Finding a trustworthy trading partner is essential if you want to put the money you have worked so hard to acquire toward a brighter future. Tastyworks is one of the undiscovered treasures that are also deserving of your attention, even though other platforms with similar functions may have received more attention in recent times. Although the name sounds like something that would come straight out of a chocolate factory, in reality, it refers to a trading and investment platform for seasoned professionals. Now, you can read our evaluation of Tastyworks to find out if you will join the ranks of those satisfied customers.
List of Contents
Minimum Balance: $0
Cost per stock trade: $0
Cost per options trade: Buy commissions are $1 per contract and sell commissions are $0, although commissions are capped at $10 per leg.
Promotion: Several effective promotions
Commission-free ETFs: All
No-transaction-fee mutual funds: None
Securities: Stocks, ETFs, Options, Cryptocurrency, Futures, and Futures options
Customer service: By phone, chat, and email on Monday-Friday 8 a.m.-6 p.m. ET.
Account fees: $75 transfer out fee, $60 IRA closing fee
Mobile applications: Tastyworks app on the Apple App Store and Google Play Store.
Tastyworks is an online brokerage platform that focuses on options, futures, and stock trading as its primary areas of expertise. Importantly, the rapidly expanding online broker is a division of Tastytrade, which is one of the most successful and rapidly expanding online financial networks in the world. The creators of Thinkorswim were inspired to create Tastyworks. They create it to create a platform that provides the advanced capability for the execution of complex options trades and strategies. The interesting point is that it takes a DIY (do-it-yourself) approach and supplies you with technology and education. Moreover, it also supports the need to be successful when operating on your own for the most part.
Nevertheless, to assist you in determining whether or not Tastyworks is an appropriate solution for your requirements, we are going to deeply examine its features.
- The phone support line for Tastyworks is available Monday through Friday, between the hours of 7 am and 5 pm. Time in the Central Time Zone, with no hold time.
- You also have the option of speaking with a live broker.
- It is provided with chatbot capabilities, and it allows users to engage in live conversation with a customer service representative for prospective customers on a website, platform, or mobile app.
When compared to other online brokers, Tastyworks’ selection of services is more limited than those provided by other companies. This is because the company was designed especially for options traders. In addition, it does not provide access to OTCBB stocks, often known as penny stocks, corporate bonds, or municipal bonds. On the other hand, Tastyworks is innovative in the sense that it allows users to trade cryptocurrency coins in addition to derivatives such as bitcoin futures. This demonstrates that the company is focused on the future.
Using Tastyworks, traders have the opportunity to trade in the following:
- Single and multi-leg option contracts
- Long and short stocks
- Futures/Commodities (including those listed on the Small Exchange)
- Futures options
- Bitcoin futures
- Treasury Bills (available by request)
Users of Tastyworks do not have to pay commissions for exchange-traded shares, much as customers of the vast majority of online brokerage firms that have entered the race to zero fees. On the other hand, it enjoys a distinct competitive advantage in terms of the pricing of options contracts. For example, the minimum fee to open a position in options is $1. However, the maximum fee for each leg is $10.
In addition, there is no fee charged when closing out options positions. The distinctive pricing mechanism that Tastyworks has developed is now the most cost-effective choice available on the market. Thus, it makes a valuable asset for derivatives traders.
- No commission is charged on stock and ETF trades, regardless of the number of shares traded.
- The base charge for opening an options contract is $1, with a maximum fee of $10 per leg. Importantly, there are no fees for closing options positions.
- A single leg order of 20 puts/calls costs $10 in commission.
- To open and close positions in future contracts, costs $2.50 each contract.
- Micro futures contracts cost $1.50 each contract to open and close.
- It pays 1% of the cryptocurrency purchased to open positions and 1% of the cryptocurrency sold to liquidate positions (with a $10 order ticket maximum).
- The margin interest rate on a $10,000 amount is 8%, while a $100,000 balance is 6.5%.
- Domestic wire fees are $25; international wire fees are $45
- A check costs $5 to send domestically and $10 to send internationally.
- The price for account transfers is $75.
