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SIPC Insurance

  #1 (permalink)
 
DavidHP's Avatar
 DavidHP 
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If this is in the wrong forum, pleas move it.

I came across this information and thought maybe others would find it interesting.
This is from the SIPC website:

" SIPC does not protect commodity futures contracts (unless held in a special portfolio margining account)"

I was under the impression that Interactive Brokers provided this protection but that may be incorrect.

Perhaps someone such as @mattz can respond.

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  #3 (permalink)
 
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DavidHP View Post
If this is in the wrong forum, pleas move it.

I came across this information and thought maybe others would find it interesting.
This is from the SIPC website:

" SIPC does not protect commodity futures contracts (unless held in a special portfolio margining account)"

I was under the impression that Interactive Brokers provided this protection but that may be incorrect.

Perhaps someone such as @mattz can respond.

As far as I know, Futures does not fall under SIPC. The margin accounts that are referenced here related to equities. There are accounts in equities where you can leverage and trade on margins. They may have a high-cost structure such as interest for the amount borrowed, etc.

We deal with large and small FCMs and the customer can choose whatever is appropriate for him/her.

Thank you,
Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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 DavidHP 
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mattz View Post
As far as I know, Futures does not fall under SIPC.

Maybe it is wise to keep futures trading account small and transfer large balances to other accounts?

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DavidHP View Post
Maybe it is wise to keep futures trading account small and transfer large balances to other accounts?

It boils down to your activity and margin requirements. While I understand that you want to protect your capital, you need to understand that in a leveraged environment like Futures you will go through drawdowns, and you may need to add capital in case of consecutive losses. One thing you do not want to have is a deficit or a margin call. Like I said, you have choices out there as far as FCM size, leverage they provide for day trading, and other variables that you consider pertinent.

Thanks,
Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. past performance is not indicative of future results.

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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  #6 (permalink)
 
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 Blash 
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DavidHP View Post
Maybe it is wise to keep futures trading account small and transfer large balances to other accounts?

Real quick (and sorry if a bit ) as I don't have much time but I get what I consider an insane amount of monthly interest for my Interactive Broker account so I keep a health chunk there. Insane compared to my bank's money market account, for example. Like family of four lunch 3 or 4 times a month, quick service...insane.

Thomas Peterffy talks about it here....




Here is the part I'm referring to.....


Quoting 
Unlike most other brokers, we pay interest on overnight cash you have in your brokerage account above $10,000 if the value of all assets in your account exceeds $100,000. We pay substantially more interest than most banks pay on similar deposits.



Ron

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  #7 (permalink)
 
DavidHP's Avatar
 DavidHP 
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Blash View Post
Real quick (and sorry if a bit ) as I don't have much time but I get what I consider an insane amount of monthly interest for my Interactive Broker account so I keep a health chunk there. Insane compared to my bank's money market account, for example. Like family of four lunch 3 or 4 times a month, quick service...insane.

Here is the part I'm referring to.....

Unlike most other brokers, we pay interest on overnight cash you have in your brokerage account above $10,000 if the value of all assets in your account exceeds $100,000. We pay substantially more interest than most banks pay on similar deposits.



Ron

Thanks Ron,

Yes that is what I was referring to.
If you have substantially more in the account than you need for margin calls, trading is it wise to keep it unprotected by insurance.
I know a lot of brokers/etc are very secure in their financial position but can you really risk not having it protected if they collapse?

Would it not be better to keep it liquid in other accounts than to risk it.

It is my understanding that IB 'moves' the money into insured accounts when excess funds are in the account.
(I have not confirmed this with them)

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Last Updated on August 22, 2018


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