tastyworks review 2021

Bankrate senior reporter James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more.

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tastyworks Logo

Best For

  • Options traders
  • Active traders
  • Cost-conscious traders

You might not be familiar with tastyworks, since it’s a relatively new entrant in the online brokerage space, having debuted as a broker-dealer in just 2017. But while it may not have the longevity of E-Trade or Charles Schwab, that doesn’t mean its leadership hasn’t been around the block. In fact, the broker’s senior leaders were the brains behind thinkorswim, a highly regarded brokerage that ultimately sold out to TD Ameritrade in 2009. And now they’re back with a new brokerage that caters to traders, especially options traders looking for attractive commissions. Amazingly, they even offer a low-capped commission on your options trades.

Tastyworks offers commissions and features that active traders are likely to find appealing, though it may not appeal to everyone such as long-term buy-and-hold investors, newer investors or those who need mutual funds (since the broker doesn’t offer any.)

tastyworks at a glance

Star Rating

3.5
  • Cost: 3 of 5
  • Accounts and trading: 3.5 of 5
  • Research and Education: 3 of 5
  • Mobile: 3.5 of 5
  • Customer Experience: 3.5 of 5
  • Minimum Balance:
    $0
  • Cost per stock trade:
    $0
  • Cost per options trade:
    $1 per contract on the buy and $0 on the sell, but commissions capped at $10 per leg
  • Promotion:
    100 shares of stock or 10 options contracts (must fund the account with $2,000 or more)
  • Commission-free mutual funds or ETFs:
    All
  • No-transaction-fee mutual funds:
    None
  • Securities tradable:
    Stocks, ETFs, options, crypto, futures, futures options
  • Customer service:
    Phone Monday-Friday 8 a.m.-6 p.m. ET, chat, email
  • Account fees:
    $75 transfer out fee, $60 IRA closing fee
  • Mobile app:
    tastyworks offers the “tastyworks” app on the Apple App Store and Google Play Store.

Top features you’ll love

Follow Feed

Are you looking for a new trade idea? You can use Follow Feed to track the trades of select traders. You’ll see when they executed their trade, their strategy and their rationale. You’ll also get an idea of their trading expertise and record of returns, so you’re not following just anyone.

This feature is fully customizable, so you can add and delete traders as and when you want. It’s similar to the CopyTrader feature at eToro, and it adds a social element to the experience. 

Pros: Where tastyworks stands out

Focus on trading securities

Tastyworks really focuses on securities that are popular with traders, where money can be quickly won (or lost). So if you’re looking for that kind of access and focus, then the broker may work for you. For example, tastyworks offers the following securities: 

While some of these securities are geared more toward long-term investing, such as stocks and ETFs, the rest are more like short-term trades than investments. And, as noted below, tastyworks really structures its commissions to attract this kind of trading clientele. 

If you’re not here for this deep bench, you may prefer a broker such as Fidelity Investments or Charles Schwab that offers traditional securities with more of a focus on investing.

Commissions

Tastyworks has really designed its brokerage to appeal to active traders, especially in more niche securities such as futures and options. But even stock and ETF traders will find something to like here, with the broker’s $0 commission, which admittedly is par for the industry today. 

But you’ll see a real standout difference between tastyworks and other brokers when it comes to commissions on other products. Take options, for example. Unlike most brokers that charge you a commission when you buy and sell, tastyworks charges a flat rate on buys and no charge on the sale. Tastyworks charges $1 per contract on the buy, translating into $0.50 per round-trip, compared to the industry standard of $0.65. Only a handful of brokers (TradeStation and Ally Invest, for two) hit that $0.50 level without a discount, though this doesn’t include other no-commissions players such as Robinhood and Webull. 

But tastyworks actually does more than this for options traders. It actually caps the commissions on each leg of an options trade to a bare bones figure of $10. Trade 10 contracts and it will cost $10. Trade 20 contracts and you’ll still pay just $10, and so on. Of course, if you’re doing more exotic options trades with multi-legs, you’ll pay more in total because of the extra legs on the transaction. But each leg will still be charged $1 per contract and capped at $10 total. So a two-legged trade with 20 contracts would cost you $20, while 40 contracts would still cost $20.

