Tastyworks Review 2022 - Exceptional Interface, Low Fees
Tastyworks is our #1 pick for options and derivatives traders as their interface and pricing is better than any other brokerage for such folks — however Tastyworks isn’t right for everyone — for long-term dividend growth portfolio investors Tastyworks doesn’t have many advantages.
Below we’ll go in deep detail on the specifics of Tastyworks so you can make an informed decision yourself, but we’d like to start off just by saying we’ve used Tastyworks since 2017 on and off, and while we no longer use them as our primary brokerage they’re a fantastic choice for some folks as we’ll go into below.
With that being said, we believe Tastyworks is the best brokerage for active traders, or those who want to invest in Options, Futures, or Derivatives of some type, particularly if they want a margin account and have an account value between $2,000 and $150,000+.
If you have less than $2,000 while you can sign up to tastyworks and use it, and it be just as good as other brokerages like TdAmeritrade, you don’t experience many real benefits vs them until you have at least a few thousand dollars, and don’t experience large benefits until you have $20,000 – $25,000 to invest.
There’s two areas where Tastyworks is not so good in — they’re not good for investing in international non-US equities that aren’t US-listed (Interactive Brokers is better for this), and dividend-growth investors who don’t care to do options trading, as Tastyworks lacks any real unique features for such investors.
Table of Contents
Tastyworks Unique Features:
Tastyworks has many unique features that makes them stand out amongst competitors, but most of them simply revolve around the focus that Tastyworks brings to the table — which is to make options, derivatives, futures, and trading simpler, approachable, efficient, and overall more accessible for average folks — they don’t try to get every customer under the sun, but instead focus on their area of competence.
Keep in mind as a result Tastyworks isn’t the best brokerage for everybody or even overall — if you are a high-dividend focused passive income investor tastyworks doesn’t really have any benefits vs other platforms — however if you are into options trading, or other derivatives, they’re a dream.
Easy Permissions Approval
If you are familiar with options trading, or trading on Margin, you’d know how difficult it can be to get an account approved at some brokerages — often brokers will want you to send them evidence of substantially higher than regulatorily required liquid networth to get approved, as well as want evidence (often on their platform) of your experience in the markets.
Tastyworks doesn’t do such nonsense — they follow the letter of the law (regulations) and not too much more — if you somewhat know what you’re getting yourself into and have the legally required minimums, maybe a tad bit higher (20%~), they’ll approve you for options trading or margin permissions.
In practice this looks like $2000+ NAV you can get a margin account, $25,000-30,000 you can get access to everything with unlimited permissions, day trades, etc, and around $140,000 you can get access to portfolio margin if you want it.
Unmatched Options Trading Interface
It could be part due to largely ‘growing up with tastyworks’ as I first seriously traded options with them, however in my opinion, and seemingly most peoples opinion, Tastyworks has hands-down the best interface for options trading. It’s clear – it’s easy to navigate – it’s aesthetic, it’s not too complicated, they have visualization charts if you really want them, and they have built-in automatic roll features and just about everything you could want in an options trading interface.
They have similar interfaces for futures trading and the like, making it easily the best interface for traders and derivatives investors.
The only downside to tastyworks interface is due to focusing on ‘institutional’ and ‘sophisticated’ traders, rather than buy-and-hold folks, there’s no portfolio-wide visualizations or performance charts to view, but rather just a +/- NAV figure for your portfolio, and that’s it — if you want more visualizations, beyond individual trades, you’ll have to use a platform like Personal Capital or Kubera, or a home-made spreadsheet.
Follow-Feed (Trading Ideas)
One Unique feature Tastyworks has that no other platform has is a live trading feed of what tastyworks/tastytrade staff and tradedesk workers are doing in the company and personal portfolios they manage — this makes it easy to get ideas and pick up high-IV underlinings that may have been unknown to you, that present good opportunities that you otherwise wouldn’t have came across.
Keep in mind it’s not meant to be used as a copy-trader, meaning you likely shouldn’t copy all their trades and expect good performance — this isn’t a good idea for numerous reasons, the main being they have many long-term positions and many of the trades are merely hedges to those existing positions, or rollovers of them, and historically when we backtested their trades the performance was, to say the least, not very impressive.
Fantastic Educational Resources
I’m not quite sure why other reviews don’t mention this, maybe because they haven’t used tastyworks as much as we have and thus aren’t aware of their educational features, but tastyworks has a subsidiary called tastytrade which is built into the platform, as well as is a standalone website, that offers 100% free options trading education from casual talkshows and walking people through trades the team is considering in their own portfolios to in-dept free courses about all the specifics that need to be considered or known about options and derivatives trading.
