tastytrade Review 2024
Top Rated For:
Our Take
Tastytrade is best suited for experienced and active option traders. These users generally love the tastytrade platform, while users new to option trading may find its many features bewildering at first. Tastytrade has built its stellar reputation on helping active traders magnify their own efforts through the platform’s high-powered functionality. The platform was thoughtfully constructed to help even novice traders learn their way around. The broker’s fee structure rewards active traders of stocks, options, and futures, making it an attractive choice for frequent traders. Certainly the buy-and-hold investor crowd will think that using a tastytrade brokerage account is like using a sledgehammer on a pushpin. However, even these users would admit to being surprised at the valuable analytical tools available on the platform. That’s a big part of what makes tastytrade a legitimate choice as a brokerage for any user, but especially for active traders.
Introduction
The broker formerly known as tastyworks officially changed its name to tastytrade in 2023, but that change only reaffirmed the company’s commitment to customer satisfaction. Launched in 2017, tastytrade is one of the fastest-growing online brokerage firms in the world. It was designed by the founders of thinkorswim with sophisticated functionality for robust trading in options and futures. Though it has a do-it-yourself vibe and provides the technology, education, and support a retail trader needs to succeed, it brings industrial-level tools and execution to a retail crowd. It is a valid question to ask whether this platform gives you what you want in a brokerage because not everyone will feel that it does. This review will 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 & Cons
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Well-designed user interface
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Low fee structure that favors active traders
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In-depth analysis and research tools
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Abundant, free education
Pros Explained
- Well-designed user interface: Without qualification it is true to say tastytrade’s user interface is complex. But once learned is perhaps the most powerful tool available in the market for retail traders who want to trade like professional option traders do.
- Low fee structure that favors active traders: Stock and ETF trades have zero commissions, while option trades are $1 per contract. However, the commission is capped at $10 per trade, making larger trades most economical.
- In-depth analysis and research tools: Option trading is based on complex mathematics and formulae, however, tastytrade makes it possible for traders to quickly compare positions and probabilities with tools that analyze and calculate the risks in each trading strategy.
- Abundant, free education: The tastytrade staff and user community is very active and creates an abundance of training material available in an unending supply of new tastytrade content on Youtube. That means learning the platform isn’t nearly as big a barrier as you might imagine.
Cons Explained
- Feature overload: With a great culture of high quality and rapid improvement comes a proliferation of tools and features for any imaginable use. The sheer number of features available for traders on tastytrade gives even experienced users a sense that they are missing out on something–only they couldn’t tell you what they are missing out on because they don’t know the platform well enough.
- Fee structure favors active traders: Like most retail brokers, tastytrade doesn’t charge commissions on stock trades and the $10-per-trade cap on option commissions is a novel concept that traders like. However, both of these together create an environment that encourages traders to take advantage of economies of scale in trading–a scale achieved through increased trading frequency.
- Requires a bit of a learning curve: The downside of a high-powered software platform is its cost of adoption–the time it takes to learn and become proficient at using it. Tastytrade staff and development teams work hard to minimize this cost, but for now, the cost is not zero.
Usability
When it comes to usability the tastytrade platform stands out. The brokerage frequently wins awards and acclaim, much of it related to the well-designed user experience. The guiding principle behind the design can be summed up in six words: see it, click it, trade it.
The team behind the user experience relies heavily on user feedback to tweak the operation of features so that the platform helps traders do the kind of analysis they like. For example, users can create watch lists and sort them by their implied volatility (IV) score–something you care a lot about if you are an active options trader.
This kind of hyper-focused design makes the platform seem obvious to the target user it is designed for, but rather oblique to those simply looking to run screeners for selecting mutual funds.
Trade Experience
It helps to remember that company founders Tom Sosnoff and Scott Sheridan were 20-year veterans of the options pits at the Cboe (Chicago Board Options Exchange). They built the tastytrade platform to be the tool they wished they had back in their floor-trader days, but with access to modern markets such as cryptocurrencies and small-exchange futures contracts, and the ability to extend to whatever markets become popular.
Admittedly there is a lot to look at on the platform. However, when it comes to execution, the platform is designed to help you complete an order with a minimum of clicks and scrolling. But it goes beyond that. The team at tastytrade listens closely to user feedback as they work to home in on the optimal implementation of the user interface. So not only can you search out options on ETFs with high trading volume and open interest, but you can also execute a market-order trade in as little as two well-placed clicks.
