Overview of TastyTrade
TastyTrade is a new brokerage firm that's trying to offer something new and fresh in certain areas. It's part of the tastytrade
family, and the broker-dealer uses some services from tastytrade on its trading platform. It intentionally fails in some areas,
though. Let's take a detailed look at it in this 2023 TastyTrade Review and see how it compares to some rival brokerage houses.
TastyTrade Pricing and Minimum Deposit
| Investments | Commissions |
|---|
| Stocks and ETFs | $0 |
| Options | $1.00 per contract to open, $10 maximum, $0 to close |
| Mutual funds | not offered |
| Futures | $1.25 per contract to open, $1.25 per contract to close |
| Micro Futures | $0.85 per contract |
| Options on Futures | $2.50 per contract to open, $0 to close |
| Cryptocurrency | 1% |
Banking Features
We were disappointed to learn that TastyTrade doesn't offer checks or a debit card with its brokerage accounts. The company did tell us that they
will consider adding banking features in the future, and this is certainly a plus. We also liked the TastyTrade website, which has a user-friendly
funds transfer tool; so it's pretty easy to move money between a TastyTrade investment account and an external brokerage account.
Mutual Funds
One of the CEO's of TastyTrade, Tom Sosnoff, says that mutual funds aren't
transparent enough. As you might expect, the investment vehicles aren't available at TastyTrade. This is going to disappoint some traders; and it
definitely earns lowest rating here (see Best mutual fund brokers).
ETFs
TastyTrade does offer exchange-traded funds. As we shall see shortly, it offers fantastic pricing on them. However, we didn't find any ETF learning materials, or an ETF center on the website, or an ETF screener.
Customer Support
A TastyTrade associate can be reached during the weekday only. The hours are 7 o'clock in the morning until 5 o'clock in the afternoon, Central Time. Phone and chat support are both options, although the chat function doesn't have an icon at the bottom of the browser like other brokers provide. To start a chat, you need to click on the help link at the top of the page and then scroll down to where it says ‘Chat Now.' We did a test chat and it took several minutes for an agent to come online and a few more minutes to receive a response.
Besides phone and chat, TastyTrade also provides several e-mail addresses for a variety of functions, one of which is technical help.
TastyTrade Commissions, Fees, and Account Requirements
Now we come to the all-important pricing section of the TastyTrade review. The broker charges $0 for stock and
ETF trades, although exchange and regulatory fees are carried by the trader. These charges are usually fraction
of one cent, though.
For options, TastyTrade customers pay $1 on the opening side per contract. One nice policy from the broker that will really benefit high-volume traders is a $10 cap per leg. On the closing side, the commission is $0 plus regulatory/exchange fees. Assignments and exercises cost a very low $5 each.
Although TastyTrade doesn't offer any forex services,
it does provide futures. The commission is $1.25 per contract, and this time it's per side. As with options and equities, exchange and regulatory fees are passed through. Options on futures are also available, and the charge is $2.50 per contract on the opening side and $0 to close.
TastyTrade charges clearing fees on most orders placed on its platform. For equities, it's a very low 0.08¢ per share. For futures and options on futures, it's 30¢ per contract.
It's possible to open a margin account at TastyTrade. Currently, a loan under $25,000 costs 8%. Above $1,000,000, the APR drops to 5%.
There is no fee to open or close a taxable account, and the brokerage house does not require any minimum balance. There are no on-going fees, such annual, low-balance, or inactivity charges.
Transferring an account to another broker costs $75. Paper documents aren't free, either. TastyTrade charges $2 for a paper confirmation, $5 for a statement, and unusually, $5 for a tax document.
TastyTrade Promotion
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IRAs
Individual Retirement Accounts are available at TastyTrade. Choices include Roth, Traditional, and SEP accounts. It's possible to transfer an employer's retirement plan into a TastyTrade IRA. We didn't find a SIMPLE account or a solo 401(k) plan.