- Fee for the voluntary reorganization of $50
- The charge for the exercise and assignment is $5.
- There are no fees for inactivity or account termination.
- There is no cost to use the platform.
- There are no fees for ACH deposits or withdrawals.
The Tastyworks order system has a lot of useful features. However, it still can be difficult to use, especially for those who are just starting. Only the desktop version of the software is accessible, even though it can execute conditional instructions. Moreover, when you close a position, you are not allowed to select a tax lot. This is because the default is “first-in, first-out.” This presents even another catch (FIFO). The following is a list of the different types of orders that Tastyworks provides:
- Stop limit
- Stop market
- Bracket orders
- Good til canceled
- Good til date
- Conditional orders (OCO, OTO)
First of all, you must log into the trading platform after logging into the website, which mostly provides basic account management features. We know that this results in some redundancy. Nonetheless, logging in is a basic and uncomplicated process. When you connect to the trading platform, you will see your real-time net liquidity at the top of the page, as well as a vertical menu on the left side. Moreover, you will discover tabs for your trading dashboard, portfolio, journal, trading history, watchlists, Tastytrade, and a unique follow feed in the vertical menu. Importantly, Tastytrade, a Tastyworks affiliate, is a live financial news network for active retail options traders that serves as a resource for both seasoned and inexperienced traders. One of the fascinating aspects of the following feed is the ability to observe and duplicate real-time deals from Tastytrade’s show hosts and traders.
Besides, opening a new Tastyworks account is simple and may be done on the website. After you open an account, you can customize the trading platform to meet your specific needs and preferences. For example, you can alter the positions of the various widgets, adjust the arrangement of columns, and even change chart parameters for further customization. Since there are no demo or paper trading capabilities, you must be familiar with options trading before using the Tastyworks platform.
Furthermore, as it supports the same types of orders, has the same asset classes, and streams data in real-time, using the mobile app is just as easy as using the desktop or web-based platform. However, the Tastyworks mobile app does not provide news or research. Moreover, it does not allow you to combine drawing tools with charting functionality. Overall, both the desktop and mobile interfaces are user-friendly and intuitive, making them ideal for frequent options traders.
Significantly, Tastyworks offers three distinct trading platforms: a web-based system, a desktop application, and a mobile app. Moreover, watchlists, position data, and trade page details are all adjustable across all three platforms. Additionally, since the Tastyworks platforms are designed for active options traders, many of its tools are geared toward assisting you in evaluating volatility and the chance of profit.
Besides, when trading options, you have two alternatives: the table or the curve. You can use either view to access predefined trading techniques such as the butterfly, straddle, iron condor, and others. In addition, you can also drag and drop different option orders to alter the default parameters in real-time, increasing the efficiency of your trading. You may also see the options you have chosen and all of the accompanying information such as the chance of profit, delta, theta, standard deviation, P/L, implied volatility, the predicted move, max profit/loss, expiration dates, prices, etc. Therefore, this makes analyzing your possible position as an options trader very simple.
Additionally, the user interfaces of the internet and desktop platform are fairly comparable, especially when it comes to the trading experience. Both systems allow you to trade from charts, stream real-time quotation information, and broadcast quotes on various platforms at the same time. The desktop edition is likely your best bet for active traders as it provides greater graphing and charting features.
Nevertheless, although Tastyworks increases tax efficiency through software, you cannot choose a tax lot before placing a sell order. Aside from that, tax management lacks adaptability for dealing with income, so traders hoping for more flexible techniques may be dissatisfied. Overall, the Tastyworks platform caters to a specific demographic of traders, which is reflected in its tools, features, and overall design.
Security and Reliability
- SMS-based two-factor authentication is available.
- Fingerprint and face recognition are available in mobile apps.
- Lloyd’s of London provides excess Securities Investor Protection Corporation (SIPC) coverage up to a total of $600 million, subject to maximum limits of $150 million for any one customer’s securities and $21.5 million for any one customer’s cash.
- There have been no big security breaches reported in the recent four years, according to the Identity Research Theft Center.
- Tastyworks encountered platform difficulties on November 9, 2020, when markets opened to massive increases in trade. Some exchanges had difficulty dealing with significant spikes in data demands, which impacted all online brokers.
