Lets say I use IB. I have a short ES futures contract and a short ES call and $300,000 in cash and about 10 long Leaps on two or three US stocks and a few thousand shares of some Australian stocks and I am short $100,000 NZD. Now IB goes broke. What do I need to worry about losing?
IB isn't going broke. they had record profits just two months ago. Also, as of last year anyway, were ranked as one of the safest brokers in the World as far as capital assets/client funds ratio is concerned. This is exactly why I have been using them for years. I would worry more about the actual positions than IB going under. IB was just moving with the markets today. All the brokers were getting pounded. Some more, some less.
SIPC will cover up to a $500k account value (at most $100k cash) IB also has Lloyd of London for over ($30M account total, $1M cash). See here: http://individuals.interactivebrokers.com/en/accounts/accountProtection.php?ib_entity=llc
Well, considering that I trade futures and options on futures almost as much as the stocks, et-cetera, the IB statement makes me feel a little ill at ease. Basically, there is no protection for futures or futures options. What do futures brokers use?
And, as an aside, trust me: Whatever syndicate at Lloyd's underwrites IB, they will fight you tooth and nail and forever for every penny, if it ever came to that. I used to do work for them. It would be easier to get money out of a Florida insurer for hurricane damage -- and if you think that's easy then ....
Right, no protection for futures. That's true everywhere. These are held in a segregated account. At IB however, funds not directly used for a futures position or as futures margin are held in the securities account and are insured under SIPC. At most futures firms this would not be the case. OldTrader
So, at a non-futures broker, your futures and FOs are not covered but your cash is, and at a futures broker your cash isn't but your futures and FOs are. I can't believe this is true, but it is so screwed up it must be.