There’s no better free resource for this than tastyworks/tastytrade, and they teach it well — the only area where the courses/educational material is lacking is they teach the facts, but not the emotions and tragedy that can come with options/derivatives, meaning they teach strategies, terminology, and fundamentals, but don’t really teach how to truly build your own strategy and grasp the nuances — but in all fairness we’ve never encountered educational material that does teach that.
Tastyworks Biggest Pros & Cons:
While we’ve mentioned some features and benefits (pros) of Tastyworks we didn’t cover them all — nor have we touched on the cons, so we’ll go over them briefly now starting with the Pros of Tastyworks:
- Highly Regulated & Transparent
- Low Fees Especially for Certain Investor-Types
- Simple and Straightforward to Use
- Easy Account Approval & Permissions Approval
- Fantastic Free Educational Resources
- Very Sensible Handling of Margin Calls/Liqudiations
However there are some cons compared to other platforms like Interactive Brokers, such as Tastyworks:
- Has normal to high margin financing rates
- Doesn’t offer portfolio-wide visualization
- Lacks International-Market Connections (hard to trade non-US assets/stocks/options)
- Lacks Direct Bond Investing Capability (not relevant for most folks)
- Doesn’t stop you from making horrible decisions (could be a pro as well)
Tastyworks (Baseline) Pricing Structure and Fees:
Tastyworks has various pricing schedules/structures depending on the client and activity, but below are the most relevant ones — you can view baseline rates on their fees page, however keep in mind you can negotiate all the below mentioned fees if you have a substantial account size and/or are an active trader who has $1000s in commission fees annually — however Tastyworks is already very low for their fees, so don’t expect much of a discount if you negotiate with them.
Above you can see the baseline fees that are relevant to most folks — these fees are largely standard industry practice other than two elements — namely that Tastyworks doesn’t; charge to close most positions, meaning for options traders they’ll generally save around 30% to 50% in commissions as a baseline compared to other platforms, and tastyworks caps options commissions at $10 per leg, which can save traders HUGE amounts in commissions if they are engaged in certain options trading strategies like ‘lotto’ selling or generally have a large account size.
To put it simply Options and derivatives are cheapest via Tastyworks — their fees are fantastic — and the only fees that aren’t particularly good are their crypto fees, which are standard-industry fees (1% per side) so it’s not a real issue in our view.
There is a downside to Tastyworks fees though, while the above are cheaper than all other good-quality exchanges they have higher margin rates:
Above are the current margin rates at the time of writing, which are quite industry-standard, meaning platforms like TdAmeritrade charge similar margin rates, however they are significantly higher than Interactive Brokers, particularly if you have a smaller account, so if you have a portfolio margin account rather than a regular margin account or cash account, and you like to use lots of margin, then Tastyworks might not tbe the best choice for you fee wise — instead Interactive Brokers may be better.
With that being said 95% of folks who trade options, retail investors, do not use enough margin to make Interactive Brokers better than Tastyworks fees wise, as the lower trading fees of Tastyworks generally saves more than the margin savings Interactive Brokers would provide. If you are taking out $100,000+ in margin then Interactive Brokers likely would be the better choice fee-wise.
Tastyworks vs Competitors:
When comparing Tastyworks to other brokerages there’s generally only a few things to look out for — fees, unique features, and how ‘trusting’ they are of their clients and thus how willing they are to allow you to trade options/futures, with traditional reg-T margin, and how willing they are to approve portfolio-margin accounts.
To summarize the below before we get into direct comparisons — Tastyworks is the most ‘trusting’ brokerage that’s legitimate and trustworthy and will give just about anyone margin trading privileges if they meet the regulatory minimums and have some level of competency, while most other brokerages give people, especially those below 30~, a hard time with margin and portfolio margin approval, as well as higher-level (naked) options approval. Tastyworks doesn’t cause issues with that.
In terms of fees all the platforms fees are quite similar, tastyworks really has a benefit for large account sizes and folks with portfolio margin, but overall has slightly lower fees than most other brokerages.
Lastly in terms of unique features, the main other differentiator, tastyworks wins hands down in options/derivative trading features, but loses out to M1 Finance and Titan Invest in terms of semi-managed/managed portfolios (as tastyworks is entirely self-managed), and also loses out to Interactive brokers in terms of international-market access. Otherwise Tastyworks has comparable features (+ additional ones) to most traditional brokerages like Fidelity.