Traders can choose between three viewing modes in the interface—table mode (a typical options chain view), analysis mode (which focuses on comparing prices and relative values), or curve mode (to help visualize the profit and loss potential of your trading strategy).
Using either view, you can access predefined trading strategies such as butterfly, straddle, iron condor, and more. As part of using these modes, traders can see the options they have 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 for a sophisticated analysis of the option positions with the intent to improve the probability of trading profitability.
Mobile Trade Experience
Tastytrade provides four separate trading mediums: a website portal, a desktop program, a mobile app for iOS and Android, and an app specifically for use on the iPad/iOS. The first two are similar but the mobile apps differ in presentation based on available screen sizes. There is very little that can be done on the desktop or web-based versions of the tastytrade platform that can’t be done through the mobile platform. All order types and analysis are available with only the exception of some of the charting functions.
The mobile platform is smartly designed, but not meant to be a simple single-thumb interaction experience. The interface on mobile devices is designed to optimize available screen space. For example, the appearance of advanced order entry screens provides all the same options in its display, but has them rearranged to accommodate the more compact screen (see graphics).
Range of Offerings
Tastytrade offers users the ability to trade in stocks and ETFs, futures (both indexes and commodities), and of course every available option contract on all of the types of underlying assets they trade with. You can trade options on stocks, as well as options on futures and indexes. You can even trade options on option-oriented indexes such as the Cboe Volatility Index (VIX).
In 2024 tastytrade also made Treasury bond trading and investing possible, though you have to call the trading desk to implement orders. There is a $25 fee to open a Treasury bond position (regardless of size), and a $25 fee to close it. There is no fee for holding it to maturity. Once a Treasury bond position is open, it will display among the trader’s open positions on the platform.
Investopedia’s latest Sentiment Survey revealed that investor optimism about equity returns over the next six months has reached a 12-month high, with 33% of respondents expecting higher returns during that period. 46% said they have more risk in their portfolios than last year, while 10% noted cryptocurrencies like Bitcoin are becoming a larger part of their selection.
Order Types
Traders looking for a wide selection of order types to help manage their options positions will not be disappointed in tastytrade’s offering.
Some of the more popular order types available on the tastytrade platform are as follows:
| Order Type | Description |
|---|---|
| Market | Takes the next available price |
| Limit | Specifies the least desirable price at which you want to enter the trade–any better price is acceptable. |
| Stop | Specifies the most desirable price at which you want to enter the trade–where any price worse is also acceptable. |
| Stop Limit | Specifies the most desirable price at which you want to enter the trade–where any price worse is not acceptable. |
| TIF orders (time in force) |
DAY (today only) GTC or Good ‘til Canceled (indefinitely) GTD (Good ‘til Date) will expire on the end of the date specified. |
| OCO | One Cancels Other orders are bracket orders that can be used for entering or exiting a trade. Typically the trader has two goals (i.e. go long vs. go short, or take profit vs. stop a loss). This order allows the trader to specify both options, fill the one that hits first, then cancel the remaining order. |
| OTOCO | One Triggers One Cancels Other are a combination of an entry order and a bracket order. The typical scenario is to enter a position, and once the position is entered, to execute a bracket order to either take profit or stop a loss, depending on which order is executed first. |
| Closing | Closing orders can be specified as automatic profit-taking orders if a certain percentage of potential profit is reached, or as rolling trades to automatically change the strikes or expiration dates or both. |
| Quick Action Closing | Balanced, Default, and Full closing orders are types of closing orders meant for groups of several option contracts. Balanced and Default specify what partial portion of those contracts a trader wants to close, and Full allows the trader to close all related option contracts. |
These orders are, like so much else in the platform, optimized for active option traders who want to carry out their option trading strategies most effectively.
Trading Technology
Tastytrade is a technology-driven broker, which brings many advantages to trading through its platform. Like many brokers today, tastytrade uses a proprietary order routing system. The platform’s algorithms focus 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. Customers have even mentioned the fill performance on Trustpilot reviews.
Another advantage is that tastytrade offers fractional share trading, which makes higher priced stocks accessible even for smaller account sizes. If your favorite stock is trading for $1,000 per share, but your account only has $500 of buying power available, you could enter an order for .5 shares (or less) and get a fill. The fee for doing so is ten cents per trade.
No matter what the size of a trader’s account is, they are likely to find the strongest feature of this platform, by far, is its sophisticated analytics. The wide variety of ways to research and analyze an option trade or trading strategy leaves all other competitors behind.
