DTB Etrade probably will not go bankrupt, they have sold and written most of the garbage. bad management to get into this mess, do not hear to much from the hedge funds now who were screaming at TD and demanding amertrade to buy out /merge with etrade, good way to lose 50%.
anyways as for the investors, I have my smallest account at etrade canada and not worried. first they should not go under.
here is what happens.
US investor
First most account should be segrated from the brokerage. so they cannot claim any owenrship to equities or bonds.
in most cases the SIPC would step in and try to transfer the accounts, to another brokerage.
if there was a shortage they may step in financially $100,000 cash and $500,000 account.
also Etrade claims to have client insurance and most brokerages have this feature, how much and the worth of it is on the face of it in the millions.....however we do know what the bond insurance means....lol.
SIPC is a federal body and stands for US Securities investor protection corporation.
In Canada the Canadian Investor Protection Fund CIPF covers investors up to 1 million.
Etrade Canada also claims they have insurance that covers each client up to 9 million.
Trust the CIPF much more than anything etrade may say though.
Would like to point out that if etrade went broke, unlikely, (though you should keep an eye on the stock), then though you would get your money as long as it is $500,000US, or $1 million cdn. account. (not counting etrade private insurance.).
also most would not be bothered because they all (should ) be in segerated account held in trust.
if they did go broke the assets may be transfered to another brokerage quickly, however believe SIPC (has stepped in 4 times, maybe more) anyways in one case it did take months, before the assets were unfrozen..... so would hate to have a a highly volatile stock that you could not trade (for a matter of months).
my smallest account is with etrade Canada and it is not a trading account for me, so I will leave my money there.
just go to show how management can screw up a great business model by getting involved in a business they should not have been in, the first place.
note: would never buy the stock however can see why option trader would make a trade, for a few thousand, however high risk trade, reward/risk.
thanks
selkirk