Tastyworks also offers cryptocurrency trading and charges a 1 percent fee on both the buy and sell, but it caps this commission at $10 as well. So once your trade surpasses $1,000, you’re not paying any extra commission on that specific transaction. 

However, if you’re into futures, you’ll pay both an opening and closing commission of $1.25 for standard futures contracts — micro futures and small futures are also available. 

Access to cryptocurrency

Cryptocurrency has become a popular trading vehicle, and tastyworks gives you access to it, when many online brokers still won’t touch it (TradeStation, Robinhood and Webull being a few exceptions). Plus, you’ll have a decent percentage commission with a cap on it, as mentioned. 

You’ll be able to trade 13 different types of cryptocurrency, including some of the most popular ones, including Bitcoin, Bitcoin Cash, Ethereum, Litecoin and more. 

Quick comparison of Brokerage options:
Brokerage Overall Rating Avg. Cost Per Trade Accounts and Trading
tastyworks logo
$0 3.5 of 5
Interactive Brokers® review 2021 logo Read Our Review
$1*, $0 for IBKR Lite 5 of 5
Charles Schwab® review 2021 logo Read Our Review
$0 5 of 5
Robinhood® review 2021 logo Read Our Review
$0 3 of 5

Cons: Where tastyworks could improve

Lacks major trading securities

Tastyworks offers many securities that are great for traders, but one could say it’s deep and not broad in that regard. For other investors, especially many typical long-term buy-and-hold types, it may prove less than attractive on this front. That’s because the broker does not offer some key areas at all, including bonds and mutual funds. It’s not just that tastyworks does not offer any no-transaction-fee mutual funds – there are no mutual funds at all! Ditto with bonds. 

If you’re not an investor in those areas – and plenty of people aren’t – this gap won’t bother you at all, especially given the popular securities already on offer. 

No fractional shares

The broker also doesn’t offer fractional shares, either when you buy or as part of dividend reinvestment. With fractional shares, you can put all your money to work in the market and even with dividend reinvestment plans small amounts are fully put to work. (The broker doesn’t offer dividend reinvestment anyway, so that’s something of a moot issue here.)

While fractional shares don’t mean much to traders, newer or long-term investors may be the difference between going with one broker over another. If they’re an important feature for you, have a look at Bankrate’s list of top brokers for fractional shares.

Slow setup process

It may take you longer to set up an account on tastyworks than what you have become accustomed to. Often these days you can establish a brokerage account in 15 minutes, fund it as part of the opening process or shortly thereafter and have a good look around on the inside.

When opening a tastyworks account, you may be hit with the following message: “Watch for a ‘Welcome’ email in 3-5 days when this account is ready for funding.” In a world where Robinhood will front you up to $1,000 immediately when you get started, tastyworks’ lead time seems surprisingly long. And you may not even be able to log into the trading platforms, either, until your account is fully authorized to trade. That could be a turn-off to traders ready to roll. 

Bottom line

Tastyworks is definitely making a pitch for active traders, especially those who like some of the high-volatility trading action but don’t want to pay a fortune in fees: 

  • The low options commissions may prove attractive to that segment of traders, especially if they’re dealing in volumes that are high enough to benefit from the capped fees. 
  • The low commissions on stocks and ETFs may still prove attractive to buy-and-hold investors, however, even if they’re less interested in the trading action.
  • However, those looking for mutual funds and bonds – two popular categories for retirement investors – will have to turn elsewhere. 

Investors looking for crypto trading to go with no-cost stock and options trades could look at Robinhood or Webull. Those needing a good all-around brokerage – even if they want to do a little trading – should have a look at Fidelity or Charles Schwab. While investors looking for a high-powered trading experience could have a look at Interactive Brokers or E-Trade. 

 

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