It’s hard to imagine a way for any retail trader to get an edge in the overly competitive world of option trading, which is so heavily dominated by sophisticated math-driven pricing models. Yet tastytrade finds a way to make such advantages freely available to its customers each day through the design of its interface. It not only identifies pricing and strategy data (see illustration below), but helps a trader focus on where a pricing advantage might exist no matter what strategy is selected.
Costs
The base commission for option trading is $1 per contract and it is capped at $10 per trade (or per leg in combination trades). This innovative pricing means that a one-contract option trader is paying more than they might elsewhere, but a 100-contract trader is paying about ten-cents per contract. That’s nearly impossible to beat. As a bonus, there is no cost to close option positions making this platform the most cost-efficient option in the market. In addition to these prices, the following fees apply:
- Future contracts: $1.25 per contract.
- Micro futures: $0.85 per contract.
- Cryptocurrency purchases: 1% of the asset.
- Cryptocurrency sales: 1% of the sale (capped at $10 per order ticket).
- Margin interest base rate: 10%. ($50,000 to $100,000 balance, higher rates for lower balances and lower rates for higher).
- Domestic wire withdrawals: $25
- International wire withdrawals: $45
- Sending a check domestically costs $5 while sending a check internationally costs $10.
- Account transfer fee: $75.
- Reorganization fee: $50.
- Exercise and assignment fee: $5.
- Inactivity or account closure: no fee.
Of course there is no fee to access the platform, and there are no fees for ACH deposits and withdrawals.
How This Broker Makes Money From You and for You
The methods in which brokers make money from you have become less transparent over the years. Here are some ways tastytrade makes money from your business:
- 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. 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, a common practice among brokers nowadays. Tastytrade states that it is committed to achieving the best execution for customers and gives a breakdown of their payment for order flow activities.
- Margin: 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 Mar. 31, 2024.
Conversely, here are a couple ways tastytrade makes money for you:
- Price improvement: tastytrade’s smart order router attempts to achieve the best execution results for customers, and strives to save them money with price improvement (getting better fills than you are quoted).
- Commission caps: This is mentioned elsewhere but the cost comparison and savings are very significant for active traders just by putting commission caps on trades.
Account and Research Amenities
The tastytrade platform was built in-house using proprietary technology and brings to bear all the decades of experience collectively captured among its senior staff members. It offers limited portfolio analysis tools and no third-party research resources. Since tastytrade is built for the frequent trading of options, most of its research amenities are designed to help you act like a market maker.
Stock and ETF Screener
The tastytrade platform doesn’t have a dedicated stock screening tool, however, it does have sophisticated watchlist tools that accomplish a similar task. The platform has nine major categories of these characteristics (see table below).
| Category | Description |
|---|---|
| tasty | Preset watchlists that tastytrade staff finds helpful to research such as: 52-week highs/lows, top equities in the past hour, fast moving stocks, implied volatility (high/low), and more including Tom Sossnoff and Tony Batista’s favorites which are often reviewed on the tastylive streaming programs. A new addition to this list for 2024 includes a preset list for AI stocks. |
| Crypto | Preset watchlist of high volume cryptocurrencies and a preset watchlist of cryptocurrency ETFs. |
| Dividend | Two preset watchlists of dividend stocks that have increased their dividends over the past 25 year. “Aristocrats” are the mega caps among these, and “Champions” are all the others. |
| Earnings | Two preset watchlists of option-tradable stocks that have earnings coming up in the next week, one of which named tasty Earnings and focuses on those with the highest IV score |
| Futures | Present watchlists of all Futures, CME-traded futures, Micros, Small-exchange futures and futures that feature options. |
| Indicators | An oblique category of nearly 200 exchange-calculated indicators, some of which are familiar to floor traders and almost none of which are familiar to the average new options trader. Not to be confused with traditional technical studies. |
| Liquidity | Three presents including high options volume, liquid ETFs, and liquid stocks. |
| Market Indices | 16 Preset watchlists including the components of the S&P 500, S&P 100, Nasdaq 100 and several other industry-specific groupings. |
| Sectors | Eleven preset watchlists of stocks in each of the major sectors. |
| Other | Custom watchlist you can build from scratch or by cloning and modifying other watchlists. |
Options Screener
The platform does not have a dedicated platform screener as found in thinkorswim (the other Sossnoff-inspired option-trading platform). The prebuilt or custom-built watchlists.and analysis tools go a long way to helping you find trade ideas the way a screener does.
