Tastyworks is an online brokerage platform built specifically for options traders. The up and coming online broker is a subsidiary of tastytrade, one of the fastest growing online financial networks in the world. Tastyworks was designed by the founders of thinkorswim with sophisticated functionality for complicated options trades and strategies in mind. It has a do-it-yourself approach and provides the technology, education and support to succeed more easily on your own. We’ll take a look at how tastyworks ranks against its more established rivals to help you decide whether it is the right fit for your needs.
- The tastyworks platform is strongly focused on trading derivatives.
- The trading platform contains a sophisticated set of tools for active day traders, paired with a smart design that is easy to maneuver.
- Tastyworks has low trading costs compared to large competitors.
- The limited range of offerings and investment selections on the platform reflect its niche approach.
Who Tastyworks Is For
Tastyworks is best suited for experienced stock, options, and futures traders, as well as those interested in sharpening their craft in these areas. Tastyworks trading platform features are designed to meet all active traders needs, including a strong set of tools for derivatives traders. Although tastyworks can be intimidating for beginners, the trading platform has great educational content and research tools for learning. However, the low fees don’t make up for the limited account amenities and lack of investment selections for the casual trader or passive investor. As a result, tastyworks is well-suited for its target market of active traders, but it likely won’t be a good fit for everyday investors.
A huge library of resources and educational content
A fully customizable trading experience with capabilities of streaming quotes in real-time on multiple platforms
Advanced tools uniquely built for the options trader
The platform can be overwhelming if you’re new to trading options
Limited account amenities and investment selections
Lacks features like market news, research and screeners
- Tastytrade currently produces eight hours of live, original programming each weekday to provide financial information, investment strategies, and entertainment related to options trading and the stock market. It posts all the trades from shows to the "follow page" on the platform, where you can filter, sort, and select underlying stocks you’d like to view trades for. All in all, tastytrade gives you actionable information rooted in research and experience that can help you grow your portfolio as a DIY investor.
- There are multiple customizable features on the web, mobile, and desktop platforms, including watchlists, position details, trade page details such as delta, theta, and volume, as well as fully customizable and downloadable charts.
- Because tastyworks is engineered with the options trader in mind, mostly all of the tools you'll need for analyzing and trading derivatives are built into the platform. For instance, you can assess the risk profiles of multiple open positions, and it has important charting indicators and common drawing tools, which allows you to make quick informed decisions when trading options.
- New traders and investors may find the tastyworks platform confusing and overwhelming. Since it’s geared towards frequent and experienced traders, tastyworks has a steeper learning curve than other platforms that might have more basic functionality.
- Tastyworks was uniquely built for the options trader, therefore, its range of offerings are limited. Mutual funds are only available by request, while bonds and CDs are not available at all. This is a disadvantage for investors who are seeking exposure to fixed income or more concervative asset classes.
- Tastyworks’ research amenities are subpar as it does not have screeners, nor does it provide market news, professional research, or trading ideas. Additionally, tastyworks does not support paper trading, which can be a useful tool for learning and testing strategies.
After logging into the website, which mainly has basic account management functions, you’ll also have to log into the trading platform. This creates a little redundancy. Nonetheless, logging on is relatively simple and straightforward. Once you log into the trading platform, you’ll see your real-time net liquidity at the very top of the page, along with a vertical menu on the left side of the page. In the vertical menu you’ll find tabs for your trading dashboard, portfolio, journal, trading history, watchlists, tastytrade, and a unique follow feed. Tastyworks’ affiliate, tastytrade, is a live financial news network for active retail options traders and is a resource for both experienced and new traders. One of the cool features of the follow feed is that it allows you to view and copy real-time trades from tastytrade's show hosts and traders.
Opening a new tastyworks account is seamless and is easiest using the website. Once your account is opened, you can personalize the trading platform according to your needs and preferences. For instance, you can rearrange the locations of the various widgets, change the layout of columns, and even modify chart settings for additional customization. Since there is no demo or paper trading functionality, you’ll need to have some knowledge of options trading before utilizing the tastyworks platform.
Using the mobile app is just as seamless as the desktop or web-based platform as it supports the same type of orders, has the same asset classes, and streams data in real time. However, tastyworks’ mobile app does not offer news or research, and lacks the capability to pair drawing tools with the charting functionality. Overall, both desktop and mobile platforms are user-friendly, intuitive, and best suited for frequent options traders.
Tastyworks provides three separate trading platforms: a web-based system, a desktop program, and a mobile app. There are multiple customizable features on all three platforms, including watchlists, position details, trade page details such as delta, theta, and volume, as well as fully customizable and downloadable charts. Because the tastyworks’ platforms caters to the active options trader, many of its tools are focused on helping you evaluate volatility and the probability of profit.
