Top Rated For:

• Best Broker for Options
• Best Options Trading Platform
  

Our Take

tastytrade is best suited for experienced stock, options, and futures traders, as well as those interested in sharpening their craft in these areas. tastytrade trading platform features are designed to meet all active traders' needs, including a strong set of tools for derivatives traders. Although tastytrade can be intimidating for beginners, the trading platform has great educational content and research tools for learning. However, the low pricing structure doesn't make up for the limited account amenities and lack of investment selections for the casual trader or passive investor. As a result, tastytrade is well-suited for its target market of active traders, but it likely won’t be a good fit for everyday investors.

Introduction

On February 22, 2023, tastyworks officially changed its name to tastytrade. tastytrade is an online brokerage platform specializing in options, futures, and stock trading. Launched in 2017, the relatively new online broker is one of the fastest-growing online financial networks in the world. tastytrade 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 tastytrade ranks against its more established rivals to help you decide whether it is the right fit for your needs.

Pros Explained

• Huge library of resources and educational content: tastylive, tastytrade's affiliated education network (which was once called tastytrade), currently produces 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.
• Fully customizable trading experience: There are multiple customizable features on the web, mobile, and desktop platforms, including watchlists, position details, and trade page details such as delta, theta, and volume.
• Advanced tools uniquely built for the options trader: Because tastytrade is engineered with the options trader in mind, most 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 the Order Chains tab allows you to track a trade from its inception including any rolls, closing legs, or adjustments.

 Cons Explained

• Platform can be overwhelming to newer options traders: New traders and investors may find the tastytrade platform confusing and overwhelming. Since it’s geared towards frequent and experienced traders, tastytrade has a steeper learning curve than other platforms that might have more basic functionality. 
• Limited fixed income choices: tastytrade was uniquely built for the options trader, and doesn't include many conservative asset classes like corporate bonds, municipal bonds, and foreign government bonds. The only fixed income assets are U.S. treasury bonds, bills, and notes. This is a disadvantage for traders who specialize in fixed income.
• No on-platform support for paper trading: tastytrade does not support paper trading, which can be helpful for learning and testing strategies. However, the platform allows new customers to open an account without the obligation of funding it. From there, new customers can get a feel for the platform to see if it is the right choice for them and their trading style before committing.

Usability

tastytrade's web trading platform offers built in account management functions and aligns more closely with the experience on the desktop platform. 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, and a unique follow feed. tastytrade has a live financial news network for active retail options traders, called tastylive, which is a great resource for 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 tastytrade 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 tastytrade 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, tastytrade’s mobile app lacks the capability to pair drawing tools with charting functionality. Overall, both desktop and mobile platforms are user-friendly, intuitive, and best suited for frequent options traders.

Trade Experience

tastytrade provides three separate trading platforms: a web-based system, a desktop program, and a mobile app. All three platforms have multiple customizable features, including watchlists, position details, and trade page details such as delta, theta, and volume. Because the tastytrades’ platforms cater to the active options trader, many of its tools are focused on helping you evaluate volatility and the probability of profit. 

Within trading options, you can choose between three views—the table, analysis mode, or the curve. Using either view, you can access predefined trading strategies such as butterfly, straddle, iron condor, and more. You can also drag-and-drop different option orders allowing you to seamlessly edit the default parameters, improving the efficiency of your trading. Additionally, directly under the options chain, you can see the options that you’ve selected and all of the associated statistics, including the probability of profit, delta, theta, standard deviation, P/L, implied volatility, the expected move, max profit/loss, expiration dates, prices, and more. This makes it very easy to analyze your potential position as an options trader. 

The website and desktop platform have similar user interfaces, 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. 

tastytrade offers limited options for tax optimization. By default tax lots are sold in the order of first in, first out (FIFO). You can switch your default to last in, first out (LIFO) by contacting customer service. If you wish to select specific lots to sell when closing a trade, you can contact customer service on the day the trade is closing. However, none of this can be done on your own from account settings on the platform. This makes it a slow and clunky process, although it beats having no choices at all.

