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Rapidly growing futures and options broker tastytrade provides hands-on, active trading experience for novice traders. Its competitive fees and user-friendly interface allow beginners to diversify their portfolios across various asset classes, including stocks, crypto, and commodities.
Business Insider's personal finance team compared tastytrade to the best commodity trading apps and found it to be an industry leader for trading commodity futures, options, and on margin. However, it needs more in-platform trading features and tools.
$0 ($2,000 for margin accounts)
$0 for stocks and ETFs (options start at $1 per contract and capped at $10 per leg)
- No account minimum to open an account
- A large selection of options and futures trading
- Transparent fee structure
- Doesn’t offer mutual funds or bonds
- Only offers small selection of cryptocurrencies for trading
- No robo-advisor or human-advisor access
- A large selection of options and futures trading
- No account minimum to open an account
- Only offers 25 cryptocurrencies for trading
- No robo-advisor or human-advisor access
- $0 for stocks and ETFs (options start at $1 per contract and capped at $10 per leg)
Introduction to tastytrade
Previously called tastyworks, tastytrade is a top options trading platform for beginner and intermediate active investors to trade commission-free stocks, ETFs, and options. It offers a transparent fee structure, various educational resources, and a range of options and futures.
The platform is best for hands-on investors interested in an active investing style. Active trading requires investors to dedicate a significant amount of time, money, and expertise, which may not be suitable for most novices. However, certain platforms (like tastytrade) cater to beginners seeking affordable, hands-on experience without overly complicated charting tools and fee structures.
As one of the best apps for trading commodity futures, tastytrade provides investors with access to precious metals, livestock, and energy-based securities. Its community trading features include its Follow Feed tool and in-platform video feed. These allow tastytrade users to learn and be inspired by one another while participating in informed trade-based discussions.
Although tastytrade does provide some educational features — like blog posts, the in-platform video feed, and the Follow Feed feature — it doesn't provide research from third-party sources. It also doesn't offer advanced charting tools, goal-building features, or portfolio tools that experienced traders might expect from other trading platforms.
Tastytrade: Overall Rating
| Feature | Insider rating (out of 5) |
| Fees | 4.00 |
| Investment selection | 4.00 |
| Access | 5.00 |
| Ethics | 5.00 |
| Customer support | 4.50 |
| Overall score | 4.47 |
How tastytrade Works
Tastytrade Trading Levels
How you fund your tastytrade account (cash or margin) affects the kind of securities and investment strategies available to you. Once opened, cash accounts cannot be converted to margin and vice versa.
With a tastytrade cash account, you can access the platform's selection of stocks, ETFs, options, cryptocurrencies, and covered calls. You can also sell cash-secured puts. There's only one trading level for a cash account, plus you won't be able to short stocks or futures.
Margin accounts, on the other hand, have three trading levels:
- Limited: Allows investors to buy stocks, ETFs, and options, sell covered calls, sell cash-secured put options, and trade cryptocurrencies.
- Basic: With a basic margin trading level, you can buy stock, ETFs, options, and crypto. Investors can also sell covered calls, and naked puts, and access defined-risk options spreads.
- The Works: This is the highest margin trading level. It offers stocks, ETFs, options, smalls, futures, and cryptocurrencies. You can also sell covered and uncovered calls, naked outs, naked calls, short-sell stocks, and access defined-risk options spreads.
Trading levels are based on your investor profile and self-reported trading objectives, knowledge, and financial standing. You can view your trading level under the "My Current Plan" section. If you're eligible to upgrade, the next trading level will be available to you as an upgrade.
Users with "The Works" can apply for Portfolio Margin (PM) for greater leverage and margin flexibility.
Individual and Joint Brokerage Accounts
The platform offers individual and joint brokerage accounts featuring long-term and short-term strategies, adjustable positions, and dividends. However, only individual accounts can trade cryptocurrencies. To permit crypto trading, you must enable cryptocurrency trading on your cash account.
The two joint account options are:
- Tenants in Common Joint Account: This account permits two owners to specify the percentage of assets owned by each account owner. If one of the owners passes away, the deceased owner's assets are sent to that person's estate.
- Joint With Rights of Survivorship Account: Two account owners will have an equal share of the account's assets. If one of the owners passes away, all the account's assets are transferred to the surviving owner.
Tastytrade IRAs
Individual cash retirement accounts allow investors to buy stocks and options and sell covered calls and cash-secured puts in a traditional, Roth, SEP, or beneficiary IRA. Remember that you won't be able to trade cryptocurrencies in an IRA. Borrowing and shortening stock is also not available.
Retirement-focused investors can unlock additional investment strategies (including defined-risk options spreads, sellable naked calls, and futures) with a margin-funded IRA at the Basic and The Works levels.
Entity Accounts
Entity accounts are tax-advantaged trading accounts owned by a legal entity, such as one belonging to a corporation. Corporations or limited partnerships can authorize one or multiple individuals to trade on the entity's behalf.
The online brokerage offers the following corporate-owned accounts:
- C Corporations: These are legal entities that are US state-authorized to run a business and pay corporate-level income taxes.
- S Corporations: These are legal entities authorized to conduct business in a US state. They do not pay corporate-level income taxes and can have no more than a hundred shareholders.
