the brokers money is secured by the securities you trade on margin. an individuals credit rating has nothing to do with whether or not they collect on the margin. this is what a "margin call" accomplishes. now if you are speaking of taking a cash loan on margin, you may be correct. best, surfer
Many firm's will do a full background check on you and your funds. This may or may not include a FULL credit check. If you have declared bankruptcy and/or have collection agencies after you, I can assure you a firm is not giving you a few yards BP. NO FIRM wants dirty money comingled in their LLC!
Well, since there seems to be some disagreement, maybe people can mention specific firms they know for a fact that don't use credit checks? One guy mentioned that Scottrade <i>did</i> check your credit rating, and I can tentatively agree--when I was at the Scottrade offices, I vaguely remember one of their brokers mentioning it in the passing. That's one of the reasons I was worried about this in the first place. But... if people here with bad credit (or those who check to see if their credit report has been queried) can confirm that their futures broker (mentioned by name) did or did not check your credit, it would be a big help. Data file is still availible, for those who are interested and willing to help. By the way, I'm leaving town Sunday morning so if you reply later than that I won't be able to send you the link until I get back next Saturday night. And for those who are helping me merely out of the kindness of their heart, I sincerely thank you as well.
FYI--- as a note of personal experience, i have opened numerous accounts over the years with numerous stock, options, forex, and futures brokers--- NEVER ONCE did an inquiry show up on any of 3 credit bureaus reports. the firms risk management policies protects the firm from your bad trading, NOT your credit standing. it seems to me, that if these firms check your credit, its because they are looking to offer you cash loan products or something similar with another division. surfer
No traders with a right mind would trade with Scottrade. You want a direct access broker. The orders you place with scottrade are emailed to them, and then the broker has to approve etc etc.. Go with Interactive Brokers, MB trading etc etc if you are trading stocks.
you gotta be kidding! that sounds like something from 1979 !( minus the email, ofcourse) LOL ! surfer
Well, I don't know if that's quite true... most of my orders were confirmed in under 5 seconds. That said, I have heard that they're kinda slow and not terribly reliable, and I plan on getting into futures anyway, so the point is moot. I merely brought them up because they're one example of a broker who does use credit checks.
Who makes this shit up? No firm runs a manual check every time you trade, the computer will not allow you to exceed "X" amount of BP, period. Do you think Scotterd Calls up Equifax every time you trade GOOG? If you have been totally financially irresponsible in the past, there is a good chance a firm does not want you! PS: If you are actually series 7 licensed, which I strongly doubt, you MUST report bankruptcy/judgements against you to the NASD or they will suspend your license for lying on your U4.
<i>PS: If you are actually series 7 licensed, which I strongly doubt, you MUST report bankruptcy/judgements against you to the NASD or they will suspend your license for lying on your U4.</i> Nah, I'm just a kid with a cheap laptop, a four figure bank account, and a very decent programmer/analyst for a best friend. I don't even know what either of those acronyms mean. Just in case anyone's too lazy to check out page 6, I'm still looking for names of brokers that don't (or do) use credit checks--especially in the post 9/11 era.
I suggest you read this book and make a trip to Vegas afterwards. http://www.amazon.com/gp/reader/0743249992/ref=sib_dp_pt/103-9397212-4643015#reader-link