At what point do you millionaires split up your funds and manage different brokerage accounts?

Discussion in 'Risk Management' started by ElectricSavant, Nov 22, 2019.

  1. Are you sure you can buy treasuries in your own name in a margin account at most brokers?
     
    #21     Nov 22, 2019
  2. Sig

    Sig

    I guess I only care that I can do it at my broker, now that you ask:D I would be surprised if there are any brokers who wouldn't let you do it. It's a common strategy for exactly that reason and some entities are required by their bylaws to either do that or have insurance coverage that would actually cover 100% of their loss which as you all did a good job of pointing out none of the current products do given the aggregate loss limit.
     
    #22     Nov 22, 2019
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  3. dozu888

    dozu888

    how is this gonna work.... say you have an account with $1m in stocks, you buy treasuries on margin?
     
    #23     Nov 22, 2019
  4. comagnum

    comagnum

    I am not the best person to answer this since I don't do major in shorting. Since I have PM with IB I have been using them as me go to for shorting these days.

    Never noticed a wide disparity between brokers with the borrow rates.
     
    Last edited: Nov 22, 2019
    #24     Nov 22, 2019
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  5. ETJ

    ETJ

    Can be a significant disparity in short rebate rates depending a lot as to if the position is in their "box" or do they have to do a locate. You can see the "market" rate by backsolving the option parity equation - but parity could be a band if it's HTB, but you'd still have a sense. Some slightly better rates if the custodian has an ongoing relationship with you.
    If Schwab/TD becomes a reality they are going to have a "size" box for lending.
     
    #25     Nov 22, 2019
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  6. ironchef

    ironchef

    Just pick any two brokers that are "too big to fail" and you should be diversified enough at any net worth level. However, they do treat you a little different when your account exceeds $1M, give you a special # to call when you need help even when you are self directed.
     
    #26     Nov 22, 2019
  7. dozu888

    dozu888

    The current big 5 are all tbtf.
     
    #27     Nov 23, 2019
  8. ETJ

    ETJ

    As was Lehman under a Republican administration.
     
    #28     Nov 23, 2019
  9. IB must be an exception. They still treat me like shit haha
     
    #29     Nov 24, 2019