Regarding order types, the web-based, desktop, and mobile apps, which have long supported stop-limit orders, now include both stop and conditional orders on spread trades. Conditional orders such as one-triggers-one-cancels-other (OTOCO) and one-cancels-the-other (OCO) orders are supported as well. It's also possible to enter multiple orders. However, 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 regular trading hours, tastytrade’s mobile app is the perfect solution since 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 tastytrade 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, still lack drawing tools on the charts. All in all, although the mobile workflow is intuitive, the app itself can appear confusing and clunky to a beginner. The web or desktop platform is preferred for investors interested in frequent trading due to the extra visual space and superior trade experience.

Range of Offerings

Because tastytrade is built primarily for options traders, its range of offerings is slightly limited compared to competing online brokers. For example, it doesn’t offer OTCBB (penny) stocks, corporate bonds, or municipal bonds. On the other hand, tastytrade is forward-thinking in that it supports trading cryptocurrency coins, as well as derivatives.

Investors can trade the following through tastytrade:

• Single and multi-leg option contracts
• Long and short stocks
• Futures/Commodities (including those listed on the Small Exchange)
• Futures options
• Bitcoin futures
• Cryptocurrency 
• Treasury Bills (available by request)
• ETFs
• Indices

Order Types

The tastytrade order system has great functionality but is a bit complicated, especially for a beginner. Conditional orders are supported by tastytrade as well. When closing a position, the default is first-in, first-out (FIFO). This can be changed only by contacting support. Here’s a list of order types that tastytrade enables:

• Limit
• Market 
• Stop limit
• Stop market
• Good til canceled 
• Good til date
• Bracket/conditional orders (OCO, OTOCO)

Trading Technology

tastytrade uses a proprietary smart order routing system focusing on order fill quality and price improvement. The electronic system will route orders to the market maker that will yield favorable execution for the customer. However, the firm does engage in payment for order flow.

Unlike some more popular online brokers, tastytrade clients cannot backtest strategies or automate a trading strategy directly on the platform. Instead, they can access an external site, , to perform this analysis.

Costs

Similar to most online brokerage firms that joined the race to zero fees, tastytrade 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 commission to open an options position is $1, and it is capped at $10 per leg. Moreover, there is no cost to close option positions. tastytrade's unique pricing model is a value add for derivatives traders since it is the most cost-efficient option in the market.

• Stock and ETF trades incur no commission, regardless of the amount of shares.
• Base commission to open an options contract are $1, capped at $10 per leg. No commissions to close options positions.
• For example, there would be a $10 commission for a single-leg order of 20 puts/calls.
• Future contracts cost $1.25 per contract to open and close positions. 
• Micro futures are $0.85 per contract to open and close positions.
• It costs 1% of cryptocurrency purchases to open positions and 1% of cryptocurrency sales to close positions (capped at $10 per order ticket).
• Margin interest on the $10,000 balance is 11%; $100,000 balance is 9.5%.
• There is a $25 fee for domestic wire withdrawals and a $45 fee for international wire withdrawals.
• Sending a check domestically costs $5 while sending a check internationally costs $10.
• The account transfer fee is $75.
• The reorganization fee is $50.
• The exercise and assignment fee is $5.
• Inactivity or account closure has no fee.
• There is no fee to access the platform.
• There are 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 tastytrade, have cut commissions on equity trades. tastytrade pricing structure is unique and more cost-efficient than its competitors. Since the methods in which brokers make money from you are less transparent, we’ve highlighted some ways they make money for you:

• Interest on cash balances: tastytrade doesn't share information on what it does with cash balances or if it pays any interest to the consumer. They may keep all interest earned for themselves, or pay a portion to the customer, and keep the rest. This is likely a source of revenue for the company as is common in the industry.
• Payment for order flow: tastytrade accepts payment for order flow on equity and options orders. This a common practice in the industry, but one that often comes under fire for potential conflicts of interest. tastytrade is committed to achieving the best execution for customers. SEC 606 reports are available online if you'd like to see a highly detailed breakdown of their payment for order flow activities.
• Margin: While there is no minimum to open a margin account, you must have at least $2,000 in your account to gain margin privileges, and begin trading on margin. This is considerably less than many other brokers. Like other brokers, tastytrade charges interest on margin borrowing which is a source of income for the company. Its rates are between 8% and 11% depending on your balance as of Oct. 31, 2023.
• Price improvement: tastytrade's smart order router attempts to achieve the best execution results for customers, saving them money with price improvement.

