An account happens when you deposit money (legally) into a registered investment account at a known financial institution. An account comes in many flavors, the most sweetly vanilla of which are your basic and checking and savings accounts at a bank like Wells Fargo, Bank of America, Bank of Uzbekistan. A spicier flavor of an account type is a margin account, usually held in the form of stocks deposited into a stock broker's margin account.
Why is margin good? (And it has nothing to do with butter.) It's good because you can borrow in most systems up to 50% of the value of the securities you have in that account. Since the various terrorist acts of modern times, the level of inspection, disclosure, and legal strictures has increased dramatically, so if you have an actual registered-for-realz account, expect that you are sending loving letters to the NSA every time you trade.
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Finance: What is an Omnibus Account?110 Views
Finance a la shmoop. What is an omnibus account?
Herbi just eats leaves, Carni just eats meat, Omni well it's pretty much [Different buses eating stuff]
everything. So yeah an omnibus as in bus-i-ness or business account services is
a bunch of investors who've all pitched in or wired in their capital to become a
percentage owner of that omnibus account. Why would people do this? Scale, volume,
discounts size, heft. When you have a lot of money in an account basic things like [Lots of money in a suitcase]
audit and legal fees and brokerage services and the fees with them and
other one-off costs get amortized across a lot of people in dollars invested [Definition of Amortization]
rather than being laid entirely or solely on one investor where they can
then be a meaningful percentage of the total and with an omnibus account you [Bus labelled Omni eating leaves]
also get anonymity since it's a broker dealing in street name with the account [Anonymity stamp]
interfacing with the street well investors can live if they want in the
lovely dark shadows of Erewhon. Omnibus accounts are sort of like your own [Full moon in a dark sky]
custom mutual fund without the whole nav, net asset value stamp requirements at
the end of each trading day and all the other regulations and filings and legal
crap needed for publicly offered securities it's like having a fully [Book labelled my very own omnibus account]
gassed up bus with a working GPS and Waze system you can drive anywhere you [Guy sat on a bus]
want on the investing landscape you don't have to tell anyone outside of
your own partners about it, and it works great as long as you all want to eat the
same kind of financial cooking.. [Omni asking Carni if he is going to finish his food]
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