USA account

[def]

good question/point. they are segregated with all client funds as required by law. as you know IB has strict margin requirements (requires margin upfront before a trade) and auto liquidates positions if an account falls below maintenance levels. This type of margining system prevents a rogue trader from causing large losses for the firm.

 

[Grant]

UK-based clients trading through a US-based, US broker are not afforded the same protection as US-based clients trading through the same broker.

UK-based clients trading through a UK office of a US broker are protected by FSA rules re compensation, DEPENDING on the clients' classification, ie Non-customers (marker counterparties); Customers - Non-private, ordinary business investors; Private - small businesses (trade customers), Private - individuals; Private - expert. And so on.

On a very simple level only Private Customers (individuals) are protected. However, to avoid the need to segregate clients' funds from the firms, some firms may designate private customers as 'experts', whether the clients like it or not. What this means is, if a firm is short of funds, it can use the clients without recourse. Further, they'll get nothing from the Investors Compenastion Scheme if the firm goes down.

Barings and Enron were well capitalised

 

[llew]

re

llew, is there any reason why you opened a $ account for the mini Dow rather than use IB in £?

Didn't meet the criteria that IB required for opening an account ,no monthly fees was another just pay commision on each trade and the trading platform is free.
Llew