IB has two accounts for each customer; securities and commodities. The securities account is insured by SIPC. My concern is that IB never disclosed exactly how and when it shifts equity between those accounts based on the activity on the customer. That means if something happens, they can easily claim that the majority of the customer cash was in the commodities accounts because he traded futures at some point. It's very unclear and a bit of a concern to me. It would be much better and safer if IB stopped doing this behind the curtain and displayed securities and commodities accounts precisely for each customer somwhere in account management pages.
SIPC covers customer securities accounts up to $500,000 per customer, including a maximum of $250,000 for cash claims. And as others have pointed out, futures are NOT considered securities. Also, if you're a member of a prop/JBO broker dealer set up, you are NOT protected by SIPC at all. All Broker Dealer accounts are members of SIPC and pay dues, but are not entitled to protection for their securities or cash.
According to Jefferiesâ most recent Annual Report it had re-hypothecated $22.3 billion (in fair value) of assets in 2011 including government debt, asset backed securities, derivatives and corporate equity- thatâs just $15 billion shy of Jefferies total on balance sheet assets of $37 billion. I wonder what the Jefferies' CEO has to say now. They were banging on the drums really hard, saying how they were not like the rest and that the evil-doers were out to get them.
From options xpress (glad I checked into that for my Wife's IRA. lol): "How are accounts protected? optionsXpress is a member of SIPC, the Securities Investor Protection Corporation, which protects against losses caused by the financial failure of the broker-dealer, but not against losses resulting from depreciation in a securityâs value. Your optionsXpress accounts are protected by SIPC up to $500,000âincluding up to $100,000 for cash claims. Additionally, on our own initiative and at no additional cost to you, optionsXpress has secured excess SIPC coverage offering your account additional account protection beyond the standard SIPC limits. optionsXpressâ excess SIPC policy covers in the aggregate up to $100,000,000, subject to a maximum limit of $24,500,000 per customer, $900,000 of which may be cash." They're pointing out 100k in cash claim, but the SIPC website says 250k. No wonder the average investor is running away confused.