We recommend tastyworks for price-sensitive option traders focusing on the US.
Tastyworks is a US discount options broker. It is quite young, established in 2017. The people behind the platform are industry experts making their name with Thinkorswim, another platform. Tastyworks is regulated by the US regulator, but it is not listed on any exchange and does not have a banking parent.
Tastyworks has a competitive pricing plan and a platform designed for experienced options traders. It does not apply account or inactivity fee, neither a minimum balance. Combined this with a convenient account opening process it is an ideal broker to try if you are interested in option trading. It also operates a great trading and educational video channel.
On the flip side, tastyworks has a somewhat limited product range. Beside US options, US stocks and futures are available, and the platform is anyhow mainly built for options trading. Additionally, the trading platform sometimes feels like an early release, having a few bugs in the non-core parts.
All accounts up to $500,000 are secured by the US investor protection scheme which is a substantially higher amount than offered by most European investor protection schemes.
Scroll down for the full Tastyworks review.
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Gergely Korpos, 13 October 2017
Tastyworks is a young, upcoming US-based broker focusing on option trading. It is neither listed on an exchange nor have a banking parent. However, the people behind tastyworks are proven experts who built and operated Thinkorswim (now with TD), Dough (an option broker) and tastytrade (a trading video channel). Tastyworks is available for non-US citizens too.
In our tastyworks review we tested a margin account, (the Work).
Brokerchooser’s tastyworks review contains the following sections:
|Tastyworks Review Scores|
|Account protection you get||★★★★☆|
|Account opening process||★★★★☆|
|Money transfer and withdrawal||★★☆☆☆|
|Tastyworks's product portfolio||★★☆☆☆|
|Trading platforms offered|
Brokerchooser believes security is the most important broker selection criteria, so let’s kick off with investor protection.
Tastyworks is a US brokerage company as such you are covered by the US investor protection scheme, called SIPC. This is a big plus. It protects against the loss of cash and securities in case the broker goes bust. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash. A non-U.S. citizen with tastyworks is treated by the SIPC the same as a US resident in case something goes south. The $500,000 ($250,000) is a substantially higher amount than most European investor protection schemes.
At the time of tastyworks review the broker listed only Canadian and Australian citizens not eligible to open an account. BrokerChooser doesn’t know any other limitation regarding accepted clients. This means clients from Europe and all over the world can also open an account.
Tastyworks offers individual and retirement accounts. Joint and custodial accounts are expected to come soon.
The individual account has two options, margin and cash account. A cash account does not have margin benefits. That means you must be able to cover your trade's full purchase price with the money already in your account. For tastyworks there is no minimum account balance, but a 2000 USD balance is needed for the margin account to retain full margin privileges.
If you want to go with the retirement account (available only for US citizens), you can choose between traditional and roth IRA.
The account opening process is really fast. Tastyworks offers a 1 to 3 days approval time, but our account has been approved within the same day of registration.The account registration process takes 10-15 minutes and you go through straightforward steps. In the registration, you need to:
For US citizens multiple money transfer and withdrawal options are available, whereas non-US citizens very have limited options.
If you are a non-US citizen bank transfer is the most plausible way of a deposit, known as wire transfer in the US banking lingo. Tastyworks provides an easy to understand description on how to perform the wire transfer. Good to know it is not allowed to deposit money from an account under a different name.
If you are a US citizen beside the wire transfer you can also set up an ACH, deposit by check and transfer securities by Automated Customer Account Transfer (ACAT).
At the time of tastyworks review, there was not any card, Paypal, or Skrill payment options available and tastyworks only accepted a USD deposit. This means when you wire transfer non-USD it will be converted to USD. Tastyworks offers an option to circumvent non-ideal bank exchange rates by accepting money transfers by CurrencyFair.
Withdrawing money can be done the same way as making deposits, e.g. only wire transfer for non-US citizens, plus ACH and check for US citizens. In case of wire transfer, a relatively high $45 fee is charged for non-US transfers and a $25 for US transfers. The user interface for withdrawal wire transfer is customer friendly and easy to use.
Tastyworks has a somewhat limited product portfolio, you can access the US market via option, futures and stock trading.
Tastyworks has one of the lowest trading fees on the market. Additionally, its fee structure is easy to understand. It prices $1 per contract for option trades and a fixed $5 for a stock trade.
In contrast to other brokers tastyworks only charges for opening a position, closing is free of charge.
This is easy to understand, but where did tastyworks review land compared to its competitors? To the forefront, having lower prices than most of the established brokers. At stock trading it is among the bests, but a bit behind Interactive Brokers and DEGIRO. At options it has the same price as DEGIRO being better priced than IB. For a more detailed comparison visit our compare brokers table.
Because of the fixed price at stock trading, tastyworks can be better priced than Interactive Brokers and DEGIRO if the ticket size is large. Based on our back of the envelope calculation this only kicks in with larger than $25,000 ticket size.
Tastyworks’ non-trading fees are well summarized and easy to comprehend.
