Reassuring - Tradestation/RJ Obrien

Discussion in 'Retail Brokers' started by bandit77, Aug 25, 2007.

  1. Cy_M

    Cy_M

    #11     Aug 27, 2007
  2. Cy_M

    Cy_M

    So, what precautions should one take?
     
    #12     Aug 27, 2007
  3. 1) No. Universal account consists of a securities subaccount and a futures subaccount. Futures subaccount is not insured. Securities subaccount is protected by SIPC up to limits of $100,000 for cash, $500,000 in securities, and SIPC also helps protect customer property beyond these limits in certain situations. IB's private insurance also protects securities subaccount up to $900,000 for cash and $29.5M for securities, with an aggegate limit of $150M for all accounts combined.

    2) Refco's collapse was inevitable, but fraudulent schemes of all varieties, not just crooked brokers, are less likely to collapse in good markets, and more likely to collapse during times of tightened credit or elevated market volatility.
     
    #13     Aug 27, 2007
  4. cstfx

    cstfx

    OK I knew that futures were not insured. But (A) isn't the free cash (proceeds from futures transactions) swept into securities account so that the only time you would be at risk trading futures would be when you actually had a trade on? And if not, (B) is it that monies are only transferred back and forth between futures/sec accounts when there is a need to cover trades/margins? I always thought (A) was how IB did it
     
    #14     Aug 27, 2007
  5. Funds are transferred from the insured securities subaccount to the uninsured futures subaccount, when needed to meet performance bond requirements for futures positions. Excess cash is swept nightly from the futures subaccount back to the securities subaccount. Sorry I left out the part about the sweeping.
     
    #15     Aug 28, 2007
  6. cstfx

    cstfx

    thx.
     
    #16     Aug 28, 2007
  7. Cy_M

    Cy_M

    HI, thanks for the useful info, questions?
    1 - By universal account, you mean having both equities & future's account with the same broker?
    2 - If so please name a couple of brokers who do that and have the best rates and reputation.
    3 - Regarding sweeping, what if you're scalping in the futures and or hold overnight every now and then, would they still sweep the funds into security account.
    4 - In case of universal accounts, you can freely trade futures and equities without worrying about transferring funds to different accounts as long as one universally stays within margin?

    thanks
     
    #17     Aug 28, 2007
  8. 1. yes
    2. IB seems to be the most popular
    3. if holding futures overnight, then the cash remains in the uninsured futures account
    4. yes
     
    #18     Aug 28, 2007
  9. Yes, but the only cash that remains in the uninsured futures subaccount, and which is not swept into the insured securities subaccount each night, is the bare minimum cash needed to satisfy performance bond (margin) requirements for your futures positions.
     
    #19     Aug 28, 2007
  10. Cy_M

    Cy_M

    thanks all for the responses.
    A couple of more broker names doing Universal accounts would be nice.
    Also what is the best way to collect interest on the Universal account with say $150k initial capital?
     
    #20     Aug 31, 2007