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Old Mar 20th, 2012, 06:49 PM   #1
jackpearson
 
 
Join Date: Jul 2006
Posts: 321
If you have a trading account with $250k cash in it & an IRA account with the same broker as the trading account with $250k cash in it, are you fully SIPC insured at that broker for both the trading account & the IRA account? OR, are you just SIPC insured for $250k of the total $500k you have at that broker?
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Old Mar 20th, 2012, 06:58 PM   #2
rmorse
 
 
Join Date: Apr 2011
Location: New York, NY USA
Posts: 1,056
Quote:
Quote from jackpearson:

If you have a trading account with $250k cash in it & an IRA account with the same broker as the trading account with $250k cash in it, are you fully SIPC insured at that broker for both the trading account & the IRA account? OR, are you just SIPC insured for $250k of the total $500k you have at that broker?
I believe SIPC goes by tax ID. So your IRA and your personal account have the same SS#, that would be one claim. If you do your person trading through an LLC with an EIN #, that would be a second claim with SIPC.
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Old Mar 20th, 2012, 07:38 PM   #3
newwurldmn
 
 
Join Date: Apr 2011
Posts: 3,421
I thought there is no issue with IRA's as they are cash accounts and thus securities are held in your name not the firms.

Is that right Bob?
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Old Mar 20th, 2012, 07:41 PM   #4
jackpearson
 
 
Join Date: Jul 2006
Posts: 321
Quote:
Quote from rmorse:

I believe SIPC goes by tax ID. So your IRA and your personal account have the same SS#, that would be one claim. If you do your person trading through an LLC with an EIN #, that would be a second claim with SIPC.
How about both the trading account & an IRA account, $250k cash in each, with the same retail broker? Will both be SIPC insured?
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Old Mar 20th, 2012, 07:53 PM   #5
rmorse
 
 
Join Date: Apr 2011
Location: New York, NY USA
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Quote:
Quote from newwurldmn:

I thought there is no issue with IRA's as they are cash accounts and thus securities are held in your name not the firms.

Is that right Bob?
SIPC covers cash and securities lost or stolen. Futures accounts are segregated accounts, but someone at MF Global still took the assets. So, you still need SIPC to protect cash accounts.
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Old Mar 20th, 2012, 08:00 PM   #6
rmorse
 
 
Join Date: Apr 2011
Location: New York, NY USA
Posts: 1,056
Quote:
Quote from jackpearson:

How about both the trading account & an IRA account, $250k cash in each, with the same retail broker? Will both be SIPC insured?
I'm not claiming to be an expert on this, but I have called SIPC in the past. At one broker, each "person" is allowed one claim. If you have multiple accounts, it would be included in one claim. Your max protection under SIPC is the SIPC limits on your combined accounts. SIPC only covers the loss, you can't assume the loss is total, so you might be fine anyway. But, you won't get paid for both over the SIPC limits if the loss needs to be replaced.

Again, if you use an entity for your personal trading, it would be considered another "person", as long as you use the EIN#.
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