Education and Research
If you have been looking for a brokerage firm then you may have heard of Tastyworks. Tastyworks recently entered the broker world and is part of online financial network Tastytrade. Read here to find out if this broker fits your trading style.
Founded in 2017, Tastyworks is a very recent entrant into the world of brokerage firms. It is part of Tastytrade, an online financial network that itself began just in 2011. Tom Sosnoff, the creator of thinkorswim, is one of the company’s co-CEO’s. Here’s a rundown on this new broker.
At Tastyworks, stock and ETF transactions cost $5 on the opening side (for unlimited shares) and $0 on the closing side. Regulatory and exchange fees are passed onto the customer. Mutual funds aren’t available, so there’s nothing to report on them. This pricing is pretty much in line with comparable brokers like ETRADE, TD Ameritrade, and Schwab.
Options and Futures
Equity options are $1 per contract on the open side and $0 on the close side. There is a 10¢ clearing fee per contract. Tastyworks recently established an option commission cap of $10 per leg. While this pricing is competitive when compared to discount brokers, there are other brokers (such as SpeedTrader) that offer better rates.
Although Tastyworks doesn’t offer mutual funds, it does have futures trading. The commission is $1.25 per contract, and here, the charge is applied to both sides. There is a clearing fee of 30¢ per contract, and exchange fees are also passed through.
There is no account minimum at Tastyworks for cash accounts. Margin accounts have the standard $2,000 minimum per industry regulations. There are no on-going fees, so you can open an account and leave it at $0 if you wish.
Software and Other Fees
On top of this pretty good commission schedule, tastyworks does not charge non-professionals anything for data or its trading tools, which we will now look at.
Tastyworks Trading Platforms
The Tastyworks website is used for account management. It doesn’t have any trading capability. I did like the user-friendly feel to it, though. It was easy to find my way around the site. In the top menu, there is a link to the browser platform, which we will look at now.
The browser platform has a very nice looking interface with a lot of great features. After entering a ticker symbol, data is populated. One feature that I really liked was a liquidity rating, which goes up to five stars.
In the left-hand column there are several icons with a variety of functions. There is a trade button, which of course produces a window for trading. And this is not just for stocks and options, but futures also.
On the right-hand side is a vertical column of helpful and brief information that makes trading quick and easy. I liked how the information was laid out in an intuitive format. Clicking on a security’s price here produces a pop-out trade window.
Now we come to Tastywork’s desktop platform. It too is appealing to the eye. On the left-hand side sits a watchlist, which can be changed from notable stocks to liquidity or to some other pre-defined list.
In the center is where most of the action takes place. Here, there is a graph, and I was impressed with the tools it offers. There are several technical studies (I counted more than 100), chart styles, and drawing tools. Price history stretches back to 20 years.
There’s a really handy profit & loss calculator that I found very useful. It is able to show estimates of maximum gains and losses for either stock or option strategies. At the bottom of this area sits an order ticket. I was disappointed to find only a few order types: market, limit, and stop. Extended hours are available, though.
Option chains are on the desktop platform (just as they are on the browser platform). I was able to easily add legs to an order by clicking on a bid or ask price. There are a few pre-defined strategies, although I only counted 8 of them.
Tastyworks offers a mobile app for iPhone (6 and higher) and Android (Nexus 6 or better). I was impressed once again with Tastyworks’ technology. Everything is laid out nicely and trading stocks and options is a breeze. Actually, using the mobile app is even easier than the other two platforms.
All three platforms come with Tastytrade, which offers live and on-demand videos of market commentary. There’s also a follow feature. I was able to use this to take a look at trades of other tastyworks clients. I thought these research tools weren’t nearly as good as stock reports from independent analysts, which tastyworks doesn’t offer.
Tastyworks representatives are available from 7:00 am till 5:00 pm, CST. They are available on the phone and on-line chat during these times. The broker also offers e-mail service. Tastyworks has a technology department for IT issues. During a test chat, it took several minutes to reach an agent and several more to get a response.
Executions and Routes
Unfortunately, none of Tastyworks’ platforms offer direct-access routing, and this is going to disappoint many day traders.
Tastyworks requires an initial margin requirement of 50% or $5 per share (whichever is greater) to short an equity priced above $5. For equities below $5, the initial requirement is 100% or $2.50 per share. Maintenance is 30% for stocks above $5 and 100% for stocks below that level.
Type of Trader Tastyworks Is Best For
Tastyworks would be a great broker for traders who need robust technology and who place occasional trades with a large number of shares or contracts. The brokerage was designed with options traders in mind but also caters to stock traders.
- Great pricing schedule for high-volume stock and option traders.
- Excellent platforms.
- Account management is easy with the broker’s user-friendly website.
- One of the few securities brokers to provide trading in futures and options on futures.
- No robo-advisory service. Traditionally-managed accounts also aren’t available.
- Lacks 24/7 customer support.
- Although ETF’s are free to sell, there are no funds that are commission-free on both sides; and this puts tastyworks behind its competitors.