Account and Research Amenities

The tastytrade platform was built in-house using proprietary technology. It offers limited portfolio analysis tools and no third-party research resources. Since tastytrade 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 tastytrade platform. By default, tastytrade 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 can screen for volatility and other key metrics, the focus is primarily on technical analysis and pricing trends as opposed to the traditional buy-and-hold metrics that other platforms may use.

Mutual Fund Screener

tastytrade doesn’t provide a mutual fund screener as they don't offer the asset class.

Options Screener

Analyzing option trades is a tastytrade 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

tastytrade does not provide a fixed-income screener as they offer only very limited access to this asset class.

Charting

tastytrade has a complex and interactive charting tool on its web and desktop platforms. Some of the more notable enhancements recently include a more comprehensive set of risk analysis tools, as well as the ability to create separate chart configurations outside of the main dashboard.  

Even though there is limited fundamental data for stocks, there are plenty of useful indicators for options, like the Greeks, and implied volatility (IV), which is tastytrade’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

tastytrade’s tools and calculators are option focused and seek to measure volatility and calculate the probability of profit of a particular options trading strategy.

Trading Idea Generator

tastytrade provides 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. The trades are posted live, in real-time, so you’ll have the ability to mimic trades from your favorite hosts. The follow trade feature has tv celebrities and other personalities to choose from.

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.

Third-party research

tastytrade does not provide third-party research.

Fractional Dividend Reinvestment Program (DRIP)

tastytrade customers can specify dividend reinvestment for dividend-paying stocks, and the dividend will purchase fractional shares rather than paying cash into the account.

Cash Management

tastytrade offers both cash and margin accounts that traders can choose from. There isn't a minimum deposit that traders have to abide by. However, traders seeking to trade with margin benefits must have $ 2,000 in their account. Traders can also open retirement and corporate accounts of an established business in the United States.

SRI/ESG Research Amenities

tastytrade doesn't provide socially responsible investing (SRI) or environmental, social, and governance (ESG) research amenities.

Portfolio Analysis

While real-time portfolio statistics, such as the 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 on . Portfolio analysis is customizable, and you can consolidate holdings from outside accounts for reporting and analysis purposes. 

tastytrade reports account balances, margins, and buying power in real-time. However, you won’t be able to measure the tax implications of future trades. Since tastytrade is a newer player in the brokerage industry, you can expect it to continue improving its platform.

Education

tastylive, tastytrade's content network and free learning center, offers live in-person trading education events and runs in tandem with tastytrade. tastytrade gives you actionable information rooted in research and real-world experience that can help you grow your knowledge around investing. There is a lot of free, stats-based options content that traders can greatly benefit from. Although tastytrade 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.

Customer Service

The tastytrade phone support line is open Monday through Friday from 7 a.m.–5 p.m. You can talk to a live broker during this period. There is also a chatbot that can lead you to solutions.

Security and Reliability

• Two-factor authentication is available via SMS and apps.
• The mobile apps have fingerprint and face recognition.
• Excess Securities Investor Protection Corporation (SIPC) coverage is provided 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.
• No major security breaches were reported.
• tastytrade has not experienced any outages in the last year.

Transparency

tastytrade 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, margin trading, and interest rates.

Available Account Types

tastytrade has all the commonly used account types, including:

• Individual and joint taxable
• Traditional individual retirement account (IRA)
• Roth IRA
• Simplified employee pension (SEP) IRA
• Inherited IRA (Roth and traditional)
• Corporate
• Trust
• International (non-U.S.)

Final Verdict

tastytrade is designed for the active trader who is primarily interested in trading derivatives like options, futures, and futures options. Paired with the content you can access on the tastylive network, tastytrade 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 tastytrade’s niche strategy—it is looking to serve derivatives traders rather than investors in general. If you are a serious and experienced options trader, you’ll likely find tastytrade’s tools, unique content, and pricing quite attractive. There are, of course, many other choices for investors looking for a more traditional portfolio or just starting to invest in the market.