Hypnos7's  Instablog

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A scientist, trying to save a little on the side. I am interested in high alpha trading strategies requiring little time commitment.
  • Schwab margin accounts and (re)hypothetication 4 comments
    Dec 12, 2011 8:25 AM

    After chatting with the Schwab staff, I got clarification on their (re)hypothecation policies for margin accounts.

    1)  They only lend out assets from your account if you have a margin balance, i.e. you owe Schwab money.

    2) The only lend the assets internally, e.g. to other traders for shorts, not to cover external debts.

    Hope this helps!

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  • BK0324
    , contributor
    Comments (152) | Send Message
    Is it theoretically possible for someone at Schwab (or other discount broker) to pull a Lehmann or MFG or even Madoff type fraud or are there too many checkpoints built in?
    12 Dec 2011, 08:50 AM Reply Like
  • Hypnos7
    , contributor
    Comments (137) | Send Message
    Author’s reply » Through fraud anything is possible.
    12 Dec 2011, 09:02 AM Reply Like
  • BK0324
    , contributor
    Comments (152) | Send Message
    Thanks ... I mean - YIKES! Anything one can do other than keep close check on account?
    12 Dec 2011, 09:04 AM Reply Like
  • Hypnos7
    , contributor
    Comments (137) | Send Message
    Author’s reply » Keep gold bullion under your pillow along with your gun? Buy farmland?
    12 Dec 2011, 09:16 AM Reply Like
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