Who's it for?
Tastyworks allows opening of an individual, entity/trust or joint account, and the account type held with the brokerage can be margin, cash or retirement. In margin trading, you are allowed to trade with borrowed capital, facilitating the use of all trading strategies available with the broker, while a cash account requires that you fully fund transactions, and also restricts usage of some trading strategies such as spread and uncovered options.
The retirement account offers tax advantages, and the limited margin capabilities available under this account type ensure that you can use defined risk spreads in addition to the basic trading strategies.
Traditional, Roth and SEP IRA are the different retirement account options available for clients, who can include an individual, an entity/trust, or two people, jointly.
Commissions and fees
- For stock options, tastyworks charges $1 to open a contract and a $0.10 clearing fee per contract but does not charge for contract closing.
- For options on futures, the brokerage charges $2.50 for opening a contract and a $0.30 clearing fee for each contract and exchange fee. However, closing doesn’t include a commission.
- For futures, tastyworks charges $1.25 per contract for opening and another $1.25 per contract for closing, while $0.30 clearing fee per contract and exchange fees are also applicable
- Stock trading requires a flat $5 for opening and a clearing fee of $0.0008 per share.
Margin trading rates:
Tastyworks doesn’t charge for ACH deposits and withdrawals, but fees are charged for several other banking functions such as outgoing domestic wire ($25), outgoing foreign wire ($45), domestic check ($5), foreign check ($5), dividend check ($5) and transfer and ship certificate ($235), as well as IRA closing fee ($60).
Trade-related fees such as exercise and assignment, options regulatory fee, SEC fee, clearing fee, etc. are also applicable.
The brokerage offers something new, called capped commissions, which cap the maximum commission a client pays on opening equity option trades to $10 per leg for listed options.
Platform and tools
Tastyworks allows trading through three platforms, namely desktop, browser, and mobile.
The firm promotes its downloadable desktop platform for high-volume traders who prefer a complete features toolkit. This includes lightning-fast quotes, fast execution speeds, advanced multi-account support and reporting and an intuitive dashboard layout and workflow.
The web-based trading platform allows access from any computer and gives all functionalities as the downloadable version. Some of the features in the browser version is the Follow page, where you can follow the firm’s curated experts’ trade, Trade Curve, which allows visualization of trades easily and the Trade History option, which helps you analyze your trades.
The mobile platform for on-the-move traders is available for iOS as well as Android. The platform has a feature-rich order entry interface with visualization and it has quick, easy methods for closing or rolling positions.
Charts can be viewed on the trade and grid pages, with the chart showing price, volatility and option volume. One can also view the chart for an underlying instrument from the trade page.
Research is mainly available in the form of tastytrade online live streaming video channel, with the research mainly focused on options. However, conventional analyst research reports, fundamental data on companies and technical analysis tools are not available for investors.
Tastyworks encrypts much of the data and interactions clients have, using high-standard encryption protocols. The connection of clients with the servers of tastyworks are signed with SSL certificates issued by trusted authorities.
User passwords are hashed for security purpose, while a two-factor authentication is done for sensitive actions such as fund transfer, changing contact information, etc.
Tastyworks’ website has a help page where assistance is available under several heads such as “Tax Center,” “Getting Started,” “Account Opening and Management,” “Deposits, Withdrawals and Transfers,” “Platform and Software” and “Trading.”
A live chat option is also available, which functions 7 a.m. to 5 p.m. CT, from Monday through Friday, except on market holidays.
Tradable Asset Classes
- U.S.-listed stocks
- U.S.-listed options
- U.S.-listed futures
- Agricultural commodities (corn, soybean and Chicago SRW wheat)
- Currency (AUD, GBP, CAD, EUR and JPY)
- Energy (crude oil, henry hub natural gas)
- Equity indexes (e-mini S&P 500, e-mini Nasdaq 100, e-mini Dow and e-mini Russell 2000)
- Interest rates (2-year, 5-year and 10-year treasury notes, 30-year treasury bonds, eurodollar and ultra U.S. treasury bond futures)
- Metals (gold and silver)
Tastyworks does not accept mutual fund opening orders, penny stocks, stocks listed in foreign exchanges and over-the-counter stocks.
Ease of use
Though opening an account is fairly easy, a prospective client is required to register with tastyworks ahead of time with an email address, username, and password, as well as:
- Address and phone numbers,
- Citizenship status,
- Personal information such as Social Security Number and employment information,
- Bank details and
- Copies of identity and address proofs.
Once an account is registered, it normally takes one to three days to be approved.
For money transfer, a U.S. citizen has several options such as wire transfer, setting up an ACH, check deposit and transfer of securities via automated customer account transfer, or ACAT. However, in most cases, an overseas investor may have to be content with a wire transfer.
Tastyworks is a better bet for an active trader who is particularly interested in options trading, and is not looking at a wide range of tradable securities. Although constrained by a lack of third-party research, the brokerage compensates with the educational videos and social sentiment insights made available through its parent tastytrade.
Another appealing factor is its cost competitiveness in the niche areas it operates. On the other hand, a beginner or a passive investor may do well to shun it, given the limited asset class options and very little handholding provided by the brokerage.
Use tastyworks if:
- You are an options-focused trader
- You prefer to be a hands-on investor
- You are price-conscious
Avoid tastyworks if:
- You are interested in trading a variety of financial assets
- You seek handholding to walk you the through the complex investing world