We were disappointed in the number of retirement accounts available; but it got worse when we found the brokerage firm's $60 IRA closeout fee. There are virtually no retirement educational resources on the TastyTrade website or platform, and this will of course deduct another star.
Trading Tools
Website
Tastytrade has a user-friendly website, although it doesn't offer any trading capability. So obviously there is no trade bar on the broker's website. There is an intuitive menu at the top that includes several important account management functions. For example, a funds transfer section allows money movement by ACH, wire, check, or ACAT. Linking an external bank account is easy because TastyTrade includes a list of large banks by icon. You simply need to click on the icon and enter your login credentials with the financial institution.
Besides moving money, account information can also be accessed in a different tab. Balances, position information, and account documents can quickly be located.
The top menu also has a link to the company's browser platform, which we will now look at.
Browser Platform
After clicking on the link for the browser platform, we had to login again. This seems rather redundant given that we were already logged into our trial account. In any case, we were impressed with the layout of the platform. It obviously is well designed and thought out.
The primary menu is on the left-hand side. The home icon is the default location. It includes ads for tastytrade learning videos (more on those later), a pre-defined watchlist of stocks with all sorts of characteristics (like high options volume, upcoming earnings, etc.), and a vertical list of recent trades by TastyTrade clients.
Below the home icon is the follow menu. This is where you can find more trades from TastyTrade customers and employees. What we really liked about this section was not just the list of trades, but a trade icon that automatically produces an order ticket with the same exact trade. So if you decide the trade is a good idea, just click on the trade button and send it.
After the follow menu is the portfolio icon. This is where you can view details on your holdings. It also includes information on trade types that have been made in the account, the number of profitable trades, and unrealized profit.
Beneath portfolio is a grid icon, and this is simply a larger version of the grid on the home screen. The grid isn't a heat map, but it is color-coded into red and green tiles that represent gains or losses for the day.
Clicking on a tile populates a right-hand trade bar with a lot of brief details. There is a small chart, whose timeframe can be set to 1 day, 30 days, or 52 weeks. The security's bid-ask spread is shown along with volume and the number of days until its next earnings report.
A chart icon will produce a pop-out chart that sits in the middle of the screen. It can't be expanded full-screen, and even more disappointing, the timescale only expands to 52 weeks. There are no technical indicators, comparisons, or company events.
When you're ready to place a trade, you simply need to click on the security's price in the right-hand menu and a very sophisticated order ticket will appear in the middle of the screen. It can also be generated by clicking on the trade icon in the top of the left-hand menu.
It offers both stock and option modes. In stock mode, there are market, limit, and stop orders available. We would like to see more choices, such as trailing orders. Also missing is direct-access routing, and this will definitely disappoint some traders. We did like the inclusion of extended-hours trading.
For option orders, there are two tabs. One is table, which is option chains. There are less than 10 strategies shown, and we would definitely like to see more added. Contracts can be added to the order ticket simply by clicking on a bid or ask price.
The curve tab displays option contracts on a graph with strike prices along with bids and asks. This might be a good choice for traders who like more of a visual feel rather than numbers in a chart, as with traditional option chains.
Desktop
Now we come to the desktop platform. It has a very similar design as the browser software has. One difference
that we noticed right away, thanks to the default list of negotiable assets in the left-hand column, is the
ability to trade futures contracts on the desktop system.
If you're more interested in stocks and ETFs, the watchlist on the left side can be switched to other characteristics, such as ‘notable stocks,' which shows a list of equities that have large market caps.
In the middle of the platform, there is a similar trading environment as the browser system has. Current positions and working orders are displayed here, although a tab allows you to switch to trade.
Under the trade tab, we found the same features as the browser system has. This includes a table for option chains, and a curve diagram that gives a one-standard-deviation chance (a 68% chance) that the price will hit a target within a certain amount of time.
