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Tastyworks Review – A Brokerage for Options Traders

By Dave

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Tastyworks Review

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Tastyworks Review

  • Stock Commissions
  • Options Commissions
  • Trading Platforms
  • Education and Research
  • Customer Service
3.8

Summary

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.

About Tastyworks

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.

Tastyworks Pricing

Stock Commissions

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.

Account Requirements

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

Website

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.

tastyworks

Browser Platform

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.

tastyworks2

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.  

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tastyworks3

Desktop Software

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.  

tastyworks desktop

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 desktop2

Mobile Trading

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.

tastyworks mobile

Research Tools

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.

Customer Service

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.

Shorting Stocks

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.

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Our team has reviewed over 200 services. These are our favorites:
📈  Best Day Trading Service
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📉 Best Stock Charts
TradingView
💰  Best Stock Picking Service
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📱  Best Mobile Broker
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This broker can be great for options traders who follow strategies from Motley Fool Options, Sky View Trading, or Born to Sell.

Pros

  • 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.

Cons

  • 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.
Day Trade Review

Dave

Dave has been a part-time day trader and swing trader since 2011 when he first became obsessed with the markets. He focuses primarily on technical setups and will hold positions anywhere from a few minutes to a few days. Over his trading career, Dave has tried numerous day trading products, brokers, services, and courses. He continues to test and review new day trading services to this day.

4 thoughts on “Tastyworks Review – A Brokerage for Options Traders”

  1. Stay away, worst experience ever. Didn’t give me a chance to wire additional funds and didn’t call me before closing my short position in a matter of minutes. Don’t see them staying in business.

    Reply
  2. I have been using the platform for a little over a year and so far I’m very impressed and a happily satisfied customer. I give it 4.5 out of 5 stars.

    For option premium sellers and some types of futures trading it doesn’t get much better, for other strategies it may disappoint. The reasons why TastyWorks is a great brokerage platform for certain niche traders are simple yet profound:

    1) FEEs
    TastyWorks offers fees that are unmatched in the industry and that really do give an edge in using a premium selling strategy to a smaller account size. At $1.00 to open per option contract and capped at $10 with no cost to the closing side of a position, you don’t just do better than other brokerages, you do significantly better. It makes defined risk strategies common to smaller accounts with limited buying power such as iron condors and credit spreads way more feasible than any other brokerage. Of course a larger account will also benefit greatly too with the ultra low cost fee structure.

    2) DESKTOP PLATFORM
    The platform is a little quirky at first, just like any “new to you” technology, but once you get used to it and apply it for what it is designed to do, mostly options selling strategies and/or futures trading, especially pairs style trades, it becomes an invaluable resource in structuring a profitable trade. The platform makes it easy to analyze the greeks and probabilities of a trade as well as forecasting the “what-will happen to my portfolio” if the “what-if’s” of a position play out. In other words the analyze features on the platform can be used as a powerful risk management tool. This summary pertains to their desktop platform only. Their mobile device platform needs some work and as far as I know they are updating it with much needed improvements.

    3) HIGH SPEED FILLS
    Trade fills definitely seem faster with better prices than my previous brokerage experiences.

    4) CUSTOMER SERVICE
    I have had nothing but great experiences dealing with the team at TW. More than once I needed to call them in order to execute trades as I was away from my computer and their mobile app (see cons below) is quite frustrating as of the time being. Every time I have had to call them for trade assistance I have been pleased including one time when I needed to get a lot of positions executed and was able to do so fast and at great prices. Also for some technical questions and the occasional general help needs I have found them to be a pleasure to deal with.

    5) SIMPLICITY
    They advertise as a low fee brokerage without the bloat and catering to the retail client who makes frequent trades. This they excel at and
    this is a great place to play if you are using any premium selling strategies for your trading.

    A few Cons…

    1) Mobile Device App for Trading
    The app is only really good for watching your p/l and the market prices. Trading on it is a nightmare and I avoid it at all costs now after a few bad order entries due to its cluttered and non-intuitive interface.

    2) Limited functions and products
    This to me is more of a pro but for some looking to trade penny stocks, otc fixed income, mutual funds, etc…TW doesn’t offer these products so if you do like to play in those sandboxes keep this in mind. They also don’t have any advanced features like ToS for backtesting and all the bells and whistles of TA and fundamental analysis.

    BOTTOM LINE: TW is a great brokerage for some types of traders. I think of it a lot like a Southwest Airlines of the brokerage world….it is a no frills-“get me to the destination safely at the most competitive price”. If your destination is a profitable and cost effective option premium selling strategy or futures trading strategy than TW is the airline you want to be flying to get there. Nothing fancy but very worthwhile for the option premium selling and futures trading niche.

    Reply
  3. I missed, or failed to understand; what is the minimum fund requirement in my account for an options trader?

    Reply

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