tastytrade

tastytrade is an online broker app that’s well suited for active, experienced traders, and they offer a ton of opportunities for online trading, including commission-free stocks, ETFs, and options. A prime advantage to using tastytrade is its transparent fee structure and caps commissions on trades, regardless of their size. Traders can enjoy a mobile trading experience or use the platform on their desktop computer. Each version comes with its own unique perks that make the experience enjoyable for different reasons.

Our tastytrade review will highlight the key features and benefits that come with the trading platform that make it ideal for active trading. In addition to the fee structure and product selection, we’ll take the time also to review the helpful educational features that tastytrade includes for its customers, as well as pros and cons for this broker.

As you read through this in-depth review of tastytrade we strongly recommend thinking about the specific characteristics that you are looking for when it comes to selecting a trading platform. By doing this, it will allow you to better gauge whether tastytrade is right for you.

Pros and Cons of tastytrade

tastytrade isn’t the ideal choice for an options trading app for everyone, so the platform has several drawbacks despite its many advantages. Much of this stems from the broker app catering to a specific kind of trader—active traders with a lot of experience in the industry. Let’s look at the primary pros and cons of tastytrade to discover which benefits you can enjoy and what challenges might await you.

Pros

• Suitable for active and experienced traders
• Quality analysis and research tools
• User-friendly mobile app and desktop version
• Low options fees
• No inactivity fee
• Free stock trading
• User-friendly banking options
• No deposit fees
• Customizable desktop version
• Quick, fully digital account sign-up
• Free ACH withdrawals (US)

Cons

• Not a good option for beginners or novice traders
• The features can be overwhelming for some people
• The fee structure isn’t suited for newbies
• A limited selection of production
• No paper trading available
• Limited deposit/payout options
• Credit/debit cards aren’t available
• High margin rates (stock trading)
• Bank transfers come with a withdrawal fee
• No price alerts on the mobile app

Key Highlights

Before we get into the finer details of this tastytrade review, let’s take a quick look at some of the key highlights that traders and investors would like to know about this options trading platform, specifically information that shows it is a trusted and competitive broker compared to other industry competitors.

Unique Features

tastytrade offers its users several features that stand out and set this broker apart from competitors. If you are wowed by the amenities this options trading app carries for its customers, it is an excellent option to consider for your online trading goals and objectives.

• Curve Analysis: This tool lets traders set up the entry points of their trades. Placing these trades in the “curve mode” will allow you to toggle the quick analysis tabs to view probability metrics, max profit/loss, greeks, and break even points.
• tastytrade Live Feed: Customers can view professional traders using tastytrade in real-time to gain insights into their research, strategies, and market movements. The live feed lets customers overhear these seasoned traders’ conversations, which can be an invaluable wealth of learning and knowledge.
• Backtesting: While this feature is a part of many online trading apps, we’d be remiss if we didn’t mention that tastytrade offers backtesting tools for its customers. In a few easy steps, traders can simulate trade ideas to discover if specific strategies or techniques are worth the time and effort.
• Quick Roll: This helpful tool lets traders roll their option position into the next expiration date. Traders can do this with a right click and set their default rolls to the next weekly or monthly expiration date for a highly efficient trading experience.
• Follow Feed: Traders can use this tool to follow other traders and learn their best tips and tricks for trading options—they can discover other traders’ favorite moves. The “follow feed” lets you filter traders by symbols, the date placed, strategy, or trade type (pairs trades, earnings plays, etc.).
• Limit Orders: tastytrade’s limit orders let traders choose probabilities over prediction with the “percent-of-profit” tool. It allows the user to select a price with better odds of occurring instead of a random price target.
• Order Adjustments: tastytrade lets its members change their working orders quickly with adjustment features which let them cancel, duplicate, invert, or replace with short notice.
• Trader’s Block: Some traders lose momentum when it comes to new trading ideas and strategies, so several resources are available to get the creative juices flowing once more. This includes in-platform video content, where traders can hear conversations about strategy, concepts, and research from experienced traders and watch them trade in real-time.
• Watch List: Traders can keep a list of symbols they’d like to track and add them to their personal watch list. When the time comes to access those symbols, traders need only open the watch list and click on the symbol to proceed.

