Currently, Gatsby is unavailable and a waitlist has been established for potential clients. Benzinga has been given an exclusive sneak peek at the inner workings of the platform.
Who’s Gatsby For?
Gatsby combines the best features of free brokers like Robinhood, traditional outfits like Charles Schwab and social trading platforms like eToro bundled into an inclusive mobile trading experience. The platform is aimed toward retail investors, with a goal to bring new retail options traders to the market.
According to research from Gatsby’s founders, there are currently over 1 million retail options traders in the United States today. Over $1.5 trillion worth of options contracts were traded in 2018, a staggering number equal to the entire amount of student loan debt in America.
Speaking of student debt, younger traders are exactly who Gatsby targets, with its slick platform and simplified trading experience. You don’t need to study markets for a decade or read an entire library’s worth of investing books.
As you build up your social trading network, you can find trade inspiration or ideas from the experts and your friends on the social feed.
Gatsby’s Platform and Tools
Gatsby’s goal is to become the best options broker for the millennial demographic. It’s rolled out a platform that’s both aesthetically appealing and simple to navigate. Before creating a profile, Gatsby asks prospective clients a few questions to assess their options trading prowess.
Once you’ve established your identity and are granted permission to trade options, you can fund your account and begin building your social network.
On the main screen, you’ll be able to view your portfolio and open positions in the first tab. In the second tab, you have your social network. This is where you can view other people’s trades and make comments.
Much like Twitter, you can interact and discuss ideas. These can be options trading strategies or off-topic subjects like how your favorite baseball team played last night. If options trading intimidates you, you can follow more experienced traders to overcome your fear while gaining insight into what trades to make.
Making a trade is a streamlined process that involves zero Greek letters. Simply pick the stock or ETF you want and decide if you want on a call (stock going up) or a put (stock going down).
After you choose a call or a put, select your expiration date. Then, determine your strike price and choose how many contracts you want to buy. One lot is 100 contracts on Gatsby. After you enter your trade, swipe up to confirm and your trade will be executed.
No jargon, no complex formulas — just four clicks and you’ve got a new position.
Gatsby’s Research Offerings
As Gatsby is free to use, traders do not get access to advanced market research. Users are pretty much on their own when it comes to researching picks, but are supplemented by the integration of the social trading network.
You can crowdsource your research and use the due diligence of experienced traders to make informed decisions. Much like how Twitter is the place for breaking news or sports scores, you can react to Federal Reserve minutes, earnings reports and market news breaks in real time and follow the trades of your favorite experts.
Gatsby’s Commission and Fees
Gatsby wants to bring retail traders into the fold, and the best way to do this is to knock down fees to the bare minimum. Take Robinhood, for example. It’s a bare-bones platform with little market research and very few employees. One important element of Robinhood’s success comes from the simple platform being free.
Gatsby provides options trading software that charges no commission on any type of trade, whether buying calls or puts. If you want to bet against Apple, you won’t be charged no matter how many put contracts you buy.
Additionally, there’s no minimum to open an account and the minimum trade size is 100 contracts. You will need $10 to open an account, however.
Note that this doesn’t mean it’s a completely free trading experience. Options can have much wider spreads than their underlying stocks and volatile markets are hampered by slippage.
Slippage occurs when a trade is entered and executed at two different prices. Be wary of these factors when trading options — they aren’t as simple as Gatsby implies.
Gatsby is not a registered broker or investment advisor. The brokerage service is actually run by Third Party LLC, a FINRA and SIPC member.
Gatsby uses Apex Clearing to hold customer accounts and clients’ personal information is secured using the most up-to-date encryption technology. Apex Clearing is also insured by SIPC, so if either Apex Clearing or Third Party LLC suffer financial difficulty, customer funds will be safe. Apex Clearing has an additional insurance policy through London Underwriters as well.
Gatsby also has an experienced team at the helm. Co-founders Jeff Myers and Ryan Belanger-Saleh previously worked at NBC Universal and Blue Technologies, respectively.
They have decades of experience designing and implementing mobile apps. Other executives have histories with Goldman Sachs, the Chicago Board Options Exchange (CBOE), Chakin Analytics, Instinet and Reuters.
Gatsby’s Customer Support
Giving a customer support grade for a platform that’s only in beta testing might be a little unfair. When it comes to financial products like options, it’s critical to have an open line of communication with your brokerage or investment services.
You won’t find a phone number or chat option on the Gatsby website nor a physical mailing address.
Email support is available 24/7 for users. You can email email@example.com if you’re having technical issues or have questions about the platform.
Gatsby’s Tradable Asset Classes
Right now, Gatsby only offers options trading. You can find options for any stock or ETF with an underlying liquid options market. Buy calls or puts based on whether you think the underlying stock will go up or down in price within the specified time period.
Some of Gatsby’s most popular stocks to trade options on are Apple, Tesla and SPY. Since the platform aims for simplicity and transparency, sophisticated strategies like shorting call options aren’t available.
Gatsby’s Ease of Use
Do you have zero experience trading options? No problem! Gatsby’s platform will guide you through the process step by step. Your social network is easily accessed and communicating with other traders is as easy as sending a Tweet.
Gatsby doesn’t require a large amount of capital to begin trading, either — you can start with as little as $10.
Simplicity can be a double-edged sword, however, especially with sophisticated financial products like options. Copy trading makes it seem like anyone can make a fortune in the markets, but you need to know why experts make the trades they make. Trading is an art — it’s best to learn that there are no universal rules or constants.
Gatsby is only available via invite right now and the waitlist already totals 11,000. Its platform is intriguing and its combination of social trading with the options market is sure to increase the number of market participants.
Gatsby does have a tendency to make the options market seem like a casino game, so potential users will need to educate themselves about the complexities of trading options.
It also offers no market research, so you’ll need to do that elsewhere. Still, the app is simple and very functional and the team behind offers a wealth of experience. Benzinga is excited to track Gatsby over the next few years.