When trading options, you can choose between two views–the table or the curve. Using either view, you have access to predefined trading strategies such as butterfly, straddle, iron condor, and more. You can also drag and drop different option orders seamlessly edit the default parameters, improving the efficiency of your trading. Additionally, directly under the option chain, you can see the options that you’ve selected and all of its associated statistics, including probability of profit, delta, theta, standard deviation, P/L, implied volatility, the expected move, max profit/loss, expiration dates, prices, etc. This makes it very easy to analyze your potential position as an options trader.
The website and desktop platform have a very similar user interface, particularly around the trading experience. Both platforms support trading from charts, have real-time quote information streaming, and allow you to stream quotes on multiple platforms simultaneously. For active traders, the desktop version is likely your best bet as it does a better job of providing graphing and charting tools.
Although tastyworks optimizes tax efficiency through software, it does not allow you to select a tax lot prior to making a sell order. This is good for traders who by default will select to sell shares based on a first-in, first-out (FIFO) method. Beyond that, however, the tax management lacks customization for dealing with income, so traders looking for more flexible strategies may be disappointed. Overall, the tastyworks platform has a niche demographic of traders, and it reflects that in it’s tools, features and overall layout.
In regards to order types, the web-based, desktop, and mobile app all support stop-limit orders. However, only the desktop program enables conditional orders such as one-triggers-the-other (OTO), one-cancels-the-other (OCO), one-triggers-two (OTT). Moreover, the desktop is the only platform that allows you to enter multiple orders simultaneously, while none of the platforms enable trailing stops or the ability to stage orders for later entry.
Mobile Trade Experience
If you’re away from your computer during normal trading hours, tastyworks’ mobile app is the perfect solution as it is fundamentally the same as the web-based and desktop platforms and offers similar functionality. The mobile app is available on IOS as well as Android and has a modern design. Although tastyworks makes entering orders on the mobile app relatively simple by optimizing a drag and drop feature, graphing and charting are not optimized for the mobile experience. Graphs, for example, are displayed in a very small window. On mobile, a graph cannot be rotated horizontally, further restricting their use. Another major drawback is that you cannot set price alerts and order notifications on the tastyworks mobile platform.
All in all, although the mobile workflow is intuitive, the app itself can appear confusing and clunky to a beginner. For investors interested in frequent trading, the web or desktop platform is preferred due to the extra visual space and superior trade experience.
Range of Offerings
Because tastyworks is built primarily for options traders, its range of offerings are limited compared to competitor online brokers. Although tastyworks has plenty of mutual funds that can be traded with no transaction fee, several of them are only available by request. Moreover, it doesn’t offer OTCBB (penny) stocks, corporate bonds, or municipal bonds. Treasury bonds, international bonds, and CDs are only available by request. On the other hand, tastyworks is forward thinking in that it supports trading cryptocurrency coins, as well as derivatives such as bitcoin futures. Additionally, it offers fractional trading with a $25 minimum transaction limit.
Investors can trade the following through tastyworks:
- Single and multi-leg option contracts
- Long and short stocks (92% of all stocks are on the “easy to borrow” list for short sales)
- Fractional shares
- Mutual funds (10,000 No Transaction Fee; 7,000 available by request)
- Futures/Commodities (including those listed on the Small Exchange)
- Futures options
- Bitcoin futures
- Foreign exchange
- Treasury bonds (available by request)
- International bonds (available by request)
- CDs (available by request)
Tastyworks order system has great functionality, but it is a bit complicated, especially for a beginner. Although it has capabilities to place conditional orders, it is only available on the desktop. Another caveat is that you cannot choose a tax lot when closing a position, as the default is first-in, first-out (FIFO).
Here’s a list of order types that tastyworks enables:
- Stop limit
- Stop market
- Bracket orders
- Good til cancelled
- Good til date
- Conditional orders (OCO, OTO, OTT, and so on)
Tastyworks uses a proprietary smart order routing system with a focus on order fill quality and price improvement. Its internal systems randomly sends orders to each execution partner that has been vetted and approved by the firm. To achieve better prices, tastyworks closely monitors trade quality statistics and adjusts the percentage of orders routed to each execution partner accordingly. Net price improvement is $0.01 per share and $3.85 per option contract. As a tastyworks client, you can also route your own orders.
Unlike some of the more popular online brokers, tastyworks clients cannot backtest strategies or automate a trading strategy directly on the platform. The company has stated that APIs to support this functionality will be soon available.
