Great questions, bad person to ask Since CQG is not a broker but rather technology provider we know nothing about brokers and their fees, where they keep accounts and what they do with excess capital. You maybe better off to address this question to your broker, I am sure they will be happy to share the details with you!
Sorry I cant be any more helpful.
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Thank you @bobk for your answer. I probably would get my answer from account docs. My funds at Velocity are segregated from Velocity and are in a financial institution so to have a high level of trust with the customer. So my additional question is: what is the financial institution doing with these funds? I believe the financial institution should leave the funds as cash and use them as part of their required reserves while sweeping funds to and fro with Velocity. But since financial institutions no longer have any credibility nor the federal regulators; it is difficult to accept that a financial institution leaves funds idle. If the funds are used to beef up reserves, that gives them opportunity to be reckless with the freed funds. I guess the bottom line is to bite the bullet and make sure you have the best broker you can find.
I'm not really sure what to tell you, if you have lost all faith in the system. The finical institutions to which you are referring are the banks and the banking system itself. They are going to do what they have been doing forever, use your money to make money. As far as your FCM, I'll just reiterate that Velocity is one of the only FCM's today that does not engage in any business other than the processing of trades for Futures and Commodity Customers. We have no proprietary trading, no customer trading authorization, no exposure to mortgage backed securities, and no exposure to European debt.
If you have any questions about our services at Velocity Futures please send me a private message.
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Late to the party here. I recently discovered that IB no longer sweeps cash from futures contracts sales into an SPIC insured cash 'area'; it is left as 'commodities', therefore leaving it uninsured. Supposedly, they are working on an alternative sweep but the way it was implemented -- unannounced and not officially addressed -- makes me 'nervous.'
With Velocity, does the cash swept from futures contracts sales go solely into FDIC insured bank(s)? Or?
I just noticed they added a maintenance fee on their website. They should at least send an email. If they go bankrupt like MF, they could just change their withdrawal fee to everything in your account if they wanted to.
Does this seem strange or do all brokers do this?
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