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?

seriously?

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.

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.

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.

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?

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.