nah, still two other options: 1) ring up Lloyds and ask what it will cost you to insure your account against IB going under , will give you a good idea what they think about them and 2) you are only worried if you know that you cannot trade it together again. Any trader worth their salt can get it back unless they got it by a fluke. Not worried here. Maria
can customers choose which bank he wants his money to be held in? here's a ranking of the largest U.S. banks http://www.money-rates.com/largestbanks.htm 1) Bank of America 2) Citicorp 3) JPM Chase 4) Wachovia 5) Wells Fargo 6) Washington Mutual 7) HSBC Holdings 8) Suntrust Bank 9) U.S. Bancorp 10) Royal Bank of Scotland
No offense but I think we run a pretty tight ship in this regard and will do a better job of managing this risk than most clients. As previously mentioned, we distribute funds over several of the major banks and the groups capital offers an additional buffer. Do note that client funds are pooled into segregated accounts (this is true of all US brokers). So even if you say you want money at Bank X, that does not mean that money is earmarked to your account. In other words, if client A blows out, client B's funds are at risk if the firms capital can't cover the debt to the clearing house (that's one of the reasons we maintain tight margin controls).
I'm not familiar with UK regulations but the distribution of funds and strict internal credit controls is global. In short, all the eggs are not in the same basket.
Do note that client funds are pooled into segregated accounts (this is true of all US brokers). So even if you say you want money at Bank X, that does not mean that money is earmarked to your account. In other words, if client A blows out, client B's funds are at risk if the firms capital can't cover the debt to the clearing house (that's one of the reasons we maintain tight margin controls). [/B][/QUOTE] Hi Def, First of all, I am a happy IB customer. In this volatile markets however I think everyone is more or less concerned about the safety of his/her funds. You state in the above that client funds are pooled into segregated accounts. My back-up broker (also US) states however that customer segregated assets can not be used to margin other customers trades. Is this different at IB, also I think the way IB's margin and risk policy is great and is probably the best way to avoid blow ups. Second, is a IB-UK customer treated different than a IB-US customer. In other words, living in Europe, I opened a IB-UK account. Are UK accounts separated from other IB accounts and treated different when any problems occur? Kind regards, PBB
Hi Def, First of all, I am a happy IB customer. In this volatile markets however I think everyone is more or less concerned about the safety of his/her funds. You state in the above that client funds are pooled into segregated accounts. My back-up broker (also US) states however that customer segregated assets can not be used to margin other customers trades. Is this different at IB, also I think the way IB's margin and risk policy is great and is probably the best way to avoid blow ups. Second, is a IB-UK customer treated different than a IB-US customer. In other words, living in Europe, I opened a IB-UK account. Are UK accounts separated from other IB accounts and treated different when any problems occur? Kind regards, PBB [/B][/QUOTE] sorry don't have time for a long reply. Sure, a client must post initial margin to open a position. However, what happens if there is a large pnl loss which brings the client under variation margin requirements and the client doesn't have the funds to cover the loss? the broker will have to cover the difference. The clearing house will auto debit the clearing account which would be a problem if a broker doesn't have enough capital to cover the loss.
i guess what everyone wants to know is this: if citigroup files for chapter 11 today, will everyone be able to close all their positions and withdraw their money in full tomorrow?