tastytrade is overseen by top-tier US regulators, which ensures strong investor protection, but the broker doesn't have a banking background.
Whether a financial provider like tastytrade is safe and legit is a common, important and very legitimate question. After all, you trust tastytrade with your money and savings.
One thing worth bearing in mind: all brokers that you find on BrokerChooser are regulated by at least one top-tier authority. So in this basic sense, tastytrade is of course legit.
Additionally, there are other factors you can take into account when you check the safety of tastytrade, including whether tastytrade is listed on any exchange, provides a two-step login, discloses its financial results transparently, etc.
We collected and summarized the most common questions related to broker safety, allowing you to decide for yourself whether you consider tastytrade safe in your individual circumstances. We also compared tastytrade with two similar brokers.
|Broker listed on stock exchange||No||No||No|
|Annual financial statements on website||Yes||Yes||Yes|
|Mobile two-step authentication||Yes||No||Yes|
|Broker ownership transparency||Yes||Yes||Yes|
|Broker management transparency||Yes||Yes||Yes|
|Broker is audited by the Big Four||No||No||Yes|
Is tastytrade regulated?
Yes, it's regulated by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and the National Futures Association.
Is tastytrade safe?
To be certain, we highly advise that you check two facts:
how you are protected if something goes wrong
what the background of the broker is
How you are protected
|Country of clients||Protection amount||Regulator||Legal entity|
|Australian clients||No protection||ASIC||tastytrade Australia Pty Ltd|
|Global clients||$500,000 ($250,000 cash limit)||FINRA, SEC||tastytrade, Inc.|
Accounts by Australian residents are regulated by the Australian Securities and Investments Commission (ASIC), while all other accounts belong to tasty's US entity and thus fall under the regulation of the SEC and FINRA.
Global clients are entitled to investor protection under the US Securities Investor Protection Corporation (SIPC) the protection scheme. The SIPC protects you from the loss of cash or securities in case the broker goes bust. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash.
A non-US citizen who signed up with tastytrade is treated the same way as a US resident if something goes wrong. The $500,000/$250,000 amount is substantially higher than what is offered by most European investor protection schemes.
Not all investments are protected by SIPC. In general, SIPC covers notes, stocks, bonds, mutual funds, and other investment company shares, and other registered securities. It does not cover instruments such as unregistered investment contracts, unregistered limited partnerships, fixed annuity contracts, currency, and interests in gold, silver, or other commodity futures contracts or commodity options.
Australian clients are not protected by any investor scheme.
tastytrade was established in 2017. The longer the track record a broker has, the more proof we have that it has successfully weathered previous financial crises. By this standard, tastytrade is quite young.
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- About tastytrade
- Trading stocks on tastytrade
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- Crypto trading on tastytrade
- Futures trading on tastytrade
- tastytrade margin minimums
- How to withdraw money on tastytrade
- tastytrade fees
- How to open a tastytrade account
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- tastytrade customer service
- tastytrade app
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