers notes, stocks, bonds, mutual fund and other investment company shares, and other registered securities. It does not cover instruments such as unregistered investment contracts, unregistered limited partnerships, fixed annuity contracts, currency, and interests in gold, silver, or other commodity futures contracts or commodity options.
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drukes1234
Registered: Aug 2002
Posts: 1050 |
04-26-12 07:55 PM
Quote from Wallace:
if you're trading with a Canadian broker, your account is insured up to C$1,000,000 -
highest insured amount in the world
If with a Canadian broker everything is covered including futures. With an American broker, not so much.
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rmorse
Registered: Apr 2011
Posts: 1056 |
04-26-12 08:16 PM
I can only speak for accounts the US. If you're trading FX futures or option on FX, your protected by the segregated nature of Futures accounts. For the most part that is considered enough, except in the case like MFG where there appeared to be theft.
If you have an FX account trading non-deliverable FX, which is the most common, you become a creditor of the broker if they go bankrupt. The FX account would offer the least protection.
Bob
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