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Is Tastyworks SIPC Insured? An Authentic Take

Is Tastyworks SIPC Insured

When it comes to investing your hard-earned money, it’s important to choose a brokerage firm that prioritizes the safety of your investments. One crucial aspect to consider is whether the firm is backed by the Securities Investor Protection Corporation (SIPC) insurance. 

In this article, we will delve into the details and provide you with a comprehensive understanding of Tastyworks’ SIPC insured status. We will explore the purpose of SIPC insurance, its coverage, limitations, and how it applies to your portfolio. 

By the end of this article, you will be equipped with the knowledge necessary to make informed decisions about your investments.

Is Tastyworks SIPC Insured?

Yes, Tastyworks is SIPC (Securities Investor Protection Corporation) insured. This protection is designed to safeguard the customers’ funds and securities in the event of broker failure. 

Specifically, up to $500,000 in total value (including a $250,000 limit for cash) is protected per customer for all accounts at the same institution. 

It should be noted that it does not cover investment losses in the market. The primary goal of SIPC is to return customers’ cash and securities if the broker goes out of business. In simple terms, if Tastyworks fails, your investment and cash up to $500,000 are protected. 

Please be reminded that leveraged and derivative positions such as options and futures are not covered.

SIPC Insurance

Purpose of SIPC Insurance

SIPC, short for Securities Investor Protection Corporation, is a non-profit entity established by Congress to provide limited protection to customers of brokerage firms in the event of a firm’s insolvency. The primary purpose of SIPC insurance is to protect investors from the loss of cash and securities held by a brokerage firm.

SIPC Coverage

SIPC coverage at Tastyworks extends to both cash and securities, ensuring that your investments are protected to a certain extent.

SIPC covers investments such as stocks, bonds, options, and mutual funds. However, it’s important to note that investments such as futures and limited partnerships are not covered by SIPC. Therefore, ensure you understand what investments are covered by SIPC.

SIPC Protection Limits

It’s important to highlight that SIPC coverage has limitations and exclusions. While SIPC provides protection for up to $500,000 per account type, this only covers a maximum of $250,000 in cash. The $500,000 limit covers two types of accounts: $500,000 for securities and $250,000 for cash. 

This means that if your account holds a combination of cash and securities valued above $500,000, the SIPC coverage may not fully reimburse you for your losses. To further complicate matters, SIPC coverage does not extend to losses incurred due to market fluctuations, poor investment performance, or the failure of individual securities.

Regulatory Oversight

Beyond SIPC coverage, Tastyworks is subject to regulatory oversight by key authorities such as the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and the National Futures Association (NFA). 

These regulatory bodies ensure that Tastyworks operates within the boundaries of the law and adheres to strict compliance standards. 

By choosing Tastyworks as your brokerage firm, you can have confidence in their commitment to maintaining a safe and transparent trading environment.

Investor Education

Tastyworks places emphasis on investor education and provides various resources to help customers make more informed investment decisions. 

They offer educational webinars, tutorials, articles, and a user-friendly platform that caters to both novice and experienced traders. 

By taking advantage of these resources, you can enhance your understanding of the investment landscape and make smarter trading choices.

Additional Protections

In addition, Tastyworks offers additional protection to investors to ensure their satisfaction with their investment. These include:

Margin requirements – Tastyworks has margin requirements in place that ensure that you won’t lose all your money trading on margin.

Clearing firm risk – Tastyworks uses Apex Clearing as its clearing firm to separate the customer accounts from the broker-dealer’s accounts. 

This means that customer assets will not be used to cover liabilities of Tastyworks in the unlikely event that Tastyworks goes bankrupt.

Thorough documentation – Tastyworks ensures that all disclosures and agreements are comprehensive and fully transparent.

How SIPC Insurance Affects Your Investments

SIPC coverage is an important factor to consider when safeguarding your investments. It provides a safety net in the event of a brokerage firm’s insolvency. Here are some key points to understand about how SIPC insurance affects your investments:

Types of Accounts: SIPC coverage applies uniformly to various types of accounts, including cash, margin, and retirement accounts. This means that regardless of the account type, your investments are protected up to the $500,000 limit per account.

Limitations on Cash: It’s important to note that the $500,000 SIPC coverage includes a maximum of $250,000 in cash. If your account holds a higher amount of cash, the excess may not be fully covered by SIPC insurance

This is because SIPC coverage is primarily designed to protect against the loss of securities, not large cash balances.

Considerations for Margin Accounts: Margin accounts involve borrowing against the value of your securities, which can impact the extent of SIPC coverage. 

In certain circumstances, the coverage may be affected by the borrowed funds. It’s crucial to understand the specific terms and conditions of margin trading and how it relates to SIPC coverage.

Retirement Accounts

Retirement Accounts: Retirement accounts, such as Traditional IRAs and Roth IRAs, receive the same level of SIPC coverage as any other account. This means that your retirement investments are protected up to the $500,000 limit. 

It’s worth noting that SIPC coverage doesn’t replace the need for other retirement account protections, such as those provided by the Employee Retirement Income Security Act (ERISA).

In summary, SIPC insurance offers a level of protection for your investments, but it’s important to be aware of its limitations and applicability to different types of accounts. 

By understanding how SIPC coverage impacts your investments, you can make informed decisions to ensure the safety and security of your portfolio. 

It’s always advisable to consult with a financial advisor or conduct thorough research to fully understand the implications of SIPC insurance in relation to your specific investment strategy and goals.

Frequently Asked Questions

Is Tastyworks legit and safe?

Yes, Tastyworks is a legitimate brokerage firm regulated by key authorities such as the SEC, FINRA, and the NFA. They prioritize investor safety and provide various measures to protect your investments.

Who owns Tastyworks?

Tastyworks is owned by the parent company, Dough, which was founded by options trading expert Tom Sosnoff and his team.

What is the minimum deposit for options trading at Tastyworks?

Tastyworks requires a minimum deposit of $2,000 to start options trading. However, this amount may vary depending on the type of account and trading strategy.

How many customers does Tastyworks have?

As of the latest available data, Tastyworks has a substantial customer base consisting of thousands of active traders.

Does Tastyworks provide FDIC insurance?

No, Tastyworks does not provide FDIC insurance. FDIC insurance applies to deposits held in banks, not brokerage accounts.


Ensuring the safety of your investments is of paramount importance when choosing a brokerage firm. We have explored the SIPC insured status of Tastyworks, shedding light on the protections provided, limitations, and how they apply to your investment portfolio. 

With SIPC coverage, along with regulatory oversight, investor education initiatives, and a transparent trading platform, Tastyworks offers a comprehensive suite of protections for your investments. 

If you have any further questions or concerns about Tastyworks or other brokers, be sure to conduct thorough research or speak to a financial advisor before making investment decisions.