Does Tastyworks have Papertrading Accounts?

Tastyworks is hands down my favorite Options Trading brokerage; it has everything I need but nothing I don’t. But do they offer papertrading accounts?

Tastyworks doesn’t really offer papertrading accounts, however they do offer an even better alternative. With Tastyworks you can sign up here for an account and then apply for a special program where they’ll allow you to trade with THEIR money and keep up to $250 in profits you make, and if you lose out you don’t owe them a thing.

We’ll go over how to sign up for it, the exact rules, and an alternative if you decide you need a longer amount of time doing simulated trading as Tastyworks alternative can’t be used forever, or even months on end, but instead only for several days.

How Does Tastyworks Papertrading Alternative Work?

As mentioned above, you’ll first need to sign up here and fund your account with $2000 or more, I suppose simply to show you’re interested in using them, or so they have a place to pay your potential winnings to. I’m not really sure why, as they don’t say.

However, what they do say is that whatever you deposit will not be at risk when using their papertrading platform. We’ll go over the terms and conditions a little bit below.

Once you’ve signed up and funded your account you’ll need to contact Tastyworks through the email address that’ll be displayed on the page you’re directed to after you login (if you can’t find it contact us and we can send you the email address). Just let them know you’ve funded your account and would like to do the “trader challenge” before you dip your toes in with your own money and they’ll set you up with it.

So What's the Catch?

The “Catch” is that you cannot paper-trade before the short period of time given (outlined below in T&C), meaning you’ll be thrown into the deep end and if you don’t know how to swim you’ll drown. Thankfully all that’d mean is losing Tastyworks money rather than your own, however if you do bad you’ll miss out on the $250 winnings.

Beyond that, there’s no catch.

Well, you may have to keep any money you win you are supposed to keep it and the $2000 you deposited before in your account for a minimum of 180 days after you opened your account, or else you may have whatever you won kept by tastyworks (ie, you can take the $2000 out, but no winnings).

Creating Your Game-Plan for Your Trader Challenge:

So you only have one shot at this, which means you can take it in one of three ways:

  • Just Trade and Learn (Wing It)
  • Go in with a defined trading plan you’d actually use with your own money
  • Go in with a bogus trading plan where you don’t mind blowing up the account Tastyworks gave you

Personally I’d recommend one of the latter two, as winging it in trading rarely works out well (for you).

My recommendation, my trading plan, would be to go in and play earnings, as you only keep the winnings from the first two days of trading after you activate the Trader Challenge (there will be a confirmation when you login to the platform after signing up).

This is because I, or you in this case, wouldn’t have time to collect sufficient theta decay (Options Premium Decay) for long-term trades. I’d recommend only activating your 2 days during earnings season, preferably when you have a directional bias in a stock or one has extremely high IV Rank (Implied Volatility). Then make your bets on the first nights earnings, or the mornings earning reports, and then do the same the next day if you haven’t quite made $250 in profit.

The Challenge's Terms & Conditions

You can read the terms and conditions of the program here, although it’s essentially all legal-speak other than what I’ve already outlined above.

Basically as long as you can legally open an account with tastyworks and aren’t an employee of tastyworks you’re eligible. The only thing that you need to watch out for is the terms for them “clawing back” the potential winnings if you close your account with them or attempt to withdraw the $2000 you deposited, or your winnings, within 180days (6months) of opening your account.

Other Papertrading Accounts to Consider

If you don’t like the Tastyworks platform, which in my opinion is hands down the best and easiest to operate, then there are a few other companies that offer papertrading for Options.

The primary one is ThinkorSwim by TD Ameritrade, which is a very loved brokerage by many, however I strongly prefer Tastyworks both for trading fees (when you do trade live) and for the platform they give. ThinkorSwim is (in my opinion) cluttered and too “busy” with nonsense that’s not important to options trading, which is why I prefer tastyworks to them.

You could also consider Interactive Brokers, however their brokerage is harder to get approved for (You must be 21) and they have inactivity fees as well ($10-20/mo) if you don’t make enough trades on their platform every single month.