Similar to most online brokerage firms that joined the race to zero fees, tastyworks customers pay no commissions for exchange-traded equities. However, it has a unique competitive advantage in how options contracts are priced. For instance, the base fee to open an options position is $1, and it is capped at $10 per leg. Moreover, there is no cost to close option positions. Tastyworks’ unique pricing model is a value add for derivatives traders as it is the most cost efficient option in the market.
- Stock and ETF trades incur no commission, regardless of the amount of shares.
- Base fees to open an options contract is $1, capped at $10 per leg. No fees to close options positions.
- $10 commission for a single leg order of 50 contracts
- Future contracts cost $2.50 per contract to open and close positions.
- Micro futures are $1.70 per contract to open and close positions.
- It costs 1% of cryptocurrency purchase to open positions and 1% of cryptocurrency sale to close positions (capped at $10 per order ticket)
- Margin interest on $10,000 balance is 8%; $100,000 balance is 6.5%.
- $25 domestic wire fee; $45 international wire fee
- Sending a check domestically costs $5, while sending a check internationally costs $10.
- Account transfer fee is $75.
- $25 voluntary reorganization fee
- Exercise and assignment fee is $5
- No fee for inactivity or account closure
- No fee to access the platform
- No fees for ACH deposits and withdrawals
How This Broker Makes Money From You and for You
Due to fee compression in the brokerage industry, most online brokers, including tastyworks, have cut commissions on equity trades. tastyworks pricing structure is unique and more cost efficient than its competitors. Since the methods in which brokers make money from you is less transparent, we’ve highlighted some ways they make money for you:
- Interest on cash balances: You do not earn interest on cash held in your account. Cash isn’t automatically swept into a money market fund, but you can put idle cash in a money market fund and transfer it out when you want to place a trade. Like other brokers, tastyworks makes money from the difference between what you are paid on your idle cash and what they can earn on customer cash balances.
- Stock loan program: Beginning Q1 2021, you can loan shares held long to tastyworks’ loan program. tastyworks can then earn revenue loaning stocks in your account for short sales by other traders. Tastyworks allows you to choose the stocks that can be loaned, but it does not share revenue generated from the activity with you.
- Payment for order flow: Tastyworks accepts payment for order flow on equity and options orders. On average, it accepts $0.0015 per share for equities, and $0.50 per option contract. This compensation is below average for equities and around the industry average on options.
- Portfolio margining: To initially apply for portfolio margining, you must have a margin account with tastyworks’ highest trading level, The Works, and have $175,000 in account equity to allow for a cushion from the maintenance minimum of $150,000 after enabling portfolio margining. The goal of portfolio margining is to set margin requirements that reflect net risk, which may allow clients to benefit from lower margin requirements and more effective use of capital. In general, it is ideal for investors who trade derivatives that offset the risk inherent in their equity positions.
- Price improvement: tastyworks' smart order router generates an estimated net price improvement of $0.01 per share and $3.85 per contract on options orders.
Account and Research Amenities
The tastyworks platform was built in-house using proprietary technology. It offers limited portfolio analysis tools and no third-party research resources. Since tastyworks is built primarily for frequent trading of derivatives, most of its research amenities are designed to help you find and place trades for options, futures, or futures options. Although the platform doesn’t have a bond or mutual fund screening tool, the everyday options trader will be more than satisfied with the resources made available.
Stock and ETF Screener
You can set up a watchlist of stocks and ETFs, but keep in mind that equity analysis is not a focal point for the tastyworks platform. By default, tastyworks has quite a few different preset watchlists to choose from, and they all serve a different purpose. Moreover, the ordering and filtering functionality is what makes the watchlists valuable. For example, you could filter for the biggest move, bid/ask prices, liquidity, volume, IV rank, and more. Even though you’re able to screen for volatility and other key metrics, the focus is primarily on technical analysis and using pricing trends as opposed to the traditional buy and hold metrics that other platforms may use.
Mutual Fund Screener
Tastyworks doesn’t provide a mutual fund screener.
Analyzing option trades is tastyworks distinguishing feature when compared to the larger market. The platform is optimized for complex, multi-leg options trades such as iron condors and vertical spreads. Most of your screening will be performed using watchlists that are customizable to your trading needs.
Fixed Income Screeners
Tastyworks does not provide a fixed-income screener.
tastyworks has a complex and interactive charting tool on both its web and desktop platforms.
Even though there is limited fundamental data for stocks, there are plenty of useful indicators for options, like the greeks, implied volatility, which is tastyworks’s proprietary IV rank, or the correlation matrix with stocks and indices. In addition, it is packed with options-focused charting that helps you understand the probability of making a profit. For instance, if you have multiple positions on a particular stock, you can view your combined risk profile on the underlying asset.This is a tremendously valuable tool for those serious about options trading.