The pricing structure and fees for Tastyworks are very easy to understand and transparent. The broker has a page on their website that discusses fees and commissions, and it is simple to locate, read, and comprehend. In addition to this, it emphasizes the costs connected with brokerage fees, along with those for margin trading and interest rates.
As was previously noted, Tastytrade is a content network as well as a cost-free education hub that operates in conjunction with Tastyworks. Moreover, Tastytrade provides you with practical information that is founded on research and real-world experience, which can assist you in expanding your understanding of the world of investing.
Importantly, before the pandemic, Tastytrade provided live in-person trading education events. These days, however, the majority of Tastytrade’s educational offerings take the form of digital events and webinars. Even though Tastyworks has not yet established the feature of paper trading, Tastytrade supports its platform with a large number of instructional resources such as blogs, videos, and an investment dictionary.
Pros & Cons
- Tastytrade affiliate has a large range of materials and instructive content.
- It offers a suitable commission.
- It provides advanced tools designed specifically for option traders.
- If you are new to trading options, the platform can be confusing.
- Account features and investment options are limited.
- Features such as market news, research, and screeners are missing.
- Each weekday, Tastytrade creates 8 hours of live, original content to give financial information, investing techniques, and entertainment relevant to options trading and the stock market. Moreover, it broadcasts all trades from shows to the platform’s “follow page,” where you can filter, sort, and select which underlying equities you want to see trades for. Overall, Tastytrade provides actionable information based on research and experience that can assist you in growing your portfolio as a DIY investor.
- When it comes to commissions on other goods, there is a significant difference between Tastyworks and other brokers. Unlike most brokers that charge commissions when you buy and sell, Tastyworks charges a flat cost on purchases and no commission on sales. Moreover, it costs $1 for each contract purchased, which equates to $0.50 per round-trip, as opposed to the industry standard of $0.65. However, if you trade futures, you must pay an opening and closing commission of $1.25 for ordinary futures contracts. Micro and tiny futures contracts are still offered at a cheaper cost.
- Since Tastyworks is designed with the options trader in mind, it includes almost all of the tools you will need for studying and trading derivatives. For example, you may examine the risk profiles of many open positions. Furthermore, it includes vital charting indicators and standard sketching tools, allowing you to make rapid educated judgments while trading options.
- The Tastyworks platform may be complicated and confusing to new traders and investors. Tastyworks has a higher learning curve than other platforms with more basic capabilities because it is geared toward frequent and experienced traders.
- Tastyworks was designed specifically for options traders, so its features are limited. For investors seeking exposure to fixed income or more conservative asset groups, this is a drawback.
- Tastyworks’ research tools are lacking, as it lacks screeners and does not provide market news, professional analysis, or trade recommendations. Furthermore, it does not offer paper trading, which can be an effective tool for learning and testing methods.
Is Tastyworks A Worth Broker to Get?
Genuinely, Tastyworks is aimed at more active traders who know what they want in a broker and are seeking a low-cost method to get involved:
- Low option commissions are ideal for individuals who participate in that market segment, especially if they can bring some volume. Even if they are making little trades, they receive undiscounted pricing that is comparable to some of the finest in the industry.
- Low total commissions on other instruments such as stocks, ETFs, bitcoin, and futures contracts may also attract and retain traders.
- However, investors looking for mutual funds and bonds will be disappointed because they are not available.
Tastyworks is created for the active trader who mostly trades derivatives such as options, futures, and futures options. Since derivatives account for 98% of its customers’ trades, there are many specialized tools for active options and futures traders. When combined with the content available on the Tastytrade network, it is an ideal platform for beginners to learn the knowledge and abilities necessary to identify risks and rewards in options trading techniques.
This is the advantage of Tastyworks’ niche strategy: they want to assist derivatives traders rather than ordinary investors. If you are a dedicated and experienced options trader, Tastyworks’ tools, unique content, and the price will most certainly appeal to you. Importantly, there are many additional options for investors looking for a more traditional portfolio or who are just getting started in the market.
Read more: Popular Brokers