Tastyworks Review

Order Types

Tastyworks is a great broker, but it has a few shortcomings. The order system is great, but it’s not as intuitive as it could be for beginners. The conditional orders are available only on the desktop version, which may be problematic for some traders. Also, the default tax lot when closing a position is first-in, first-out (FIFO).

Here’s a list of order types that tastyworks enables:

• Limit
• Market
• Stop limit
• Stop market
• Bracket orders
• Good til cancelled
• Good til date
• Conditional orders (OCO, OTO)

Trading Technology

Tastyworks provides its clients with a highly-targeted and intelligent order routing system that uses a proprietary smart order routing algorithm to send orders to approved execution partners.

The firm has a focus on order fill quality and price improvement by monitoring trade quality statistics and adjusting the percentage of orders routed to each execution partner accordingly.

The net price improvement is $0.01 per share and $0.05 per option contract.

Unlike some other online brokers, tastyworks clients cannot backtest strategies or automate trading strategies directly on the platform. They do have an external site, www.tastytrade.com/backtest, that fills that function instead. The company has stated that APIs to support this functionality will be soon available.

➔ Open your free trading account with tastyworks now

(Risk warning: 75.59% of retail CFD accounts lose)

Costs

The brokerage firm is similar to most online brokerage firms that joined the race to zero fees. However, it has a unique competitive advantage in how options contracts are priced. For instance, the base fee to open an options position is $1, and it is capped at $10 per leg. Moreover, there is no cost to close option positions. Tastyworks’ unique pricing model is a value add for derivatives traders as it is the most cost efficient option in the market.

• Stock and ETF trades incur no commission, regardless of the amount of shares.
• Base fees to open an options contract is $1, capped at $10 per leg. No fees to close options positions.
• $10 commission for a single leg order of 20 puts/calls
• Future contracts cost $2.50 per contract to open and close positions.
• Micro futures are $1.50 per contract to open and close positions.
• It costs 1% of cryptocurrency purchase to open positions and 1% of cryptocurrency sale to close positions (capped at $10 per order ticket)
• Margin interest on $10,000 balance is 11%; $100,000 balance is 9.5%.
• $25 domestic wire fee; $45 international wire fee
• Sending a check domestically costs $5, while sending a check internationally costs $10.
• Account transfer fee is $75.
• $50 voluntary reorganization fee
• Exercise and assignment fee is $5
• No fee for inactivity or account closure
• No fee to access the platform
• No fees for ACH deposits and withdrawals

➔ Open your free trading account with tastyworks now

(Risk warning: 75.59% of retail CFD accounts lose)

How This Broker Makes Money From You and for You

In the past, brokers made money from you by charging you a commission on every trade. This meant that as a trader, you were charged every time you bought or sold an equity. However, in recent years, there has been a shift in the brokerage industry toward fee compression.

This essentially means that most online brokers have cut commissions on equity trades to help them compete with each other and offer more competitive pricing for their customers. As a result of this change, tastyworks pricing structure is unique and more cost efficient than its competitors.

Since the methods in which brokers make money from you are less transparent now than before, we’ve highlighted some ways they make money for you:

• Interest on cash balances:You can request interest on cash held in your account, and the rate is 0.01%. The cash isn’t automatically swept into a money market fund, but it can be set up. Like other brokers, tastyworks makes money from the difference between what you are paid on your idle cash and what they can earn on customer cash balances.
• Payment for order flow: Tastyworks accepts payment for order flow on equity and options orders. On average, it accepts $0.00141 per share for equities, and $0.50 per option contract. This compensation is below average for equities and around the industry average on options.
• Portfolio margining:To initially apply for portfolio margining, you must have a margin account with tastyworks’ highest trading level, The Works, and have $175,000 in account equity to allow for a cushion from the maintenance minimum of $150,000 after enabling portfolio margining. The goal of portfolio margining is to set margin requirements that reflect net risk, which may allow clients to benefit from lower margin requirements and more effective use of capital. In general, it is ideal for investors who trade derivatives that offset the risk inherent in their equity positions.
• Price improvement:tastyworks’ smart order router generates an estimated net price improvement of $0.01 per share and $0.05 per contract on options orders.

