Money safe with IB?

Discussion in 'Interactive Brokers' started by laputa, Aug 16, 2007.

  1. laputa


    I have my trading account with IB. Given the current market volatility and liquidity crunch I'm thinking whether there is any reason that I should be worried about the safety of my money.

    From my understanding:

    1) IB is ruthless in dumping positions that doesn't meet margin requirement and there is no such thing as a margin call. I believe they do it by the second and thus my believe is that it is highly unlikely IB would be stucked with losing customer positions.

    2) IB does not engage in any fund management business and has nothing to do with this whole subprime thing.

    Given 1) and 2) I should feel quite comfortable with my broker, maybe even more so than some investment banks such as bear sterns or even gs under the current condition...

    What slightly worries me is that IB is also a market maker especially in the options market. Selling liquidity in such market condition could incurr unexpectable losses. I wonder if anyone has a view on this issue? In case timber hill goes down, just in case, would this affect IB customer accounts? Anyone from IB?

    What I really want to hear is someone from IB saying "Timber Hill has sepearte books from IB brokerage and it's totally seperated.... yada yada..." but I'm not really sure about this...

    Many thanks!
  2. as long as udner 100k no problem its safe
  3. I wonder if money is safe at e-trade.
    I have an small acc there and given the recent fallout of the stock im starting to concern.

    What do u guys think?
  5. una11


    Sell everything and put the cash under your bed
  6. just21


    I made a small withdrawel from IB today. No problems with token and the money has already been deducted. Timberhill are usually long vol according to their prospectus so they should be ok.
  7. you are a big girl!
  8. laputa


  9. laputa


    You obviously don't have a clue about the Refco episode...
  10. pkts


    Now I'm confused, I thought that their policy with Lloyd's covers you up to 1 mill in cash ? Or do you have to have over 500k in stocks AND over 100K in cash to qualify for the extra 900K of cash protection?

    Seems like this would be counterproductive for IB to not cover. They have to have a ton of futures traders who are sitting in cash with more than 100K in cash but little to no stocks?
    #10     Aug 16, 2007