Tastyworks vs ThinkorSwim (TdAmeritrade)
Tastyworks and ThinkorSwim/TdAmeritrade have nearly identical features with a few exceptions — namely TdAmeritrade has decent ability to invest in international markets, while tastyworks has quite honestly poor support for international investing, and TdAmeritrade better access to direct Bond Investments, while Tastyworks has a better interface for options traders, slightly lower fees, and WAY easier options trading permission (and margin/portfolio margin) approval.
Ultimately if someone was leaning towards TdAmeritrade over Tastyworks we’d say they’d likely be better off with Interactive Brokers, as they have the benefits of TdAmeritrade while also having some benefits of Tastyworks (but with the same not-so-good interface of TdAmeritrade).
Tastyworks vs Fidelity
If we’re being honest we don’t see a benefit to Fidelity over Tastyworks — they allow (Fidelity) easier access to bond markets directly (rather than via ETFs/funds) but that is not something most people care for or have the capital to engage in — otherwise there’s no real benefits. In our opinion tastyworks interface is better, their fees are lower, their support is more knowledgable, they approve permissions quicker and with less hassle, and have similar access to markets.
Tastyworks vs Interactive Brokers
This is the real comparison we think matters — and is a tough one to pick between — generally we’d say for accounts <$120,000 in value, that focus on options investing, are better off with tastyworks, while portfolios larger than that or that have a more ‘balanced’ strategy, or that include international markets/investments, would be better off with Interactive brokers.
In terms of fees Interactive brokers has better margin rates, however slightly higher fees for trades — this means it’ll be hard to really figure out which is better or lower for you in particular, however in practice we’ve found if you take out >100k in margin debt, generally this means having a portfolio margin account and portfolio worth $100k+ already, then Interactive brokers will offer lower fees due to the lower margin expenses — with one exception, and that’s if you sell huge numbers of single-legged option contracts, due to tastyworks $10 single-leg options fee cap.
In terms of features Tastyworks has the better interface, while as mentioned already interactive brokers has far far superior access to international markets and investments — as well as access to bonds directly, and a lot of other features regular brokers like TdAmeritrade offer.
Both Tastyworks and Interactive brokers allow you to get approved relatively easily — if you meet the regulatory minimums — for trading permissions, however Tastyworks is slightly more relaxed in this regard and interactive brokers will generally want to see some sort of real history of successful investing.
Tastywors vs Robinhood
This shouldn’t be a comparison worth considering — Robinhood is not fit for serious investors or traders, has horrible execution (and thus more or less hidden fees that are higher than tastyworks), has a borderline unusable interface for trading options in any serious capacity.
If you are going to take investing, especially trading options or hedging your portfolio, seriously then use a serious brokerage, not a memetic app with 0 customer service, poor execution, and a bad history of limiting customer withdrawals, trades, purchases, sales, and general market access.
Our Experience Using Tastyworks:
We started using Tastyworks in 2017 and used them as our primary broker until 2020, followed by us trying out many brokerages and then settling on Interactive Brokers for our primary investment portfolios in 2022 — however that’s not because Tastyworks did anything wrong, it’s just we have begun to invest in more foreign markets that tastyworks doesn’t support, as well as taking on increasingly higher margin debts.
With that being said, during our time with Tastyworks and continuing to use them for testing/vetting purposes we never really had any problems with Tastyworks — the support was the best we have ever experienced at a brokerage with truly knowledgable staff, who traded options and understood what was being asked, and overall fantastic communication.
Tastyworks has fantastic execution in our opinion, the best of any brokerage — although Interactive Brokers and most big brokers also have good execution — and Tastyworks also has our favourite, even to this day, interface for options/futures trading and portfolio management in general. We simply don’t use them as our primary broker now due to the lack of international market availability.
Our Experience with Margin Calls at Tastyworks
While we don’t have much else to say about our general experience with tastyworks, which was good and suitable but overall quite standard, we do feel like we should talk about the margin call process. Obviously it’s not something you ever want to have happen, and it’s an event that can happen and result in immediate liquidation without consultation — however that’s not the experience we had when we were margin called.
When we got a margin call through tastyworks we recived multiple warning emails, seemingly automated, then a manual email specifying more or less suggestions to get the account in a safer position, all of which we largely ignored — before we received a call from their trading desk from a tastyworks staff member that had reviewed our account and trades and went on to discuss options and fixes to our prediciment.
They solutions ranged from hedging with futures before the market opened, to letting the positions run and risk liqudiation — they gave us the choice and were very clear about where they’ll be forced to step in and what risks needed to be considered, which I applaud them for — there’s really no better way they could have handled the situation in our view, from our experience with other platforms and Tastyworks, regarding margin calls.