Account and Research Amenities

TastyWorks is a great brokerage for traders who are looking for a platform that can be used with a single-click. The tastyworks platform was built in-house using proprietary technology. It offers limited portfolio analysis tools and no third-party research resources. Since tastyworks is built primarily for frequent trading of derivatives, most of its research amenities are designed to help you find and place trades for options, futures, or futures options. Although the platform doesn’t have a bond or mutual fund screening tool, the everyday options trader will be more than satisfied with the resources made available.

Stock and ETF Screener

Tastyworks gives you the ability to set up a watchlist of stocks and ETFs, but keep in mind that equity analysis is not a focal point for the tastyworks platform. By default, tastyworks has quite a few different preset watchlists to choose from, and they all serve a different purpose. Moreover, the ordering and filtering functionality is what makes the watchlists valuable. For example, you could filter for the biggest move, bid/ask prices, liquidity, volume, IV rank (implied volatility), and more.

Even though you’re able to screen for volatility and other key metrics—as well as look at technical analysis—the focus is primarily on price trends as opposed to buy and hold metrics that other platforms may use.

Mutual Fund Screener

Tastyworks doesn’t provide a mutual fund screener.

However, they do offer a lot of other ways to narrow down the funds you want to invest in.

You can use their “fund search” function to find funds that meet specific criteria, like “low expense ratio” or “low turnover rate.” You can also use their list of recommended funds based on your risk tolerance and investment goal.

If you want more access to funds, you can open up an account at Interactive Brokers instead and use their screener there.

Options Screener

When it comes to analyzing options trades, tastyworks is the clear winner.

Most of your screening will be performed using watchlists that are customizable to your trading needs. The platform is optimized for complex, multi-leg options trades such as iron condors and vertical spreads.

Fixed Income Screeners

Tastyworks does not provide a fixed-income screener.

Tastyworks is an online trading platform that allows investors to invest in stocks, options, and futures. The platform offers its users real-time data on securities, research tools, and other features designed to help them make informed decisions about their investments.

Charting

The TastyWorks platform is a comprehensive and powerful tool that includes a wide variety of data and analysis tools. Its options-focused charting capabilities are especially useful for traders who want to understand their risk profile and probability of making a profit on multiple positions.

Even though there is limited fundamental data for stocks, there are plenty of useful indicators for options, like the greeks, and implied volatility(IV), which is tastyworks’ proprietary IV rank, or the correlation matrix with stocks and indices. In addition, it is packed with options-focused charting that helps you understand the probability of making a profit. For instance, if you have multiple positions on a particular stock, you can view your combined risk profile on the underlying asset. This is a tremendously valuable tool for those serious about options trading.

➔ Open your free trading account with tastyworks now

(Risk warning: 75.59% of retail CFD accounts lose)

Tools and Calculators

Tastyworks is a broker that specializes in options trading. It has a wide range of tools and calculators that are focused on option trading, and they seek to measure volatility as well as calculate the probability of profit of a particular options trading strategy.

Trading Idea Generator

Tastytrade is a show that provides hours of free content focused on research and active trading. All of the trades from the show personalities are posted to the “follow page” on the platform where you can filter, sort and select underlyings for which to see trades for. The trades are posted live in real time so you’ll have the ability to mimic trades from your favorite hosts. The follow trade feature also has tv celebrities and other personalities to choose from.

The Cherry Picks email will provide you with insight and context around certain products and markets and help uncover potential trade opportunities. The Cherry Bomb email will provide more detailed information about how certain stocks or ETFs performed during an entire day or week of trading.

Third-party research

Tastyworks does not provide third-party research.

Tastyworks is a brokerage firm, which means that it provides its clients with access to the trading platform and has no responsibility for the decision-making process or any outcomes of their trades. The company also does not provide any kind of advice or recommendations on how to trade, or what options to select within your portfolio.

Fractional Dividend Reinvestment Program (DRIP)

Tastyworks customers can specify dividend reinvestment for dividend-paying stocks and the dividend will purchase fractional shares rather than paying cash into the account.