A big plus, and quite unique that it does not charge an account fee or inactivity fee.
As you also do not have a minimum balance this is a great broker to try out option trading. However, it is worth to mention that tastyworks imposes a relatively high fee on withdrawing your money ($25 for US citizens and $45 for non-US citizens). Its financing rate is also high compared to competitors. This is tiered based on the volume of your debt balance. Tastyworks applies a base rate and premium or discount depending on overall financed amount. The base rate is set by its discretion, at the time of the tastyworks review the base rate was 7%.
|Debt balance||Base rate + / -|
|$0 - $24,999||Base Rate + 1.00%|
|$25,000 - $49,999||Base Rate + 0.50%|
|$50,000 - $99,999||Base Rate|
|$100,000 - $249,999||Base Rate - 0.50%|
|$250,000 - $499,999||Base Rate - 1.00%|
|$500,000 - $999,999||Base Rate - 1.50%|
|$1,000,000 +||Base Rate - 2.00%|
Tastyworks’ trading platform feels like entering the cockpit of a plane. It looks organised, but also complicated at first sight.
The platform clearly targets option traders and stock trading is only a secondary focus. It is aimed for experienced traders, but this does not mean the platform is ugly or spartan. It is a well designed, usable professional platform. You partly have the feeling this is how a professional platform should look like and it also scares you a bit as it looks very complicated. What would help is a good tutorial. For example, simple description of the buttons and functions would be very helpful until you get used to the platform.
Tastyworks currently operate all three main platform type, a web platform, a downloadable desktop platform and a mobile platform. At the time of the tastyworks review, mobile was only available for iOS.
In some cases, the platforms seem like an early release having quite a few bugs. For example, linked educational videos do not start on the web platform, the currency of US stocks incorrectly appear denominated in your national currency on the mobile platform, etc.
These errors did not seem to affect the core functionality, but the platform needs a few fixes.
The web and the desktop platform have the same functionalities, but with a different layout. This is slightly confusing but you can get used to it. The mobile platform is fully functional, one can do the same functions as with the web platform, not a standard with all brokers. All platforms are available in English only.
Tastyworks on the net operates on three levels:
The web trading platform is well structured, but it is also complex. It is equipped with a very strong option trading panel and in our tastyworks review we found with a little bit of practice an advanced trader could easily find everything.
Tastyworks applies a single username / password login. The two-factor authentication is described on its security page, but at the time of tastyworks review we could not find how to set it up.
The web platform is divided into 3 sections. On the left you can find the menu structure, in the middle you see the content of the selected menu point and on the right there is a secondary information panel. The platform is not customizable, so you have to live with the default view. The default view is ok though.
The left panel is the main menu you can choose among the following functions:
The Trade function is a very strong trading panel for primarily option trading, but can also be used for stock trading. You will find three different trading views, two for option trading and one for stock trading. The stock trading panel is simple with all the standard order entry sections.
For the option trading you have the standard option chain, called table and a very unique visual trading interface, called curve.
Within the curve we always had the feeling of sitting in the cockpit of an alien starship.
It looks very complicated for the first, but you can also feel it must be very practical after getting the hang of it. And indeed, it is practical and useful. For example, a list of predefined option strategies are available, so opening an iron condor can take only two clicks.
You can also drag and drop the different option orders and easily edit the default parameters. We think this is one of the biggest selling points of the platform.
In the Home screen you have a collection of tiles, namely the grid, the follow and on the tastytrade video panels.
The Follow section is a quasi social trading interface.
Here you can follow and also, by one click, copy the trades of the tastyworks team members.
The guys are really active, so you will never struggle from not having trading ideas. We assume you, as an individual trader cannot be followed or copied yet as with eToro, but we could not find information about it.
The Portfolio tab gives an overview about your positions. It is well structured, has most of the elements needed. Its default setting is option trading focused by showing e.g. delta values, but the columns of the table can be easily customized. The portfolio tab has two main views, table and dashboard. In the table view you can follow your positions one by one and have an aggregated view on your profitability, extrinsic value and current balance. In the dashboard view you get a good overview about your historic performance. E.g. you can see your profitable trades, how your net liquidity changed throughout the time, etc. Your paid fees are not included on the Portfolio tab. That can be found in the Activity tab. All portfolio data can be really easily exported to a CSV.
The Grid tab is a watchlist. This is a great feature, as you can overview a wide range of assets in one view. All selected stocks have a well organised mini infographic with some fundamental data. This is also tailored for option trading, e.g. the most visible data points are implied volatility ranks. You can also create your own watchlist or use the preset watchlists. When you click on the icons you can initiate a trade on the specific company.
The Activity tab is a historic transaction summary. It is clean, easy to read, search and export. Your paid fees are easy to follow in this view.
The Analyze tab’s name is kind of misleading. It is in effect a trade journal where you can make notes for yourself. You can use it as a simple notepad, and additionally, you can click “Add entry” when trading. This will automatically add note to your journal.