Commission Structure and Fees

In addition to having no inactivity fee, tastytrade offers much lower fees compared to its competitors. In this next section, we’ll take a deeper dive into the commission structure and fees you’ll find with this online broker app. Something that’s good to know ahead of time is that tastytrade has higher margin rates than the norm, and there’s a substantial withdrawal fee for wire transfers within the United States.

Trading Fees

tastytrade isn’t just a good choice for active traders, but it’s also a great option for traders who want to keep the overhead low, relatively speaking. The lower fees can help traders accomplish this goal!

• Stock and ETF Commission: $0.00
• Annual Margin Rates: 11.0%
• Opening a Contract: $1
• Exercise and Assignment Fee: $5 per leg
• Stock Index Options Commission: $5.00
• Inactivity Fee: N/A
• Withdrawal Fee: N/A
• Wire Transfer Fee: $25 (within the US)
• International Wire Transfers: $45
• Low Futures Fee: $0.85 per contract
• Low Spot Crypto Fees: Crypto trading costs 0% of trade value
• US Micro e-Mini Stock Index Futures: $8.5

Opening Commissions

• Options on Stock and ETFs: $1.00 per construct ($10 max per leg)
• Options on Futures: $2.50 per contract
• Options on Micro Futures: $1.50 per contract
• Stock and ETFs: $0 (unlimited shares)
• Futures: $1.25 per contract
• Micro Futures: $0.85 per contract
• Smalls Futures: $0.25 per contract
• Small Futures Options: $0.50 per contract
• Cryptocurrency: 1% of total crypto purchase

Closing Commissions

• Futures: $1.25 per contract
• Micro Futures: $0.85 per contract
• Smalls Futures: $0.25 per contract
• Cryptocurrency: 1% of total crypto sale

Comparison with Other Competitors

How does tastytrade stack up against its competitors regarding fees or commissions? We’ve created a comparison chart with Interactive Brokers and TradeStation to see where tastytrade falls in the mix. Generally, traders see tastytrade as one of the market’s more affordable options.

Account Types

Traders and investors must consider their investment goals and personal risk tolerance when choosing a trading account that’s most suitable for their objectives. Different accounts have different features that make for unique trading experiences. When in doubt about which is best for you, consider your overall investment goals and use demo accounts whenever possible to get some hands-on experience without risking any of your own capital.

Account Options

• Individual: Standard trading accounts for individuals include cash, portfolio margin, or standard margin accounts. Cash accounts let investors use their own money, while margin accounts allow investors to borrow money from the broker to buy securities like stocks, ETFs, or other options.
• Joint: Just as individual traders can open cash or margin accounts, tastytrade users can also open these accounts with another person. These accounts are specially designed for two people who share common goals and want to pool capital to make them a reality.
• Retirement: tastytrade offers cash or margin accounts for individuals looking to save up for retirement. These are good long-term investment vehicles that are super beneficial from a tax perspective, but they must be done carefully for traders to reap the rewards later.
• Business: A legally established business in the US can also open a tastytrade account (cash, margin, or portfolio margin) to invest, manage their own funds, and conduct financial transactions.
• Trust: Traders can open cash or margin accounts for a revocable or irrevocable trust. These legal arrangements let trustees manage assets on a beneficiary’s behalf.
• SEP IRA: These are individual retirement accounts that small business owners or self-employed people can use. SEP stands for “simplified employee pension.” They let employers contribute to their own or their employees’ retirement plans.
• With Rights of Survivorship: tastytrade allows its members to open joint accounts where two owners have an equal share of the assets. If one owner passes, the other owner will inherit half of the shared assets.
• Tenants in Common: Another account type that tastytrade members can open is a “tenants in common” account, where two or more people own a property together, with each having a share of the property. When an owner dies, their shares go to the beneficiaries or heirs named in the will.

