SIPC protection. What happens?

Discussion in 'Trading' started by prc117f, Jun 11, 2008.

  1. prc117f


    What exactly happens if a lets say etrade (where I am doing my regular trading) goes under and I have 1000 shares that I bought that morning?

    I did not use margin so they did no loan out my stocks but I do have a margin account. I heard that SIPC will not protect you if your stocks are loaned out.

    But if I have no margin balance can Etrade still loan out my stocks or can they only do this if they use it as collateral for margin trading.

    I do not use margin although my account is a margin account.

    Do I get physical stock certificates of GE sent to me? or does it get transferred to another broker?