The tastytrade section has videos from tastyworks’ trading channel. More precisely, the tastyworks is tastytrade’s trading platform, but we think you get the picture. Tastytrade has a live video stream in trading hours and also has multiple thematic video channels. This is a great feature with a lot of content. For more details, check out the tastyworks research review section.
The right panel works as an information panel letting you access additional data. It has seven tabs. The first tab is a basic share factsheet. You can search for a stock and the tab lists basic info such as price chart, P/E and volume. The given data is very basic and cannot be customized. The next tab is the same as the grid menu, e.g. it is a watchlist. The following tab is an earning calendar listing all earnings on a specific date including last year and projected EPS. In the next tabs you can set up alerts.The following two tabs are an open order list and information on order chains. The last tab is a correlation matrix. This right tab is quite handy and can be used well when trading.
Tastytrade is the only news source and as such a couple of basic features are missing from the platform:
The asset or ticker search panel is fast and gives mostly relevant results. We mostly test search functions with writing Japan and expecting among the results EWJ, the iShares Japan ETF. At our tastyworks review the search function did not list EWJ for a Japan search. For other assets, it worked quite well.
However, it is not obvious which exchange the underlying asset is listed on neither here nor anywhere along the whole trading process. When you try to search a non-US stock, usually you get an ADR or GDR. It seems you cannot trade these instruments, since the price information does not load. This is quite annoying and more transparency would be appreciated.
For option trading, you have ample predefined strategies. This is a highly useful and convenient function. The pre-defefined strategies are:
For stock trading you can choose from the following order types:
Tastyworks’ mobile platform works through an app. The iOS app is fully up and running, but the Android version was only in beta at the time of tastyworks review.
The mobile platform is a well designed, easy to use platform. It does not have all functionalities of the web platform, but you can do almost everything with it.
You can log in with your TouchID.
The menu has 7 options:
You can freeze three of these items to the front page and conveniently reach the rest with an extra tap. Most of these items are same as on the web platform. The trade function is a bit different but very intuitive. You need to choose first a strategy (e.g. stock, buy call, buy a straddle, etc.) then continue with the details.
Same as the web platform, the mobile also has bugs. The app shows prices in the local currency (e.g in HUF in our case), even though everything is obviously in USD. Buying an Apple share for ~150HUF ($0.6) would be a good deal indeed.
The desktop platform is practically the same as the web platform with a different layout. E.g. the stock order entry panel is missing, there is no grid, etc. The differences can be relatively confusing at the beginning, but in roughly an hour you will find everything.
On the other hand, we were not quite sure why we would use the desktop platform when practically it is the same as the web.
Tastyworks redefines research and trading. It does not provide traditional analyst reports, fundamental data database, or technical analysis tools. However, it provides tastytrade, a lively financial video streaming channel. We liked tastytrade very much, but as almost all other research tools are missing, the research section is quite limited and focuses almost only on option trading.
Tastytrade, the video streaming service is a lively channel. You have access to a wide range of very useful option and futures trading contents.
The tastytrade team runs a live trading show throughout the whole trading time each weekday. They cover interesting and valuable content about options and trading.
Parallel to the live show you have access to several other thematic video series (also called shows) and even trading documentaries.
Apart from the show videos, there is a really good thematic learning section, where you can build up your option trading knowledge base from the scratch. The educational videos generally have really good quality and are also enjoyable, which is a big plus when you are consuming financial content.
We especially liked the tone of Rachel’s introduction video course, the “Step up to options”.
If you want more you can find useful articles on the tastytrade blog.
On the platforms, you can find some very basic fundamental data about the stock (e.g. P/E and dividend yield) and useful indicators for option traders, like the greeks, implied volatility, tastyworks’ proprietary IV rank, or the correlation matrix with stocks and indices like the S&P 500.
The technical analysis and interactive chart function is underdeveloped compared to other brokers, so if you trade stock based on the charts, this is definitely not your platform. One of the useful ones is the volatility chart, again, targeting option traders.
If you run out of trading ideas, a useful function is the follow section, where you can check and copy the trades (one by one) of the team members of tastyworks. You can straight away execute the same trade if you want to.
The tastytrade videos are also included into the trading platforms, but we quite frequently experienced video loading problems and could not use this function on the web platform.
Tastyworks provide customer support through chat, email and calls. When making the tastyworks review of the customer centre we had a good experience with the chat function. Customer care answered professionally also to non standard questions. The tone and the speed was also right.
The customer service is available in English, our agents seemed to be from the US and from the company, did not seem like an outsourced agent.
Tastyworks is an excellent broker for option trading, but not recommended if you want to trade only with stocks. It is a US-based broker, hence investor protection scheme is excellent. Fees are very competitive, among the bests. Its trading platform is aimed at experienced traders, great for options, but intimidating for starters. It also has some bugs. With having no minimum balance, zero inactivity and monthly fee and a seamless account opening process Brokerchooser would recommend to try it.