Minimum Deposit

The great news with tastytrade is that there aren’t any minimum deposit requirements to open or maintain a brokerage account, specifically, no minimum deposit for cash accounts. Margin accounts are a different story. You must maintain a minimum account balance of $2,000 to use a margin account, where you borrow money from the broker to change.

Account Features

We touched a bit on the unique features that set tastytrade apart from its competitors, but there are a few more that we wanted to address, specifically the three levels that come with margin accounts. Plus, we wanted to touch on a few valuable options trading features that allow traders to analyze their trades successfully before executing them.

• Analysis tab
• Portfolio risk analysis tool
• Create trading strategies
• Access risk management strategies

Margin Account with Three Levels

The tastytrade cash accounts come with a single level, while their margin accounts come with three levels:

• The Works: This is tastytrade’s highest margin account level where investors can access ETFs, options, stocks, futures, cryptos, and smalls. In addition to access to various products, traders and investors on the app can sell naked calls, naked outs, covered calls, uncovered calls, and short-selling stocks.
• Basic: The next step down allows traders and investors to access options, stocks, cryptos, and ETFs. They can also sell naked puts, covered calls, and defined-risk options spreads.
• Limited: The most basic version for margin accounts with tastytrade, the limited level lets traders access options, stocks, and ETFs. Plus, they can trade cryptos and sell covered calls and cash-secured put options.

Trading Platform

One of the primary keys to tastytrade’s appeal and success in the online options trading market is its top-notch platform, which enables investors and traders to enjoy commission-free stock, ETF, and options trading for low fees. We’ll highlight the user experience at tastytrade as we discuss the platform formats for traders to use and the helpful tools and features that let people execute their trades quickly, efficiently, and accurately.

There are several platforms that traders and investors can use to access tastytrade:

• A downloadable version for a desktop computer
• A web-based platform that can be accessed by computer or mobile device
• An iOS and Android mobile app available only for smartphones, tablets, and other mobile devices

Usability

The user experience at tastytrade has a mixed reception from users. Some state that the layout is genius, an excellent platform for trading on desktop and laptop computers’ bigger screens. Others claim the learning curve of taking up the tastytrade website or mobile app is steep. This speaks to the nature of tastytrade and its design for active, experienced traders. It takes some time to navigate the app and website to learn and use it efficiently. It’s ultimately easy to use, but it’s not exactly intuitive.

Tools and Features

Let’s take another quick look at the available trading tools, charting options, and technical analysis tools:

• Charting: While the app won’t allow traders to include studies or annotations on the charts, the charting tool on the desktop version of tastytrade lets its users do so. Both formats include crystal clear charts and a supportive horizontal view.
• Trading Tools: Other helpful resources include order entry, risk management, and profit/loss diagrams. Traders can also enjoy customization options like dragging option legs until they align with their trading plan based on profit estimations, max gain/loss stats, and implied volatility.
• Video Content: This tool lets tastytrade investors listen in on other traders in the midst of their trading sessions to hear their ideas when it comes to trading strategies and techniques. It’s a great educational resource where you can learn about trading from those with much more experience.

The main difference we found between the tastytrade web version and the mobile app was that order confirmations are only available with the app, and price alerts are only available with the web version. Overall, the app and the website function the same, and inventors and traders can enjoy helpful video content (and other educational resources), trading tools, and charting capabilities.

Research and Education

Any good trader takes the time to continue learning about options trading, regardless of their years of experience. Even using a platform like tastytrade, which caters to experienced and active traders, these customers should ideally have access to helpful market research and educational tools to keep their skills sharp. Luckily, tastytrade carries a wide range of these educational resources!

Educational Resources

tastytrade comes with a wealth of tutorials, webinars, articles, and other learning materials:

• Watch video tutorials to learn the basics of options trading.
• The website has tutorial guides on trading terminology, such as calls, puts, expiration dates, strike prices, and intrinsic/extrinsic value.
• Find out how the tastytrade platform works through a live demo.
• Access the tastytrade help center to find popular articles on the website and mobile app’s most common aspects.