Tools and Calculators
One feature of the platform is an important calculation device. The purpose for it is subtle, but the impact can be powerful for a trader. Actively trading multiple option positions may generate more portfolio heat, or combined trade risk, than a trader anticipates. To help with this the tastytrade platform has a feature called the Portfolio Risk Analysis Tool. It can help you identify whether too many of your options are highly correlated to one another.
Charting
tastytrade has robust, interactive charting tools with over 250 available technical studies that can be used to analyze price and volume action. Fundamental research and news are also available. Chart windows can be detached from the main screen and spread across a multi-monitor setup for unlimited customization.
Trading Idea Generators
Within the platform tastytrade provides a link where you can follow any one of 20 ongoing feeds from tastylive experts such as Tom Sossnoff, Tony and Nick Battista, Liz Dierking, Jenny Andrews and many others. These expert option traders not only give you trade ideas, they explain them too.
News
News feeds are delivered along with the other information for a specified ticker symbol. These feeds pull financial news and broader topics from Reuters, Eikon, IFR and others. The news feeds are active around the clock and provide accurate, authoritative content to confirm or refine your trading ideas.
Cash Management
With uninvested cash earning 0.01%, and no banking features like ATM access available, tastytrade’s cash management offering is among the weakest in the industry. 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.
Fractional Dividend Reinvestment Plan (DRIP)
Tastytrade customers can specify dividend reinvestment for dividend-paying stocks, and, since the platform supports fractional share purchase, the dividends will reinvest into fractional shares rather than paying cash into the account.
Portfolio Analysis
Real-time portfolio statistics, such as the probability of profit, delta, theta, liquidity, and buying power, are displayed on the desktop application. Guidance on reading the performance reports and analysis are available to you on tastylive. Through the ongoing training on tastylive, traders can become familiar with the concepts behind the option greeks, and learn to recognize a portfolio’s sensitivity to market movements.
Education
The primary education and tutorial outlet for option trading the tastytrade way is tastylive. It’s tastytrade’s content network and free learning center that helps traders learn to get the most out of the platform. That’s doubly important when you consider tastytrade hasn’t yet developed paper trading functionality. So new users have to open accounts and trade small in order to learn the platform without losing a lot of money making mistakes as they trade.
The platform includes additional educational resources like blogs, videos, and an investing glossary. It also includes Cherry Picks, a weekly research report, and Cherry Bomb, a daily email with insights from Tom Sosnoff and Tom Preston.
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. According to Trustpilot reviews, tastytrade users find their customer service top notch.
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 well documented and referred to repeatedly on the tastylive programming. The commissions and fees webpage is easy to find, read, and understand.
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.)
The Bottom Line
Active traders seeking top-tier content, trading technology, pricing, functionality that are optimized for trading derivatives like options, futures, and futures options will be hard-pressed to find a better platform than tastytrade. While tastytrade is set up to handle advanced trading in these areas, the content made available through the tastylive network makes the platform an excellent place for beginners to develop the knowledge and skills necessary to become successful.
Compare tastytrade to Similar Online Brokers
| Broker | Star Rating | Minimum Deposit | Stock Trades | Per Contract Options | Max Option Legs | Number of No-Load Mutual Funds | Fractional Share Trading of Stocks | New Spot Bitcoin ETFs |
| Charles Schwab | 4.7 | $0.00 | $0.00 | $0.65 | 4 | 14,900 | Yes | Yes |
| tastytrade | 4.5 | $0.00 | $0.00 | $1.00/Open Only | 4 | 0 | Yes | Yes |
| E*TRADE | 4.5 | $0.00 | $0.00 | $0.65 | 4 | 6,310 | Yes | Yes |
Is tastytrade legit?
Yes. It is designed to help retail traders profitably trade options as quickly as possible. Shortening the learning curve like this develops their audience into the right kind of customer who loves tastytrade.
What Is tastytrade?
tastytrade is a brokerage that caters to active option traders. It helps them learn to trade like professional market makers and to also learn what to watch out for in the markets so they can minimize their risks. Trading this way requires specialized knowledge, so as part of its business model tastytrade sponsors and generates a lot of educational content about option trading through its tastylive network.
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Additionally, during our 2024 research, many of the companies we reviewed gave us live demonstrations of their platforms and services via video conferencing methods and also granted our team of expert writers and editors access to live accounts so they could perform hands-on testing.
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