Investing » Broker Reviews » Tastyworks Broker Review 2021: best for trading futures and options
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Tastyworks Broker Review 2021: best for trading futures and options

Designed for the active trader and having the retail segment in mind, Tastyworks offers technology and know-how that defies the traditional brokerage.

We may receive compensation from companies that appear on this page. This may impact how and where products appear on a page (including, for example, the order in which they appear). It doesn’t affect our unbiased editors’ opinions. our opinions are our own.

Tastyworks Broker Review

From the founders of Thinkorswim, Tastyworks is a brokerage house that started from the foundation laid down by Tastytrade – the first live network of active retail options traders. Aiming at helping retail traders succeed, Tastyworks is a new kind of brokerage house.

Designed for the active trader and having the retail segment in mind, Tastyworks thinks of itself as a partner to the random road to successful trading. The broker offers technology and know-how that defies the regular, traditional brokerage industry.

Launched in 2017 on the backbone of Tastytrade, it is now trying to revolutionize the brokerage industry in the same way as Robinhood does – attracting millennials and generation X traders to the fascinating world of online investing.

Tastyworks broker review

On Tastyworks Secure Website

Account Options

– Stocks / Options / ETFs
– Futures / Future Options
– Margin Account

No Minimum Deposit

PROS

CONS

Overview

Together with Robinhood, Tastyworks is responsible for challenging the traditional brokerage industry. It is the reason why many well-established brokerages slashed their commissions one by one – competition by Tastyworks and alike forced them to do so or keep losing market share.

Tastyworks excels in the futures market, and it will probably expand its services moving forward. Futures are its strength, and it is normal to focus on this market, considering this is a brokerage house that started in 2017 only.

Before saying it is too young and inexperienced, consider the fact that management has a long history with financial markets, trading platforms, and other brokerage houses.

Overall a good broker with low pricing and specialized in the futures niche. If that is enough for your trading needs, then look no further.

 Tastyworks Trading Products

Traders that want to know the full range of the products offered by Tastyworks will have a hard time finding the exact composition of this brokerage offering.

One thing, though, becomes clear right from the start – this is a broker that excels in futures trading, offering a large range of futures products to its clients.

ProductDescription
Stocks and ETFsUnlimited shares trading at zero commission
Options on stocks and ETFsTrade options on stocks and ETFs with $1/contract and $10 max per leg
FuturesTrade futures starting with $1.25/contract
Options on FuturesTrade options on futures starting with $2.5/contract
Futures e-Microe-Micro futures starting with $0.85/contract
Smalls futuresSmall futures trading from $0.25

Commissions and Fees

Tastyworks belongs to a new generation of brokerage houses that aims at revolutionizing the access to financial markets. To do that, it means offering access to financial products at lower costs – thus, the volume rises as more retail traders open an account.

To attract more customers, the pricing structure is the number one tool to use. At this chapter, Tastyworks did a great job lowering its commissions and fees when compared with the competition, albeit some hidden fees still exist.

On top of the costs listed in the table above, some other fees apply when trading with Tastyworks. For instance, all prices come with an *, pointing to additional exchange, clearing and regulatory fees to opening and closing trades.

In other words, that is not the total cost of trading, but only the Tastyworks markup. However, for the end-user, that matters little as the entire trading cost is the one that influences the bottom line.

On stock options, there is an additional $0.1 as a clearing fee for each trade. Also, on futures, there is an additional $0.30/trade, while on smalls futures, there is a $0.05. To these, the trader must consider the exchange fees plus NFA fees.

Moreover, there is a huge list of banking fees and other trade-related fees, even a section with miscellaneous fees, like overnight domestic or international mail. All in all, a complicated way to present the commissions and fees structures, if one bothers to look at all the costs involved.

Compared with other brokerage houses, though, Tastyworks has overall low pricing, albeit one needs to sum up all the additional costs for the comparison with other brokers to be valid.

A comparison of 1 lot on 1 put/call (basically 2 contracts) with Tastyworks costs only $1.20, while Schwab charges $1.3 and Interactive Brokers $2. As for the margin rates, Tastyworks charges 8% on its lowest borrowing interval ($0-$24999) and only $5 on balances higher than one million dollars. 

Account Types

At TastyWorks, there is an account type for everyone. Moreover, the broker comes up with an innovative solution called “The Works”, where it groups some of its most important features in an attractive package for the active retail trader. Here are some of its characteristics:

  • Access to all available products – futures, stocks, options on futures, covered and uncovered options, options spreads
  • All from an individual margin account
  • Fee to use any options trading strategy available
  • For suitable accounts, portfolio margin available

Besides “The Works”, arguable the most popular option among active retail traders, there is always the possibility to open a standard trading account – margin or cash account. The only difference between the two is that the cash account must have sufficient capital to cover the trades’ full purchase price.

