If you're really worried and aren't trading currently, get your money out. It's a lot less hassle if they go down, even if it is insured. At least until we know what is going to happen to them.
I don't give a damn if its FDIC insured or not. I withdrew the $6,000 I had there as soon as this news broke out. What kind of idiot leaves his money in a bank knowing full well it could go bankrupt. There are far too many banks out there with far less risk than E-Trade.
If you have a short position of a company lie E-trade, and if it indeed goes bankrupt after a while, how can you buy-to-cover to realize the profit from that short position?
You don't need to buy it back. You sold it, the cash went to your account, and you don't have to buy it back.
FDIC doesn't cover stocks. If you are in doubt, request to take delivery of your stock certificates, or move your account. I don't know how it works these days, but in the 70's a friend said his broker went BK. His stock shares were held "In Street Name". He finally got a few cents on the dollar years later after the lawsuit settled.
I wonder how do you took the money if today was a bank holiday on the US and e-trade didn't make any wire or ach transfer.
SIPC only covers your holdings up to 500k, of which it will only cover 100k that you have in cash that's bearing interest. In other words, any money in excess of 100k that's not invested in equities IS NOT COVERED in the event of a bankruptcy or other involuntary liquidation by a brokerage firm.
OK, you're stuck in your car in a traffic jam. Suddenly you spot an 18-wheeler coming straight at you full speed in the oncoming traffic. You a/ stay in your car, 'cause its insured b/ stay in your car, 'cause the driver must surely know what he's doing, and he surely has no intention of crashing or killing you c/ get out and run for cover I wouldn't close the account, but sure as hell I would move all the money out...