Final Thoughts, Conclusions, & Warnings:
As we’ve covered we believe Tastyworks is a good option, particularly for options traders and those who want to trade derivatives, potentially with moderate leverage/margin, and want a good interface and platform with low fees. It’s a fantastic choice for some people as we’ve covered above, however as we’ve also mentioned it’s not the right choice for everyone.
If you aren’t sure if it’s the right brokerage for you feel free to contact us through our contact page and we can give our thoughts on your situation; just be sure to send details on how you plan to invest and your strategy so we understand a rough idea of what you may be looking for in a brokerage.
With that being said there’s a final warning I’d like to cover before ending this;
Theta Gang or TastyTrade Theta-Harvest is NOT Risk-Free
If you’re deciding to sign up to tastyworks and go on listening to tastytrade, their entertainment + educational channel for options trading and investing, you’ll quickly bump into their strategies of collecting theta, stangles, etc, and these strategies are often marketed (by others) as risk-free or ‘easy money.’
This is just a reminder that it’s not, that it’s not free or easy money, and that you have to still have a strategy and assumption that’s right to make money using those strategies in the long-term — if you just sell theta one day you’ll get blown up by a 7-sigma move. Understand the risks and be careful.
Tastyworks Review FAQ's:
Below we’ll go over the FAQ’s we’ve been asked, or encountered, or even had asked ourselves about Tastyworks when we first started checking them out and as we used them — If you have other questions feel free to contact us and we’ll get back to you as soon as we can — and likely even add our answer down below.
How Reliable is Tastyworks?
Tastyworks is one of the most reliable brokerages, alongside Interactive Brokers, as unlike most other brokers they’ve never restricted trading of volatile stocks or equities during for example the $GME viasco of 2020/2021 — while most brokers halted trading prematurely before they were legally required to or had to for some other reason, Tastyworks only limited trading when they were unable to fulfill orders due to exchange restrictions outside of their control.
Tastyworks also has exceptional execution, in our opinion the best of any brokerage we’ve used, so we’d argue they’re extremely reliable.
Is Tastyworks Good for Options Trading?
Tastyworks is hands-down the best platform for options trading in our opinion, as the interface is by far the simplest to understand and use, as well as feature-rich platform for trading options, futures, and derivitives of all types. Tastyworks is one of the lowest fee options platforms, particularly if you trade high volume.
Does Tastyworks have any Sign-Up Bonuses or Promotions?
Tastyworks does at times have sign-up bonus offers and promotions — you can view our dedicated page to such promotions by clicking here — or you can click here to sign up to Tastyworks and likely be eligible for whatever sign-up bonus is that they are offering, if there is any currently.
For reference tastyworks generally does not have a sign-up bonus offer, or has just one that can earn you a couple hundred dollars at most, but generally only around $50 to $100 — so if there’s no sign-up bonus offer currently we’d say it’s not worth waiting for one to be available, as sometimes it’s months in between promos.
How Many Customers Does Tastyworks Have?
It’s hard to say for sure as the figure could change at any time, but last we’ve seen published by Tastyworks or mentioned by the CEO and founders is around 300,000 active customers/clients — which is quite small considering the valuation tastyworks has received — this is likely due to not including inactive accounts like most brokerages include in their client figures.
How Does Tastyworks Make Money?
Tastyworks makes money primarily through trading fees, as while normal average customers may only make them a few hundred dollars a year (at most), there’s many folks who generate tens of thousands of dollars of fees per year for them as they’re frequent traders or market-maker types with large accounts — however Tastyworks also makes money through some trading of their own and other more unique methods.
Tastyworks also has been alleged by some to make money through payment for order flow, around 50 cents per options contract and a penny or so per share of stock, however we haven’t got confirmation on this from Tastyworks — with that being said Tastyworks has fantastic execution of orders and has always given us the quickest fills, so we wouldn’t be concerned about this regardless.
Can You Make Money With Tastyworks?
If you’re a good trader/investor you can definitely make money with Tastyworks, however it’ll depend on your portfolio size and how skilled you are in this regard — I’ve met people who make 1%/week over the long term with tastyworks, making tens of thousands a week, but they’re the exception — not the rule. Most folks seem to either do significantly worse than market averages or marginally better (20-30% better) over the long term, depending on their skill and, honestly, their luck.
When Was Tastyworks Started/Founded?
Tastyworks the brokerage was officially available for public use in 2017 — tastytrade already existed for quite some time before that though. Since Tastyworks was open to the public we’ve been using and testing them, and we can say from first-hand experience nothing has really changed since then in terms of the platform — they designed something great and they’ve stuck to that design and remained focus on their core competency as an Options trading platform.