tastytrade Review

Disclaimer: tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Benzinga (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade. tastytrade and tastylive, Inc. (“tastylive”) are separate but affiliated companies. tastytrade is a sophisticated options and futures broker aimed toward experienced traders. The platform was designed by the founders of thinkorswim with functionality and precision for complicated options trades and strategies. tastytrade offers stocks and ETFs to trade too, but the main focus is options. Options on tastytrade are only charged a 1-way, $1 commission — far cheaper than almost all competitors. Commissions on futures and micro futures are also affordable, and there’s no minimum required to open a cash account. It’s $2,000 if you want to use margin. Reasons to UsePowerful platform inspired by thinkorswimMultiple order types and strategiesCheap options commissionsPotential DrawbacksAdvanced platform could intimidate new tradersNo demo or paper tradingtastytrade Ratings at a GlanceFees and CommissionsUsabilityEducationCustomer SupportOfferingsMobile AppOverall Ratingtastytrade is a US-based brokerage firm that targets options traders, specifically those who trade the short-volatility style espoused by the firm’s founder Tom Sosnoff on his financial network tastylive. The tastytrade trading platform and fee model are optimized for trading the high probability-of-profit, short-volatility options spreads that the tastylive audience are such a fan of.***tastytrade is a separate but affiliated company of tastylive.Table of ContentsWhy tastytrade Over Others?  tastytrade Quick Summary tastytrade UsersSee All 13 ItemsWhy tastytrade Over Others? tastytrade is geared toward advanced traders who have experience with complex multi-leg trades like iron condors and iron butterflies. Its 3 platforms offer a variety of charting and analysis tools and offer several advantages over competitors, such as:Easy onboarding. tastytrade might be a platform for advanced traders, but signing up and getting an account funded certainly isn’t an advanced process. It takes less than 5 minutes and all necessary documents and forms can be easily found on the tastytrade website. Accounts can be funded via ACH from any bank account with U.S. currency. Strong leadership. tastytrade was created by the brains behind 1 of the world’s most powerful trading platforms — thinkorswim. The founders are thinkorswim co-creators Scott Sheridan and Tom Sosnoff. Affordable derivatives. Most brokers have gone commission-free for stock, ETF and mutual fund trades but finding cheap derivatives remains an obstacle. Webull and Robinhood offer free options trading but with limited choices and high spreads. The standard options fee is $0.65 per contract, but that means a commission is paid both opening and closing a trade. You wind up paying $1.30 for a round-trip options trade. tastytrade is different. When trading options, you only pay a commission to open the trade. Futures trades do have an open and close commission, but at a mere $1.00 per contract, they’re still far cheaper than most competitors. Stocks and ETF trades are commission-free at tastytrade.tastytrade Quick Summary Asset Classes Stocks, ETFs, options, futures, micro futures, options on futuresPlatformtastytrade desktop, tastytrade web, tastytrade mobileMobile AppAvailable for iOS, retains most functionality from desktop and browser appsAccount MinimumNo minimums to open accounts, $2,000 required to use margin. Note: Certain futures trading and naked short calls in IRA accounts require $5,000 to $25,000.Available Account TypesTaxable margin joint IRA (traditional, Roth, SEP)Corporate trust (C-corp, S-corp, LLC, partnership) tastytrade UsersStill, if you’re an active options trader applying a different strategy, the commission structure will still be hugely beneficial to you if you frequently trade spreads.If you frequently trade multi-legged options spreads like Butterflies or Iron Condors, you know how much commissions can eat into your P&L, especially in the lower-priced underlyings. Even at today’s low industry average rates of about $0.65/contract, just five lots of an at-the-money Iron Condor in SPY would cost you $26 in commission for a round trip (opening and closing the position).Under the tastytrade commission structure, you pay $1 per contract to open a trade, but closing the trade is free. So those same five lots of the Iron Condor would cost you $20 for a round trip.Before we get more into the finer details of the tastytrade platform and such, let’s cover the basics like fees and account types.tastytrade Fees and Commissionstastytrade uses a different commission model for options than most other brokers, but it’s easy to understand, and the majority of the time, it reduces your commission costs.tastytrade charges $1.00 per contract to open, and $0.00 per contract to close trades. So the round-trip for one contract is $1.00. This is in contrast to the rest of the industry, which charges $0.65 per contract, but charges you on both opening and closing transactions, making a round trip cost $1.30 per contract.tastytrade also gives significant discounts to large orders, capping the commissions at $10 per leg. This is where you will see really significant savings. This comparison is meant to show you how much the commission savings at tastytrade compound when you trade in larger size.Let’s look at a few example trades to illustrate this: Positiontastytrade Round-trip CommissionIndustry Standard Round-trip Commission1 contract$1.00$1.30Vertical Spread, 1 lot (2 contracts)$2.002.60Vertical Spread, 10 lots (20 contracts)$20.00$26.00Vertical Spread, 50 lots (100 contracts$20.00$260.00Iron Condor, 1 lot (4 contracts)$4.00$5.20Iron Condor, 50 lots (200 contracts)$40.00$520.00 tastytrade Usabilitytastytrade has a learning curve, especially if you’re new to derivatives. Buying and selling stocks is still as simple as clicking the bid or ask price and entering your order, but inexperienced traders are going to have no idea what uncovered puts or iron condors are. There’s no demo or paper trading account, so you’ll need a strong knowledge base going in. If options and futures bewilder you, tastylive.com offers educational materials about types of options orders and futures strategies.With tastytrade, you can expect to find:Easy-to-execute trades with multiple order types. Complex options trades are simplified thanks to tastytrade’s interface. You’ll be able to enter multi-leg trades with a handful of clicks, set up limit or stop-loss orders and rollover option positions with ease. Orders are easily replaced or canceled and several different order fill methods are available.Follow feed and