Another possibility is to open a joint account, held by two individuals – Tenants in Common (TIC) or With Rights of Survivorship (WROS). If interested in a retirement account, all types of IRA are available at Tastyworks – Traditional, ROTH, SEP.

Any legally established US entity can open a corporate account with Tastyworks – C Corp, S Corp, LLC, or Partnership. Also, a trust account can also be open, albeit a trusted certificate must be provided before the opening.

International customers (non-US) can also open an account with Tastyworks – either a margin, portfolio, or cash account.

Like any other broker, there are pros & cons for investors/traders. Here are the main benefits and drawbacks you should know before applying:

Benefits

The strongest point of Tastyworks, albeit it could do some more by reducing its stuffing “other” commissions and fees structure. To attract the retail crowd, the price comes first, and services later.

At this chapter (price), Tastyworks did a great job by reducing them below most of its competitors’ offering.

The Works – a flexible package for the retail trader with ultra-light opening process. It takes between 3-5 minutes to complete the application, providing all the documentation is readily available (email address, SSN, mailing address, full name).

This is an interesting feature presented by Tastyworks. What it does is it lets traders to see what other active traders are up to – providing ideas or confirmation of their own bias.

If you want, it gives an incentive to trade when hesitating about the market direction and in need of confirmation. However, it comes with the inherent risk of following the crowd, as the crowds trading financial markets do not have a good track record.

Drawbacks

Before opening a live trading account, any interested party would like to know what the products are offered. Tastyworks only presents the product categories, without offering much more info regarding the number of markets in each category.

For example, it says that it offers stocks and ETFs, but how many markets, local ones, or also international ones, how many ETFs, and so on. This remains valid for all other products – such ambiguity should be avoided in the first place.

Let us talk about stock options on Tastyworks. The pricing starts from $1/contract, but traders should be aware that all stock options trades are subject to a clearing fee of $0.10.

Therefore, instead of listing $1.1 as the cost of trading, Tastyworks chooses to present its fee and the clearinghouse's fee separately. The same is valid with other products part of the pricing list.

The only feature that comes close to trading education is the Help Center, but it looks more like a place where to answer questions regarding how to do business with the broker.

Coupled with the poor design choice, it is literally impossible to use so as to learn something useful to your trading.

Investors wanted to access the large mutual funds market will have a negative surprise. Tastyworks does not go into that area, but focuses on only a few markets, with futures being its strength.

This can act both as a blessing and a curse for investors – specialization usually leads to lower commissions and fees structure. While true in this case, it comes at the expense of cutting access to important financial markets, thus limiting investors' diversification options.

Tastyworks does not offer a demo account to test its product offering and platform. Considering the management's experience (ex-thinkorswim), and the company's mission to transform the trading experience, the lack of demo accounts comes as a surprise.

Yes, one can download the platform for desktop, but cannot run it unless there is an existing live account to login to.

Poor color choice for the help center page – dark grey and red on light-grey background. On top of it, the writing (only on that page!) has a small font, making it impossible to read unless zooming in to see the details.

That is a poor decision from Tastyworks as otherwise, all the website pages have a friendly look, leading to the impression that the help center was intentionally designed like this.

  • Trading Platforms

Tastyworks offers an in-house built trading platform praised for its security and speed of execution. Among other benefits, it provides a curve analysis that gives traders a visual way to set up trades. Also, it offers a quick roll feature to better see and handle the upcoming expirations and to handle the entire expiration cycle in a more efficient way.

Moreover, the quick order adjustment feature allows traders to cancel, duplicate, invert, or cancel orders. Also, one can quickly double down on a trade.

Three versions of the Tastyworks trading platform exist:

1. Desktop

  • Designed for high-volume traders, it features advanced multi-account support
  • Needs a minimum RAM 2GB to run
  • Complete toolset

2. Browser

  • Perfect for visualizing trades and checking the trading history
  • Quick access, albeit it requires a stable Internet connection
  • Suitable for traders preferring light laptops with little space for downloading the desktop version

3. Mobile

  • On-the-go trading
  • Easy to close or roll positions
  • Works on Apple and Android phones
  • Customer Service

The customer service is in-built in the trading platform – more precisely, into the desktop version of the trading platform.

For the rest of the issues or questions, there is a message box to use, where one can inquire the brokerage's representatives and also a small FAQ base that deals with the answers to the most common questions one might have.

Trading Education

No free trading education available at Tastyworks. The one thing we can call education comes in the form of the ability to watch other traders during their trading activity – once you have a functioning live account. Called “Inspiration”, it is a feature designed to get ideas for trading – a good feature, but not quite trading education.

The Help Center provides some tools to fit this category, but everything in there is so poorly presented that it is best to disregard it altogether.

Application Process

Step 1: Visit the Tastyworks broker homepage, and click on “Open an account”.

2_Tasty works broker_Account type

Step 2: Next, indicate the account type. It takes you to the “Trader” section, where you can fill in your contact information, such as your names, city, address, zip code, etc.

