Education and Research
If you have been looking for a brokerage firm, then you may have heard of Tastytrade. Tastytrade is a broker that ranks well for options traders. Read here to find out if this broker fits your trading style.
Founded in 2011, Tastytrade (formerly Tastyworks) is a brokerage designed specifically for active options traders. Tom Sosnoff, the creator of popular trading platform thinkorswim, is one of the company’s cofounders.
Tastytrade offers very competitive pricing for options trading as well as a trading platform with some great options-specific features. It also supports cryptocurrency trading, futures trading, and commission-free stock trading.
Is Tastytrade the right broker for you? Keep reading our Tastytrade review to find out.
Cheap options trading is one of the main reasons to trade with Tastytrade. All equity options trades cost $1 per contract to open, with a maximum commission of $10 per leg. Options trades cost $0 to close. There is also a 10¢ clearing fee per contract.
You can still find cheaper per-option pricing at brokers like SpeedTrader, but the differences are slim. It’s nice knowing that Tastytrade’s options fees are capped and that you won’t pay anything to close trades.
Options on futures cost $2.50 per contract to open and options on micro futures cost $1.50 per contract to open. Commissions aren’t capped, but you won’t pay anything to close.
The commission for futures trading is $1.25 per contract. Again, there’s no commission to close. There is a clearing fee of 30¢ per contract and exchange fees are passed onto traders.
Stocks & ETFs
Tastytrade doesn’t charge commissions for stock and ETF trades. There is a clearing fee of 0.08¢ per share.
Tastytrade does not offer trading on mutual funds.
Tastytrade charges 1% of your trade value to open and close crypto trades. The commission is capped at $10 on each side of your trade.
Software and Other Fees
Tastytrade does not charge anything for data or its trading tools.
There is no account minimum at Tastytrade for cash accounts. Margin accounts have the standard $2,000 minimum per industry regulations. There are no ongoing fees, so you can open an account and leave it at $0 if you wish.
Tastytrade Trading Platforms
The Tastytrade website is used for account management. It doesn’t have any trading capability. That said, it’s user-friendly and you won’t have any trouble finding your way around the site. In the top menu, there’s a link to the browser-based trading platform.
The Tastytrade web-based trading platform has a nice-looking interface with a lot of great features.
You can start just by entering a ticker symbol. You’ll immediately see tons of data, including a neat liquidity rating. This rates a stock’s liquidity on a scale from one to five.
In the left-hand column, there are several icons to access different functions. The Trade button produces a window for trading stocks, options, futures, and crypto.
The curve window is a feature options traders will appreciate. You can quickly evaluate the profit/loss for any strike price along with the probability of profit for different trading strategies.
Another nice feature of this platform is that you can roll over your contracts with a single click.
On the right-hand side, a vertical column of helpful data makes trading quick and easy. The information is laid out in an intuitive format, and clicking on a security’s price produces a pop-out trade window.
Overall, Tastytrade’s web platform packs a lot of features, especially for trading options. It’s not the easiest platform to use for new options traders, but Tastytrade offers a really thorough help center to help you learn your way around the software.
Now we come to Tastytrade’s desktop trading platform. It has a lot of similarities to the web platform and is equally 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 more than 100 technical studies as well as dozens of chart styles and drawing tools. You can explore price data stretching back 20 years.
There’s a really handy profit & loss calculator that shows estimates of maximum gain and loss for either stock or option strategies. Below this is the order entry module. Tastytrade supports market, limit, stop-loss, good-til-cancelled, good-til-date, one-cancels-the-other, and one-triggers-the-other orders. You can also trade during extended hours.
Like the web platform, the browser platform offers an options curve and a table of options chains. You can easily add legs to an order by clicking on a bid or ask price. There are a few pre-defined strategies like butterflies, iron condors, and straddles. The selection of ready-to-run strategies is somewhat limited compared to a platform like OptionStrat.
Tastytrade offers a mobile app for iOS and Android devices. Everything in the app is laid out nicely and trading stocks and options is a breeze.
The mobile app has far fewer features than either the web or desktop platforms, which can be a good thing for beginner options traders. The app has a much gentler learning curve.
Tastytrade offers its web-based, desktop, and mobile trading platforms for free with every trading account.
Additional research tools include live and on-demand market commentary videos. You can also follow other Tastytrade users to see what stocks or options contracts they’re trading.
However, Tastytrade is missing out on a variety of other research tools that brokers like Etrade and Interactive Brokers offer. You won’t find a market news feed or professional stock research from analysts. There are also no screeners or strategy backtesting tools. In addition, Tastytrade doesn’t support paper trading.
Tastytrade representatives are available from 7am to 5pm Central by phone, live chat, and email. During a test chat, it took several minutes to reach an agent and several more to get a response.
Executions and Routes
None of Tastytrade’s platforms offer direct-access routing, which will be a disappointment for many experienced traders. There is no Level II data on Tastytrade.
Tastytrade requires an initial margin of 50% or $10 per share (whichever is greater) to short equities. Maintenance margin is 30% or $10 per share (whichever is greater).
What Type of Trader Is Tastytrade Best For?
Tastytrade is designed for active traders who primarily trade options and futures. With a Tastytrade account, you can trade options on equities, futures, and micro futures with some of the lowest commissions around. Tastytrade can even end up being cheaper overall than lower-commission competitors like SpeedTrader since there’s no cost for software or data.
Tastytrade does require traders to bring their own, well-developed strategy to the platform. There’s no demo account, no support for backtesting, and no stock or option screener. Tastytrade also has a relatively steep learning curve.
With this in mind, beginners might be better off learning how to trade options successfully with a more general-purpose trading platform before switching over to Tastytrade. More experienced options and futures traders who follow strategies from Motley Fool Options, Sky View Trading, or Born to Sell will find a lot to like about Tastytrade.
Alternatives to Tastytrade
Tastytrade isn’t the only discount brokerage that caters to options traders. Here are a few other brokers traders might want to explore.
TD Ameritrade offers access to Thinkorswim, the powerful trading platform that Tom Sosnoff built before founding Tastytrade. Thinkorswim offers more research tools than Tastytrade, including paper trading, strategy backtesting, and an options scanner. Options trades cost $0.65 per contract.
Interactive Brokers is another discount brokerage with powerful trading software and tons of research tools. One of the key advantages over Tastytrade is that it offers direct access routing via multiple exchanges as well as Level II data. Interactive Brokers charges options commissions starting at $0.65 per contract.
- Very competitive pricing for stock, options, futures, and crypto trading
- Offers options on futures and micro futures
- Powerful trading platforms for web, desktop, and mobile
- Follow other traders using the platform
- No stock or option screener, strategy backtesting, or research reports
- Lacks 24/7 customer support
- Doesn’t support direct access routing or Level II data