Brokers, particularly the ones probably most of us have access to because of our limited funds might market themselves as having segregated accounts, reality is they don’t. You have to read their fine print in their PDS, most will read like this;
The money which you pay into the client moneys trust account is not kept there but is withdrawn to pay IC Markets before the CFDs are issued to you, even if you pay more than the minimum Margin required. Your client moneys cannot be retained in the client moneys trust account because you need to pay IC Markets before the CFD is issued to you. You can minimise your loss of funds held on trust for you by only paying into the client moneys trust account the amount you are prepared to lose (See section 4.6). Moneys withdrawn from the IC Markets Trust Account are either to pay IC Markets or to pay you. Moneys withdrawn to pay IC Markets are IC Markets’ moneys (and are not held for you). Once your moneys are withdrawn from the IC Markets Trust Account you become an unsecured creditor of IC Markets and you lose all of the protections you had when your client moneys are in the IC Markets Trust Account.
On top of this they will also tell you to minimize your risk by only depositing what you require too trade to meet margin requirements;
You have the risk that IC Markets will not meet its obligations to you under the CFDs. IC Markets’ CFDs are not Exchange traded so you need to consider the credit and related risks you have on IC Markets. As IC Markets is the CFD product issuer, you are exposed to the financial and business risk, including the credit risk associated with trading with IC Markets. If IC Markets becomes insolvent, IC Markets may be unable to meet its obligations to you. IC Markets believes that your counterparty risk on IC Markets is low, especially due to its Hedging Policy, Margin policy and risk management. The potential adverse outcome of this risk is very significant to you since, if it occurs, you could lose all or some of your investment. [B]You can [/B][B]minimise[/B][B] your counterparty risk on IC Markets by limiting the amount you pay IC Markets, trading prudently and requesting payment to you of any surplus in your Account which is not required for prudent Margin management.[/B]
So, as I used to think, by only depositing sufficient funds to meet margin requirements I would minimize the risk I held with my broker thus preserving my capital.
But did I just shift the risk back to my bank? Well yes, cause my accounts got hacked. And this could happen to anyone. So unless you have a valid point in regards to the original question posed
views about capital preservation and pro’s n con’s of different methods.
Take the stupid one line comments you are so used to posting that is of no value to anyone, only make people dumber and blow smoke up someone else’s a|s|s.