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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Joseph G. who wrote (9010)	11/22/1997 7:41:00 PM
From: vegetarian	Read Replies (1) \| Respond to of 18056

>>OTOH, if your broker is bunkrupt, you get your assets only within insurance limits, and then only after a while. Assuming that insurance Co. is not bunkrupt too. Cash balance insurance brokers carry is not too huge usually. And, a broker is much more likely to go bust than exchange or clearing Corp. (stocks are cleared too).<< That brings the following question to my mind: Let us say that I have a stock in a brokerage account on which I am currently 50% down and I had bought it using cash (without any margin to make things simple) and at this time the broker goes bankrupt. So what amount do I get paid by the insurance company? Do I get the original amount that I paid for purchasing the stock, the value of the stock at the time brokerage went bankrupt, or do I get the stock itself? If the answer is the stock itself, is there a condition under which it may not be possible to get the stock back? Also what might happen to time limited derivatives as options held in brokerage houses? When the broker goes bankrupt I suppose one would lose access to trading them and they can potentially expire what are insurance implications in such a case? My apology if the answers are obvious, they are not obvious to me and would be interested in knowing. Thanks