Tastyworks is the trading platform developed by Tastytrade, a live content network that helps traders learn how to trade options. A tech-focused platform, Tastyworks is clearly geared toward active options traders, although it does have stock trading functionality as well. In this Tastyworks review, we'll explore the features, pros, and cons to help you decide if it might be the right stock broker for you.
$0 for stocks and ETFs, $1 per option contract (charged on opening trades only)
This broker is a good fit for: Tastyworks is best suited for active traders, especially those who trade options or futures contracts. Both its trading technology and options pricing schedule are among the best in the business.
For options traders, it's difficult to find a better pricing structure than Tastyworks. The brokerage only charges options commissions when opening a position. Plus, commissions are capped at a certain per-trade maximum. While there are platforms with commission-free options trading, they don't have nearly as much functionality for serious traders.
Tastyworks' trading platform was developed and designed by the team that pioneered retail options trading years ago. It's tough to find a better place to actively trade options. While it isn't necessarily one of the best brokers for beginners, Tastyworks offers some of the best technology for experienced traders.
From the trading platform to the content offered on the site, Tastyworks is all about options. There is no other major brokerage that's nearly as options focused as Tastyworks.
Tastyworks offers individual and joint brokerage accounts, as well as traditional, Roth, and SEP IRAs, corporate accounts, and trusts. The company says that UGMA/UTMA and Coverdell ESA accounts are coming soon.
If you're wondering about Tastyworks' minimum balance requirement -- there is none. That's right, Tstyworks has no minimum initial deposit when opening a brokerage account. You can make a stock or options trade as long as there's enough in your account to cover a single share or contract. However, it's worth noting that you'll need at least $2,000 to qualify for margin privileges.
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To be fair, long-term, buy-and-hold investors aren't the customers Tastyworks is targeting. But the availability of mutual funds could open up the platform to a wider group of investors.
While Tastyworks' account types will be fine for most investors, it doesn't offer SIMPLE IRAs or Solo 401(k)s.
Tastyworks is in the middle of the pack when it comes to margin interest rates. Other platforms geared toward active traders have far more competitive margin rate structures.
If you want a more diversified trading platform: Interactive Brokers also targets active traders and could also be worth considering -- especially if you want to use a combination of active and long-term investing strategies. In addition to stocks and options, Interactive Brokers allows investors to buy and sell mutual funds, more than 8,000 of which have no transaction fees.
If you need want to invest on just mobile: Robinhood is another good option for active investors. Where it shines is that it doesn't charge options fees at all, plus offers $0 commissions for stocks and ETFs. You won't get the diversity to invest in futures, but Robinhood does offer cryptocurrency investing.
Tastyworks' pricing is one of its more unique features, especially when it comes to options trading. First off, like most brokers, Tastyworks offers $0 commissions on stock and ETF trades.
When it comes to options, however, that's where it gets interesting. At first glance, Tastyworks' standard $1.00 per contract options commission might actually sound a little bit on the high end. After all, many rivals have per-contract prices in the $0.50-$0.75 range. However, there are two big differentiators:
The takeaway is that Tastyworks' pricing is especially advantageous for options traders who frequently deal in large quantities of contracts.
It's also worth mentioning that Tastyworks' platform is only set up for stock, options, and futures trading. (Note that futures have their own commission schedule, which is lower than most rivals.) So, there is no pricing for mutual fund trades.
|Stocks and ETFs||Options||Mutual Funds|
|$0||$1.00 per contract (opening trades only)||Not available|
If you're a mutual fund investor, Tastyworks isn't the broker for you. The company is strictly focused on stocks, options, and futures, at least for the time being.
In addition to the trading commission structure discussed earlier, there are some other Tastyworks fees users might face. While there's an extensive fee schedule listed on the broker's website, here are some of the most common:
Tastyworks was founded and is currently managed by an executive team that formerly held leadership roles at thinkorswim, which is now TD Ameritrade's active trading platform. CEO Scott Sheridan co-founded thinkorswim. The rest of the Tastyworks/Tastytrade team all held executive roles when thinkorswim was still independent.
So, it should come as no surprise that the focus of Tastyworks is its high-tech trading platform. The platform offers some very high-tech options trading tools. These aim to make complex options trading as user friendly as possible. Tastyworks offers a desktop trading platform (the most powerful and full-featured choice), as well as trading in a web browser and the company's mobile app.
We're generally not fans of margin trading, but many investors are. And this is especially true for active traders, which is Tastyworks' core customer base. If you use margin (borrowed money), it's important to be aware that doing so isn't free -- brokers charge interest, just like you'd expect on any other type of loan. So, a broker with relatively low margin rates can be attractive.
Tastyworks' margin rates are in the middle of the pack -- they aren't particularly cheap or expensive. Like most of its competitors, the rate you pay depends on how much you've borrowed:
|Margin Balance||Interest Rate|
|$1 million or more||5.00%|
Tastyworks is primarily designed as a trading platform (as opposed to a long-term, buy-and-hold investment platform). Therefore, you won't find much of the traditional stock research that many other brokers offer.
However, since Tastyworks is the brokerage arm of the Tastytrade options trading content platform, it does have some of Tastytrade's features, such as in-platform video content. There are also ways to watch professional options traders in real time. Investors can even copy their investment strategies with a click of a button.
Tastyworks was developed by some of the most experienced retail options trading pros, and the product reflects this fact. This is a good brokerage for active traders, especially those who want the best tools and pricing structure to trade options and/or futures. But long-term investors who want to buy and hold stocks, ETFs, and mutual funds -- and beginning investors -- should probably look elsewhere.
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