Hedging between two accounts many brokers don't accept it
No broker should accept that.
Let me explain:
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Let's say it's 1977 and you are named Hillary Clinton; you are 30, and you husband is a political up and comer.
Someone of means wants to help you without being identified.
He requests you quietly open a commodities trading account at a particular Introducing Broker he knows and trusts.
You dutifully do so because you trust this gracious friend; and do so with a modest deposit of $1000.
http://en.wikipedia.org/wiki/Hillary_Rodham_cattle_futures_controversy
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Spare me the details; but, suddenly you find yourself Long or Short Cattle Futures in your account.
Something you know absolutely nothing about, being a young Wellesley educated college grad.
Later, your futures positions are closed with a gigantic profit of $100K.
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Unbeknownst to you (sweet young lady), your benefactor has opened another account, wherein he takes equal and opposite positions.
Your gains have become his loss without your direct knowledge.
Moreover, at the close of trading each day the opposing trades held in the IB's bulk trading account are assigned to each private account in a particular way.
Voila!
Suddenly, and to your surprise, you have banked a magical $100K gain in the futures market; what a joy!
Meanwhile, your benefactor has taken a $100K loss, which after tax has cost him maybe $50K net; and was glad to have accomplished.
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In case you don't recognize this behavior, it is called
MONEY LAUNDERING.
35 yrs. ago it was nearly impossible to detect, due to shear volume of paper trade data, coupled with limp audit technology.
However; though routine, it was just as illegal and unethical as it is now. It was just very much harder to detect.
Today, regulatory authorities have placed the burden of discovery and reporting upon the regulated brokers, who are obligate to stop it.
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So don't be surprised if you attempt to engage in similar activity, you wind-up appearing on an Interpol List of Wanted Persons.
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Similarly, don't be surprised if a dishonest broker accuses you of such, simply to avoid paying out gains you earned; even when such charges are completely untrue.
Solution? 1-broker, 1-account.
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Live free or die.
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AI