Is It Safe To Buy Stocks With A Broker? - GoFuckYourself.com

Vendot · 11-21-2011, 09:51 AM

Say etrade, schwab, ii, scottrade, etc, etc.....

When you buy from them you buy as a proxy right? They are the named party are they not and you are allocated the shares. Am I right or wrong?

My question is more about the risk involved. I dont know what happened with say MF global but I wonder if the broker goes out of business, do you still own the stocks?

The Heron · 11-21-2011, 11:54 AM

seriously?

raymor · 11-21-2011, 11:54 AM

Yes you still own the stocks. The broker does batch up the buys, so if you buy two shares the broker may wait two minutes while other people buy, then buy 100 shares. For those two minutes only the broker "owes" you the shares.

VenusBlogger · 11-21-2011, 01:42 PM

As long as it's a ECN regulated broker, yes.. I never had a problem with it.

On the other side, a Retail broker is basically a market maker that can manipulate stock price all they want and trade against you.

Internet Guy · 11-21-2011, 02:28 PM

As far as I know, most former MF Global clients funds are still frozen.

I think most of the small guys got fucked hard here. Of course nobody cares until it directly affects them, then it is too late.

Vendot · 11-21-2011, 03:54 PM

Quote:

Originally Posted by The Heron

seriously?

Im not sure what you mean by this but I understood that you dont think my question is valid. Maybe you think im stupid for asking it.

Lets say you buy stock in a Brazilian company (which is listed on the US market) through a US based broker like eTrade.

As far as I understand eTrade owns the stock but it is kept as an allocation for the purchaser ie you. If eTrade goes out of business - do you still own the stock?

Sunny Day · 11-22-2011, 08:40 AM

In the US, if a brokerage firm fails, the govt. steps in. The first recover all stocks & bonds owned by the customers. If there are still missing assets, each customer is insured to $500,000 ($100,000 cash max).
Used to be per account, not sure if that still holds up, so if you have more than that, may want to spread out between brokerage companies.

11-21-2011, 09:51 AM	#1
Vendot Confirmed User Industry Role: Join Date: May 2002 Location: Malaysia Posts: 3,376	Is It Safe To Buy Stocks With A Broker? Say etrade, schwab, ii, scottrade, etc, etc..... When you buy from them you buy as a proxy right? They are the named party are they not and you are allocated the shares. Am I right or wrong? My question is more about the risk involved. I dont know what happened with say MF global but I wonder if the broker goes out of business, do you still own the stocks?

11-21-2011, 11:54 AM	#3
raymor Confirmed User Join Date: Oct 2002 Posts: 3,745	Yes you still own the stocks. The broker does batch up the buys, so if you buy two shares the broker may wait two minutes while other people buy, then buy 100 shares. For those two minutes only the broker "owes" you the shares. __________________ For historical display only. This information is not current: support@bettercgi.com ICQ 7208627 Strongbox - The next generation in site security Throttlebox - The next generation in bandwidth control Clonebox - Backup and disaster recovery on steroids

11-21-2011, 01:42 PM	#4
VenusBlogger So Fucking Banned Industry Role: Join Date: Nov 2011 Posts: 1,540	As long as it's a ECN regulated broker, yes.. I never had a problem with it. On the other side, a Retail broker is basically a market maker that can manipulate stock price all they want and trade against you. Last edited by VenusBlogger; 11-21-2011 at 01:44 PM..

11-22-2011, 08:40 AM	#7
Sunny Day Confirmed User Industry Role: Join Date: Dec 2010 Posts: 1,406	SPIC Insurance In the US, if a brokerage firm fails, the govt. steps in. The first recover all stocks & bonds owned by the customers. If there are still missing assets, each customer is insured to $500,000 ($100,000 cash max). Used to be per account, not sure if that still holds up, so if you have more than that, may want to spread out between brokerage companies.

11-21-2011, 11:54 AM	#2
The Heron Confirmed User Industry Role: Join Date: Apr 2001 Location: Michigan Posts: 4,486	seriously?

11-21-2011, 02:28 PM	#5
Internet Guy Confirmed User Join Date: May 2006 Posts: 402	As far as I know, most former MF Global clients funds are still frozen. I think most of the small guys got fucked hard here. Of course nobody cares until it directly affects them, then it is too late.