Research Tools

tastytrade users can access market research and analysis done through third-party research reports. Users can conveniently access this data, including income statements, balance sheets, and cash flow statements, to understand how well the companies they are investing in are doing. Traders and investors can see other information like net income, liabilities, revenue, and assets by quarter or by the year.

Support for Traders

While there aren’t overt mentoring or coaching services available at tastytrade, investors looking for additional perspective or advice in their strategies or techniques can gain insights from other traders on the tasty live stream. They can watch these seasoned professionals performing trades in real-time and glean knowledge from their creative approaches to new challenges that arise.

Security and Regulation

As a duty to its customers, tastytrade regularly audits, reviews, and fortifies its code and security systems to ensure a safe online trading environment. The site also monitors its employees’ access to data and runs background checks on any new employees they bring into the fold.

Regulatory Compliance

tastytrade is subject to oversight by regulatory agencies, including the following entities and bodies:

• National Futures Association (NFA)
• Securities and Exchange COmmission (SEC)
• Financial Industry Regulatory Authority (FINRA)

The site is also subject to Rule 6060, which holds tastytrade to inform customers about payment for order flow practices. tastytrade also provides disclosure for futures (Futures Options Disclosure Statement and CFTC Rule 1.55 Risk Disclosure Statement).

Security Measures

tastytrade also has measures to protect user data and funds, including encrypted connections and two-factor authentication for login.

• SSL-Encrypted Connection: SSL stands for secured socket layer, which keeps the connection between the trader or investor and the tastytrade platform completely safe and secure from outside threats. If anyone hacking into the system gets in, any sensitive information or data is organized into a jumble of symbols that cannot be read.
• Two Factor Authentication: Another security measure employed by tastytrade are two forms of authentication required to access your account. This provides an additional layer of protection to keep outsiders from getting into your personal account to access your most private data and information.

Insurance

tastytrade is an official member of SIPC (the Securities Investor Protection Corporation), which protects its traders and investors up to $500,000.

User Experience

We mentioned before that many people with a lot of experience using tastytrade have called the platform easy to use but not entirely intuitive. This next section of the review will shed more light on the topic to give you a better understanding of what those users were referring to.

Account Setup

In doing this review of tastytrade, we were struck by the ease of opening an account and the overall initial setup process. Follow these steps to get started at tastytrade in just a few minutes!

1. Visit the tastytrade website or download the mobile app.

2. Click “Open an Account.”

3. Create a unique username and password to access your new account.

4. Click the link in the confirmation email to confirm your email address.

5. Fill out all the information requested on the new account form.

6. Wait on a confirmation email saying that your application has been reviewed and approved by tastytrade.

Platform Navigation

Given the time to look around the tastytrade website, investors or traders can quickly figure out where the critical tabs and menus are located, directing them quickly to the information they’re looking for. Under the main menu across the top of the screen, you’ll find the following choices:

• Pricing: Commissions and fee information.
• Trading Products: Find out what they offer, such as options, ETFs, stocks, commodities, indices, etc.
• Accounts: Choose the account you’d like, including individual or joint cash or margin accounts, tenants in shared accounts, standard retirement accounts, or SEP IRAs.
• Platforms: Learn how you can access tastytrade from your computer or mobile device, as well as the technology used and the in-platform features used for each iteration.
• Learn: Access educational resources in the learning center or check out platform demos that showcase how tastytrade can best be used during a trading session.

At the very top of the screen, you’ll see “Help Center.” This is where traders and investors can access troubleshooting pages and get help with opening and managing an account, depositing or withdrawing funds, trading tips, buying power, and margin accounts.

Performance

tastytrade is well-known for its reliability and speed, suited well for active traders who need to develop and execute quickly and efficiently. It might not be the easiest trading app to learn to use, but traders who know what they’re doing will find this app to be at the top of the heap regarding overall handling and nimble trade execution.

Final Thoughts: Is tastytrade Right For You?

If you’re an active trader with substantial experience in online investments, tastytrade will be a good option for your online trading and investment goals. However, it can be a decent choice for beginners due to the commission-free trades and available educational resources. There’s something here for everyone!