Tools and Calculators
Tastyworks’ tools and calculators are option focused and seek to measure volatility as well as calculate the probability of profit of a particular options trading strategy.
Trading Idea Generator
Tastytrade provides eight hours of free content focused on research and active trading. All of the trades from the show personalities are posted to the "follow page" on the platform where you can filter, sort, and select underlyings for which to see trades for. The trades are posted live in real time so you’ll have the ability to mimic trades from your favorite hosts. The Cherry Picks and Cherry Bomb emails will also provide you with insight and context around certain products and markets and help uncover potential trade opportunities.
Tastyworks enables news streaming in the quote menu. The broker offers news through Tiingo, a financial research platform, as well as daily and weekly market reports using their Cherry Picks and Cherry Bomb email newsletter.
Tastyworks does not provide third-party research.
Dividend Reinvestment Program
Tastyworks customers can specify dividend reinvestment for dividend-paying stocks.
Tastyworks doesn’t provide a cash sweep program and there is no interest paid on idle cash balances. You have to manually move money in and out of a money market fund.
SRI/ESG Research Amenities
Tastyworks doesn't provide socially responsible investing (SRI) or environmental, social, and governance (ESG) research amenities.
While real-time portfolio statistics, such as probability of profit, delta, theta, liquidity, and buying power are displayed on the desktop application, in-depth performance reports and analysis are available to you by creating a free account at Quiet Foundation, a registered investment advisor (RIA) under the tastyworks/tastytrade umbrella. Portfolio analysis is customizable and you can consolidate holdings from outside accounts for reporting and analysis purposes.
The portfolio reporting tool is useful, as it provides data on both realized and unrealized gains and losses, as well as unrealized short and long term capital gains. Tastyworks reports account balances, margin and buying power in real time. However, you won’t be able to measure the tax implications of future trades. Since tastyworks is a newer player in the brokerage industry, you can expect it to continue making improvements to their platform. For example, you can now perform internal rate of return and time weighted rate of return calculations, a functionality that wasn't previously available. Customers can also maintain a trade journal as well as attach notes, graphs, and other market data to trades.
As mentioned, tastytrade is a content network and free learning center that runs in tandem with tastyworks. It currently produces eight hours of live, original programming each weekday to provide financial information, investment strategies, and entertainment related to options trading and the stock market. Tastytrade gives you actionable information rooted in research and real world experience that can help you grow your knowledge around investing.
Prior to the pandemic, tastytrade offered live in person trading education events, most which have transitioned to digital events and webinars. Although tastyworks hasn’t yet developed paper trading functionality, tastytrade supplements its platform with tons of educational resources like blogs, videos, and an investing glossary. Cherry Picks, its weekly research report, and Cherry Bomb, its daily email, serve as additional resources for market news and investing education.
- The tastyworks phone support line is open Monday through Friday from 7 a.m.–5 p.m. Central time and there is no hold time.
- You can talk to a live broker
- It has chatbot capabilities and you can live chat with a customer support representative for prospective clients on your website, platform or mobile app.
Security and Reliability
- Two-factor authentication is available via SMS.
- The mobile apps have fingerprint and face recognition
- Excess Securities Investor Protection Corporation (SIPC) coverage is provided by Lloyd's of London up to an aggregate of $150 million, subject to maximum limits of $37.5 million for any one customer's securities and $900,000 for any one customer's cash.
- According to the Identity Research Theft Center, there have been no major security breaches reported in the last 4 years.
- Tastyworks experienced platform outages when markets opened to huge surges in trading the morning of November 9 2020. Some exchanges had issues dealing with massive increases of data requests, which affected online brokers as a whole.
Tastyworks pricing structure and fees are very clear and transparent. The broker has a webpage dedicated to fees and commission that is easy to find, read, and understand. It also highlights costs associated with brokerage fees as well as for margin trading and interest rates.
Tastyworks is designed for the active trader who is primarily interested in trading derivatives like options, futures, and futures options. Since 98% of the trades placed by its customers are derivatives, there are a lot of unique tools for active options and futures traders. Paired with the content you can access on the tastytrade network, tastyworks is an excellent platform for beginners to develop the knowledge and skills to analyze risks and rewards as they pertain to options trading strategies.
This is the benefit of tastyworks’ niche strategy–they are looking to serve derivatives traders rather than investors in general. If you are a serious and experienced options trader, you’ll likely find tastyworks’ tools, unique content, and pricing quite attractive. There are, of course, many other choices for the investors looking for a more traditional portfolio or just starting to invest in the market.
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