3_Tasty works broker_Trader's information 4_Tasty works broker_Access

Step 3: Next, confirm your identity and enable two-factor authentication.

5_Tasty works broker_Security 6_Tasty works broker_Document upload

Step 4: Then upload documents of your ID and SSN.

7_Tasty works broker_Sign and submit

Step 5: Finally, read through the agreement and then click on “Sign and submit application” to complete your registration.

Great Alternative Brokers

Here are our 3 choices of brokers which can use as a great alternative to Tastyworks: 

SoFi invest is NOT just another brokerage house into the niche of fractional shares investing. Instead, it is a non-bank extending its services into the investing world. 

SoFi is a good broker for those that do not afford trading with a regular, traditional investing house. High transaction costs and other barriers to entry (e.g., high minimum initial deposit) keep many wannabe investors aside – investors that just cannot afford the services but are willing to take a chance.

For such investors, SoFi is the ideal choice. No commissions or fees for transactions, easy-to-understand products (crypto, stocks, ETFs), one account to trade them all from, a friendly app, and the ability to start investing with as little as $1.

On the other hand, it signals a lack of expertise. It only shows how easy it is to enter the brokerage industry should one has the funds to meet all the compliance required by the SEC. And SoFi does have the funds from the other businesses that generate more cash flow.

Webull also belongs to the new generation of brokerage houses challenging the traditional houses for clients. The company’s main tactic to compete is to attract many small retail traders, and by increasing volume, they are able to successfully compete despite only charging smaller fees. 

The COVID-19 pandemic has provided the perfect example to understand this type of brokerage house. The $600 weekly checks offered by the government were put to work in many cases. There was a massive number of new retail trading accounts, but which brokers benefited from this new generation of traders? Since brokers like Webull accepted any deposit, they typically attracted clients that would have struggled to meet the minimum deposits required by traditional investment houses. This phenomenon was so large that the financial media often cited it as the primary reason the stock market continued to advance during the pandemic. 

Traditional investment houses found these new brokers surprising, and as the competition intensified, they also lowered their commission to try to compete. 

However, Webull continues to be highly attractive to new investors since it has no contract fees, and there is no commission for trading options. This is obviously far less than even the highly competitive Merril Edge that not charges $0.75 for contract fees and charges $6.95 options commission. Until the traditional houses learn that the new generation of traders operates in this way, Webull is likely to dominate by offering cheaper rates to gain exposure to the same markets. 

SoFi invest is NOT just another brokerage house into the niche of fractional shares investing. Instead, it is a non-bank extending its services into the investing world. 

SoFi is a good broker for those that do not afford trading with a regular, traditional investing house. High transaction costs and other barriers to entry (e.g., high minimum initial deposit) keep many wannabe investors aside – investors that just cannot afford the services but are willing to take a chance.

For such investors, SoFi is the ideal choice. No commissions or fees for transactions, easy-to-understand products (crypto, stocks, ETFs), one account to trade them all from, a friendly app, and the ability to start investing with as little as $1.

On the other hand, it signals a lack of expertise. It only shows how easy it is to enter the brokerage industry should one has the funds to meet all the compliance required by the SEC. And SoFi does have the funds from the other businesses that generate more cash flow.

Tastyworks is Best For..

Trading futures and options – few brokers go that deep into the futures market by offering access to so many markets like Tastyworks does (equity index futures, interest rate futures, foreign currency futures, grain futures, metals futures, energy futures). Traders interested in a low-cost option to access financial markets may find the Tastyworks offer interesting.

Also, combining stocks, options, and futures provides the ability to diversify and hedge the portfolio from the same trading account, which is not something you can do at all brokerage houses.

Broker Reviews Methodology

When it comes to working with investors, we want to make sure that you’re getting unbiased reviews and we want to make sure that you can get a good idea of what to expect from online brokers. We also want to make sure that whether you’re new to investing or you’ve been at it for a while you can get what you want. Here are the main things we focus: 

  • Investment Options – What type of options are available and what sort of variety? Are you able to work in ETFs, mutual funds, options, futures and more?
  • Technology – What does the system allow you to do when it comes to software and applications? Can you get data exportation, email updates and even currency support?
  • Fees – What are the costs associated with the service
  • Account Options – What types of products and features are actually available and how can you get the best variety? Where can you get good banking services like loans, checking and more? Can you do all of it in one location or are you going to have to go with different options and locations?
  • Customer Service – Do you get 24/7 responses and support? Are you going to have an easy time getting in touch with a real person for help?
  • Banking products – We look at things like savings accounts, checking accounts, money market accounts and CDs related to things like fees and APY. We also make sure that we’re looking at the best APY without having to worry about qualifications and expensive features. We don’t want to have a difficult usability rating or difficult to use mobile apps, ATMs or restrictions. We want to get it as easy for you as possible.