This is an excellent feature for investors who want to build a highly diversified portfolio and can only afford to purchase a small amount of each stock.

Cash Management

TastyWorks is a brokerage firm that offers a wide range of investment options. They don’t offer an automatic cash sweep program but you can request one be set up with 0.01% on idle funds.

SRI/ESG Research Amenities

TastyWorks doesn’t provide socially responsible investing (SRI) or environmental, social, and governance (ESG) research amenities.

TastyWorks is an online brokerage that provides stock trading services for individual investors. It offers a variety of investment products, including stocks, ETFs, options, and mutual funds. The company also provides research on various stocks using its proprietary platform.

Portfolio Analysis

Tastyworks offers a slew of features and tools that make it easy to manage your portfolio. With real-time portfolio statistics, such as probability of profit, delta, theta, liquidity, and buying power displayed on the desktop application, you can get an instant snapshot of your market positions.

In addition to these real-time statistics, you can create a free account at Quiet Foundation, a registered investment advisor (RIA) under the tastyworks/tastytrade umbrella to gain access to in-depth performance reports and analysis.

Tastyworks reports account balances, margin and buying power in real time. However, you won’t be able to measure the tax implications of future trades. Since tastyworks is a newer player in the brokerage industry, you can expect it to continue making improvements to their platform.

Education

Tastyworks is a trading platform that offers investors access to professional traders who have been in the industry for years. It also has a learning hub, tastytrade, that focuses on teaching you how to trade.

Tastytrade is a content network and free learning center that runs in tandem with tastyworks. Tastytrade gives you actionable information rooted in research and real world experience that can help you grow your knowledge around investing. There is a lot of free, stats-based options content that traders can greatly benefit from.

Prior to the pandemic, tastytrade offered live in person trading education events, most which have transitioned to digital events and webinars. Although tastyworks hasn’t yet developed paper trading functionality, tastytrade supplements its platform with tons of educational resources like blogs, videos, and an investing glossary. Cherry Picks, its weekly research report, and Cherry Bomb, its daily email serve as additional resources for market news and investing education.

➔ Open your free trading account with tastyworks now

(Risk warning: 75.59% of retail CFD accounts lose)

Customer Service

Tasty Works has a customer service team that is always available to help you. We understand that sometimes you may need assistance with a specific issue, and we’re here to help!

Our customer service team offers 24/7 phone support, as well as email support. If you prefer to use live chat, we also have an online chat feature on the Tasty Works website! Just click on the “Chat Now” button and one of our agents will be happy to assist you.

Security and Reliability

• Two-factor authentication is available via SMS.
• The mobile apps have fingerprint and face recognition
• Excess Securities Investor Protection Corporation (SIPC) coverage is provided by Lloyd’s of London up to an aggregate of $600 million, subject to maximum limits of $150 million for any one customer’s securities and $2.15 million for any one customer’s cash.3
• No major security breaches reported.
• Tastyworks has not experienced any outages in the last year.

➔ Open your free trading account with tastyworks now

(Risk warning: 75.59% of retail CFD accounts lose)

Transparency

Tastyworks is a brokerage firm that offers a transparent and easy-to-understand pricing structure. The broker has a webpage dedicated to fees and commission that is easy to find, read, and understand. It also highlights costs associated with brokerage fees as well as for margin trading and interest rates.

Available Account Types

Tastyworks has all the commonly used account types, including:

• Individual and joint taxable
• Traditional individual retirement account (IRA)
• Roth IRA
• Simplified employee pension (SEP) IRA
• Inherited IRA (Roth and traditional)
• Corporate
• Trust
• International (non-U.S.)

Final Verdict

Tasty Works is a great option for people who want to learn how to trade Forex. The platform is easy to use, the customer service team is responsive and helpful, and the mobile app is excellent.

However, there are some downsides to this broker. The commission fees are high compared to other brokers in the industry, and there aren’t many educational resources available on their website.

Overall, Tasty Works is a good choice if you’re looking for an easy-to-use platform with a responsive customer service department who will help you out when you need it most!