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Ok, we know about regulations, authorities. About how much capital you broker have (at least in beautiful figures).
But the BIG question is? where is you Broker's money?
Cash on the basement?
Or probably with
Shares?
Banks?
Commodities?
My point:
Let's say my broker had 500 millions on capital, net cash, and that money was with with... Bear Sterns or Lehman?
Maybe with some European Bank?
No matter where the money is but due the current situation what if my broker can't retrieve their excess net capital from the bank?
Or what if my broker invested a huge percent of their money with some Hedge Fund? One that bought OIL at $135.
Net capital could be cash or right to perceive, not necessarily cash. Remember FXLQ case.
Answers welcome.
Ok, we know about regulations, authorities. About how much capital you broker have (at least in beautiful figures).
But the BIG question is? where is you Broker's money?
Cash on the basement?
Or probably with
Shares?
Banks?
Commodities?
My point:
Let's say my broker had 500 millions on capital, net cash, and that money was with with... Bear Sterns or Lehman?
Maybe with some European Bank?
No matter where the money is but due the current situation what if my broker can't retrieve their excess net capital from the bank?
Or what if my broker invested a huge percent of their money with some Hedge Fund? One that bought OIL at $135.
Net capital could be cash or right to perceive, not necessarily cash. Remember FXLQ case.
Answers welcome.Good question. I am also thinking the same thing, where the "forex Brokers" keep their money.