John left a comment pointing out that SIPC insurance does not necessarily cover everything in a brokerage account. He specifically mentions margin accounts, and links to this pdf. (Thanks John!)
I called Etrade this morning to close my margin account. I was on hold for 10 minutes and got through to a very friendly customer service rep who took care of this for me. I actually have no activity on margin so I don't think this mattered for me, but since I don't intend to use the margin account anytime soon, I closed it to keep things simple. If you do have and use a margin account (you should not have one by default- I set mine up years ago, but never used it), make sure you understand what is and is not covered by SIPC.
The pdf mentions:
"Excluded from coverage are: unregistered investments (i.e., limited partnerships), commodities, currencies and options. And remember, SIPC doesn’t protect against investor
mistakes."
If you have any questions or are at all uncertain about what is and is not covered by SIPC in the event your brokerage closes shop, even if you use a brokerage other than Etrade, WylieMoney strongly encourages you to follow up with a financial professional!
I, for one, hope Etrade pulls through. I have certainly had issues with them, but on the whole, their interface is great, the funds they offer are good, their costs are reasonable (as long as you meet the minimum balance requirements!).
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