- LLC: A Limited Liability Company (LLC) isn't a corporate entity. Instead, the company offers limited liability to account owners. This account has a pass-through income tax status, meaning that the business's income is reported as an individual's income to receive income tax returns and rates.
- Partnership accounts: A legal entity of two or more individuals. Account partners don't pay income taxes and distribute profits to the individual partners.
Trust Accounts
The platform offers a trust account option, an investment account that legally allows a trustee — usually a third entity — to manage the account assets on behalf of the account's beneficiaries. Beneficiaries receive legal protection over their assets through a trust account.
When you open a trade account, tastytrade provides a copy of the Certificate of Trust and Investment Powers.
Investment Options with tastytrade
The platform offers thousands of US and international stocks and ETFs. Commodities can be traded as options, futures, futures options, stocks, and ETFs. Eligible individual users can enable cryptocurrency trading to buy and sell Bitcoin, Bitcoin Cash, Ethereum, and Litecoin directly (only long positions are permitted).
Only margin accounts at The Works level can access futures trading. Futures trading includes micro futures and small futures (aka The Smalls). You can get futures for:
- Equity index futures
- Interest rate futures
- Foreign currency futures
- Energy futures
- Metals futures
- Livestock futures
- Agricultural futures
There's a range of options products, including stocks, ETFs, and index options. Additionally, you can trade futures options of different asset classes, such as equity indices, commodities, currency, interest rates, and crypto. Mini, micro, and small futures options are also available.
Available index products on tastytrade depend on your account level. The Works account, for example, offers access to trade index futures. You can also get access to trade index options and index ETFs.
Tastytrade Fees
Tastytrade is transparent about its pricing and fees. There's no cost to open a cash account. But to open a margin account and access these features, you must maintain at least a $2,000 minimum in your account.
The broker-dealer charges opening commission fees and closing commission fees on its assets. Here's the breakdown:
| Investment options | Opening commission fee | Closing commission fee |
Stocks & ETFs | $0 unlimited shares | $0 |
Futures | $1.25 per contract | $1.25 per contract |
Micro futures | $0.85 per contract | $0.85 per contract |
Smalls futures | $0.25 per contract | $0.25 per contract |
Small futures options | $0.50 per contract | $0 |
Options on futures | $2.50 per contract | $0 |
Options on micro futures | $1.50 per contract | $0 |
Options on stocks & ETFs | $1.00 per contract (capped at $10 per leg) | $0 |
Cryptocurrency | $0 per crypto purchase | $0 |
When margin trading, you'll pay between 8.00% and 11.00%, depending on your account balance.
Pros and Cons of tastytrade
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Tastytrade Trustworthiness
Users will be glad to know that tastytrade has an A+ rating from the Better Business Bureau. The BBB gives businesses grades from A+ to F when assigning its ratings. Ratings represent how well a company interacts with its customers, and tastytrade has received the highest possible score.
There are currently no charges, lawsuits, or scandals against the business.
Tastytrade vs. Other Commodity Trading Apps
Tastytrade vs. Fidelity
Both tastytrade and Fidelity Investments offer stocks, ETFs, and options for no account minimum.
Fidelity is one of the best online brokerages for retirement savings, offering a large selection of assets compared to tastytrade. Fidelity also offers mutual funds, bonds, CDs, annuities, and IPOs. Fidelity is the better option if you're looking to invest in any of these assets. It's also better for passive investors interested in utilizing Fidelity's robo-advisor, Fidelity Go.
Although tastytrade is the better choice for options, futures, and cryptocurrencies, other platforms, such as those on our guide to the best cryptocurrency exchanges, are better for buying and selling decentralized assets.
Tastytrade vs. Merrill Edge
Similar to tastytrade, Merrill Edge offers commission-free trades, but it also has a robo-advisor. Overall, Merrill Edge is better for passive investing and access to human advisors (both features tastytrade doesn't offer).
If you're looking to invest in futures or futures options, tastytrade is a stronger platform with a transparent fee structure. It's also a better option for cryptocurrency trading, as Merrill Edge doesn't offer that.
Tastytrade FAQs
Tastytrade is a good platform for beginners interested in actively trading stocks, ETFs, commodities, futures, and options. It offers commission-free trades, a user-friendly interface, community-based trading tools, and various educational resources.
Tastytrade offers commission-free trades for stocks, cryptocurrencies, fractional shares, futures options, and index options. Futures, micro futures, and Smalls are not commission-free. Certain contract, exchange, and transaction fees may apply.
Tastytrade differentiates itself from other brokers with its transparent pricing and commission-free options. It primarily caters to active trading and options strategies with its unique "Trade Small, Trade Often" philosophy.
Methodology: How We Reviewed tastytrade
We applied Business Insider's rating methodology for rating investment products to compare fees, ethics, access, investment selection, and overall customer experience when reviewing trading platforms. Top online brokerage platforms offer multiple investment options, advanced charting tools, education resources, and more for different trading needs.
Some online broker dealer platforms are best for beginners, while others are more fitting for more advanced traders. We evaluated tastytrade with a focus on how well it performs in each category compared to similar platforms.