in-platform video. tastytrade offers access to some social media features on the platform like the Follow Feed which is provided by tastylive. Much like Twitter, users can follow their favorite traders and copy their moves and strategies. You’ll be able to see market pros act in real-time. Then there’s the in-platform video, where you’ll heartastylive traders discussing strategies in real-time right on your screen.Videos and articles explain how to use the platform. Research sources are limited to the tastylive sphere, but the platform instructional materials are terrific. If you’re unsure how to use the platform efficiently, tastytrade’s video library will demonstrate how to trade stocks, options and futures, as well as manage positions properly. Know how to roll over options trades? If not, there’s a YouTube video for you! Navigating the platform might be intimidating at first, but tastytrade’s library of educational materials cover every bell and whistle.tastytrade EducationWhen you sign up for an account with tastytrade, it’s a good idea to already know what you’re doing in the options and futures markets. If you’re looking for a brokerage to hold your hand while learning to trade, you’ve downloaded the wrong platform. You won’t find advice on retirement or mutual funds in the tastytrade education library. But you will find is a wealth of how-to articles and videos discussing the nuances of the platform. The support section is broken down into 6 different pillars:Account opening and managementGetting startedSoftware, platform and tech supportDeposits, withdrawals and transfersTrading, buying power and marginTax centerThe support section not only teaches users how to use the service’s many features but also how platform plumbing works. You’ll get answers to questions about transfers, margin calls, trading techniques, account types, account management, order entry and more. To get access to tastylive’s market research, you’ll need to sign up for an account at both tastytrade and tastylive’s newsletter, which is free to join.Mobile Apptastytrade mobile app is very similar to its online platform. It includes all of the major functions and is user-friendly. tastytrade mobile app is available for both iOS and Android.tastytrade Customer SupportClick the “Get Help” box at the bottom of each tastytrade webpage to get a standard support request form. You’ll get a canned answer from a chatbot that usually directs you to a help article. For better options, see the contact table below. Emailsupport@tastytrade.comPhone888-247-1963 (7am-5pm CST Monday-Thursday & 7am-4pm CST Friday)ChatWebsite Chat (must go through chat bot first) tastytrade Offeringstastytrade is focused on options trading, but it still has a great selection of stocks, ETFs and other derivatives like futures and micro futures. Stocks and ETFs trade commission-free and options are only charged commission when the position is opened. Standard futures contracts still carry commissions to open and close, but commissions are capped on complex options trades with multiple legs.tastytrade Stocks and ETFs You can trade stocks and ETFs on tastytrade. Trading stocks and ETFs can be done simply by clicking on the bid or ask price. tastytrade now offers a full research tab for fundamental analysis and in platform news on specific symbols or general market news. Stocks and ETFs are always free to trade. Watchlists are easy to create and charts are smooth and interactive.tastytrade Options tastytrade offers options not only on equities but on futures contracts as well. The platform is specialized for complex, multi-leg options trades like iron condors and vertical spreads. Active traders will be happy to see the capped commissions on these multi-leg option trades, which are sometimes significantly lower than those offered by competitors. Options trades are only charged a single-way $1 fee per contract, which maxes out at $10. There’s no commission on closing trades!tastytrade Futures tastytrade clients can trade both normal futures contracts and micro futures. Regular futures contracts have a $1.00 per contract fee on both open and close, but the micro contracts are only charged $0.75 on open and close. Users can trade futures contracts on U.S. indices, interest rates, foreign currencies, energy, metals and grains. Overall, there are over 50 different futures products available, which pales in comparison to tastytrade’s strongest competitors.tastytrade Mobile AppThe tastytrade mobile app is available for iOS and Android, and you won’t find any loss in on-the-go functionality. Features like curve roll and percent of profit orders are still available. Trade execution can be just as quick and flawless as the desktop platform. The social aspects carry over to the mobile platform as well, including the trader feed which allows users to copy trade their favorite follows. However, some reviews claim the app is clunky, freezes often and can make it difficult to execute trades. tastytrade Overall Ratingtastytrade makes options trading a breeze. Commissions are cheap, the platform is functional and intuitive and your choice of securities stretches into the territory of futures. But stock and ETF traders will find simpler, more accessible platforms elsewhere and experienced futures traders may prefer a more varied list of securities. There’s no forex trading and fixed-income products like bonds or mortgage-backed securities are unavailable. If you want more than just efficient options trading, tastytrade might leave you disappointed.Overall, tastytrade is a great offshoot of the tastylive brand. tastytrade offers the technology, management team and price points to remain a threat to legacy brokers for a long time.Frequently Asked QuestionsQDoes tastytrade offer any promotions?AYes. The broker has offered some solid promotions for new users in the past. Promos include a 1% cash match on qualifying deposits (up to $2,000) and 30 days of commission-free trading.) Visit tastytrade online to check out its latest promotion. QHow can I learn to trade options or futures?AYou can find reputable online courses to get you started trading options or futures. Take a look at our review of the best courses to learn options trading. We highlight 9 options you can enroll in now. Review how to trade futures in this guide, and comb through our top picks for the best futures trading classes. MethodologyFor brokerage reviews, Benzinga created a weighted scale based on the following criteria: usability, services offered, customer service, education, research, mobile app, account minimums and fees. We aim to provide the most up-to-date, impactful and trustworthy reviews. For an in-depth look at our process, read the full methodology process.