At the bottom of this middle section sits a trade ticket. It offers the same order types as the browser platform, and as we mentioned, we would like to see this improved. Multiple legs can be added to a ticket for easier order submission.
On the left-hand side of the middle section is a group of icons, one of which is for charting. Clicking on this produces a large charting area, although it doesn't fill the width of the monitor. It offers several graph styles, intervals as short as one minute, and a maximum timescale of 20 years.
There are over one hundred technical studies, including DeMarker and Swing Index. There are several drawing tools as well. During our testing, we found the charting program to be easy to use, but we missed the ability to place a trade with the right click of the mouse.
Mobile App
TastyTrade offers a mobile app for Apple and Android devices. However, the Apple version can only be used on iPhone 6 and higher, while the Android platform needs at least a Nexus 6 or equivalent.
During our testing, we once again found the interface to be nicely designed. Large buy and sell buttons appear at the top of the screen on the trading ticket, and they are green and red for easier use. We didn't like the absence of direct-access routing and trailing order types. We did like the fact that orders can be tagged for extended-hours trading.
Charting is available on the mobile app, but we weren't very impressed with it. A graph cannot be rotated horizontally, there are no drawing tools, and technical studies aren't included. One year is the maximum timescale, which isn't enough for many stocks. We did like the ability to zoom in on price action.
The app has some good option trading tools on it. In fact, they are the same that the browser and desktop programs offer. Either table or graph format can be chosen to investigate contracts. The app shows the maximum profit and loss a particular option strategy has. On the option trading page, it's easy to shuffle between derivative strategies, although we would like to see more of these added in the future. It's also easy to move from one expiration date to another, or from one strike to another. This makes using the chart just as easy as the traditional table.
The watchlist feature is similar to what we found on the other two platforms, with pre-defined lists already populated and the ability to create your own.
Investment Education
For investment education, TastyTrade uses tastytrade, its sister company. It produces eight hours of live broadcasts each weekday. Some of the sections are saved in an on-demand library. These are available on all three platforms. Market commentary is frequent on the live feed. Some videos show how to assemble different types of option strategies.
The market commentary isn't quite CNBC or Bloomberg, but tastytrade offers more information on options; so derivative traders might actually prefer tastytrade.
Missing in this category are third-party stock reports, in-depth security profiles (either on the website or the trading platform), and articles that cover financial education.
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TastyTrade Comparison
While TastyTrade's software is nicely designed and free to use, it does lack some features that other platforms
offer. Zackstrade
has more technical studies and offers direct-access routing.
On a positive note, TastyTrade does beat WellsTrade and Firstrade, neither of whom have a desktop platform.
In the realm of investment education, we thought TastyTrade underperformed the competition. We missed free stock reports, which are available from
Merrill Edge and Ally Invest. TastyTrade doesn't provide any third-party analysis. It also doesn't have a library of educational articles, which
Vanguard and E*Trade do have.
Recommendation
For mutual fund and bond traders, we obviously can't recommend TastyTrade. But
Ally Invest
would be a great choice here.
We can recommend TastyTrade for active stock, ETF, and option traders due to the company's
attractive commission schedule and effective trading tools.
We do not recommend TastyTrade for beginner investors because the brokerage firm doesn't have
24/7 service, nor does it offer a sufficient amount of learning materials.
We can recommend TastyTrade for small accounts due to the broker's great fee schedule, which
includes zero deposit and zero on-going fees.
For retirement savers, TastyTrade is hard to suggest because other brokerage firms (such as Schwab and
TD Ameritrade) have better choices (including more account
types and portfolio management services), dedicated retirement departments, and target-date mutual funds.
Awards
TastyTrade Review Summary
As you see from this 2023 brokerage review, TastyTrade is a very unique firm that has a different
style. It's definitely not a traditional brokerage house. It probably would be best for investors who have used
tastytrade in the past and enjoy it. Their $0 initial deposit policy, great trading technology, and low-cost
commission schedule make it a must try for traders.
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Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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