Is cash no longer fully insured in an IB account ?

It's funny no reason has been given for the change.

 

I asked about that and was told that funds will be swept to cover a deficit on the securities side, they just won't be automatically swept nightly. What I don't know is whether my buy order (i.e. triggering a deficit) will be accepted and the sweep done in realtime. They seem to indicate it will, but I haven't tested it.

[rwk]

 

This is good in terms of buying power but will hurt clients if IB files and we are not insured by the SPIC. Which is ironic, as a result of MF they will do something that will hurt clients even more in case it happens to them

 

Anybody can test it ?

 

How about opening two linked accounts and doing an instant transfer to draw out any excess commodities balance?

Also curious how a t-bill is treated, say you have a $100,000 6 month t-bill which IB gives you 99% margin on - then I do an overnight futures trade that ties up $50,000 maintenance margin. How does the accounting work?

IB's silence is deafening by the way - I understand regulatory changes are probably behind this, but I hate that I'm learning about this on ET first.

 

For combined account totals much larger than $500K, it might be safer to have $500K in the SIPC insured universal account and the rest of the funds in the segregated futures account (in contrast to all available funds be swept into the universal account and exceeding the limits of the SIPC insurance).

 

I'm sorry to see that Def has gone silent.

IB's one and only advantage, so far as I saw it, was the additional margin of safety their "sweeping" policy afforded commodities accounts. Now, with that gone, there's really no reason to stick around.

 

It's 7.14am in Hong Kong, I think he will respond today.

 

I guess SIPC dont like 'sweeping' anymore, they must now be seeing it as providing SIPC protection to Commodities account holders via the back door.

So any funds used for commodities trading sit in the commodities account until they are needed in the securities account to fund an actual securities position.
Then you can unambiguously claim your funds in the securities account were indeed used for securities trading and so are definitely covered by SIPC protection.

 

I hope IB will allow clients to issue cash transfer instructions through account management to move excess funds from the futures account to the universal account.