Oh no, my broker's shareprice has got crushed for 30% over the last 4 days, nobody knows what's going on and there are unconfirmed rumours on the web that there's been some massive fraud or MF type problems. What shall I do? It will be a hassle to close my positions out and wire a large proportion of my account to my backup broker. So the better idea I think is to do nothing and then spend years waiting for the adminstrator/trustee to sort the mess out and return me 20 cents on the $
IB has always seemed like a mysterious entity to my eyes and though I do have some money over there now (I love my $1 commission for 200 shares in my IRA), I no longer am comfortable having most of my money there. I always have IBKR in all of my watch lists, for whatever that is worth. Given the higher frequency players who are the customers there, I will get more nervous about IB if we ever approach anything like an overall markdown meltdown though they did survive the last one and in fact benefited from the volatility. I feel more comfortable about TDAmer/TOS and Fidelity because of all of the buy-and-hold customer base but of course, depending on what you are doing, their commissions are not as good. They both have FDIC accounts for the cash sweeps, if you are not defined as a day trader. That means FDIC insured cash sweeps for the futures over at TD (Fidelity doesn't offer futures), which IB does not have. Anyway.
FDIC and SIPC have a limitation in terms of funding.. so dont always assume they will be around... also the funds they will guarantee are limited... there is always risk... but there are always ways to hedge a bit against those risks...
Yes but it is a matter of degree - I have more 'faith' in the gubment (FDIC) than the SIPC who does not cover funds that are/were being used for futures trading (specifically). IB is just a bit too murky beneath the sheets for my taste but I still use them.
Counter party risk is just that risk. No matter how each of us decides to calculate that risk it must be calculated and if and when that risk seems to be increasing action needs to be taken. If you need to seriously think about the safety of your capital it's a no brainer. Move it.
ok, but closing out everytime it drops below $10, (which was your original idea) sounds a little crazy to me.
Yes I admit that's true. So if the share price drifts lower and eventually drops below $10 I will do NOTHING and sleep well. What I'm looking for though is if the price slams down, say 30% over a few days on NO official news. If that were to happen I'd be very worried and start to do something. That's my point, I'm just using this strategy as a canary in a coalmine as you can bet that problems will show up in the share price before a peon like me gets to know anything official. Having said all of that I'm very happy with IB and I think it's highly unlikely and probably unfair to suggest that this could happen. But whatever the odds, it's not inconceivable hence my simple strategy. But I fully expect IB to be around in the future and me to be a satisifed customer.
I know exactly what IB is doing, they are using your deposits to manipulate the currencies to their favour... They have the firepower to turn the market/exchange-rates any way they want and will eliminate anyone who gets in their way (people using leverage that is, because if you use other IB-members money they can't maximize their profits). It's kinda sad really, they must really be desperate for money. I followed their footsteps for a while until they got angry and decided to go against every trade I made, after some good profit I have lost 3500$ in total now, they just would not let me win another dollar, my client was also manipulated, sell-orders became buy-orders and vice versa, orders where moved around automatically, feed was all messed up, they now totally ignore me on the phone and on the chat, what a waste of time and money....