Tastytrade Review 2024: Pros, Cons and How It Compares
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Our Take
4.5
The bottom line:
Pros & Cons
Pros
Powerful trading platform.
Commission-free stock, options and ETF trades.
Low options contract fees.
Strong mobile trading app.
Cons
Limited external research providers.
Low interest rate on uninvested cash.
Advanced platform not suitable for beginners.
Compare to Similar Brokers
NerdWallet rating 4.8 /5 | NerdWallet rating 5.0 /5 | NerdWallet rating 4.6 /5 |
Fees $0 per online equity trade | Fees $0.005 per share; as low as $0.0005 with volume discounts | Fees $0 |
Account minimum $0 | Account minimum $0 | Account minimum $0 |
Promotion None no promotion available at this time | Promotion Exclusive! U.S. residents who open a new IBKR Pro account will receive a 0.25% rate reduction on margin loans. Terms apply. | Promotion Earn up to $10,000 when you transfer your investment portfolio to Public. |
Learn more on Charles Schwab's website | Learn more on Interactive Brokers' website | Learn more on Public's website |
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Full Review
In this review of tastytrade
Where tastytrade shines
Good pricing on options trading: At $1 to open and $0 to close, tastytrade's options trading pricing equates to $0.50 per contract, which is competitive compared with other brokers.
Great platform: Tastytrade's trading experience received a glowing, albeit cautious, review from us when we tested. The app is fast and the interface is fantastic, but it is highly advanced and creates opportunities for beginners to make costly mistakes.
Where tastytrade falls short
Limited external research and data: Tastytrade has an impressive amount of internal research, accessed through tastylive, but if you want external research you may need to look elsewhere.
Low rate on uninvested cash: It's nice when the extra cash in your brokerage account earns a decent return. Unfortunately, at tastytrade, it doesn't.
Alternatives to consider:
For more research: Interactive Brokers
For higher interest on uninvested cash: Fidelity
What type of investor should choose tastytrade?
Very advanced traders: This is the double-black diamond of investing platforms. If you have the institutional knowledge and experience to make the most of it, you'll find it unmatched. If you're a beginner, you'll be clinging to the trees and carrying your skis on the way down.
What the Nerds think 🤓
Chris Davis, investing editor and reviews lead
"Tastytrade is not for messing around. Out of the gate, you'll need a lot of knowledge. There are no on-the-go trainings for order types, so you'd better know how stop limit, market, etc. orders work before you place a trade. The pre-built options strategies are awesome, but again, this isn't the place to learn.
"The tastytrade audience is high-powered traders looking to make big moves, though, and it meets their needs: The default stock trade is for 100 shares, it's extremely fast and the interface is advanced. For the amount of data they present you, there's no lag or glitching. You can customize your dashboard, as well as default order sizes, types and strategies. This is a really good platform for very experienced traders, but don't bother with it if you're a beginner or even intermediate trader."
Tastytrade at a glance
Account minimum | $0 |
Stock trading costs | $0 |
Options trades | $1 to open, $0 to close |
Account fees (annual, transfer, closing, inactivity) | Annual fee: $0 Inactivity fee: $0 Outgoing ACAT transfer fee (partial or full): $75 IRA termination fee: $60. |
Interest rate on uninvested cash | 0.01% |
Number of no-transaction-fee mutual funds | Not available |
Tradable securities | Stocks, ETFs, options, futures, cryptocurrencies, Treasurys |
Trading platform | Three: Web, desktop platform and mobile app. |
Mobile app | Available for iOS and Android |
Research and data | Refinitiv |
Customer support options (includes how easy it is to find key details on the website) | Phone, chat and email 7:00 a.m. to 5:00 p.m., Monday to Thursday and 7:00 a.m. to 4:00 p.m. CST on Friday |
» Looking to switch brokers? View the best broker promotions right now
How to sign up for a tastytrade account
To open a brokerage account with tastytrade, you'll need to fill out an online application. Once tastytrade's accounts team has reviewed your application, you'll receive a follow-up email. When your account is open, you can start trading.
During the sign-up process, tastytrade asked what our level of experience was, and based on that, locked certain trades (like naked puts) so that we couldn't accidentally stumble into them. We appreciated this extra level of protection for more amateur traders.
What to know about tastytrade's fees
Like many other brokers, tastytrade charges no stock trading or options trading commission.
Most brokers charge a flat fee per options contract, such as $0.65 per contract. But tastytrade charges $1 to open and $0 to close. Essentially, this breaks down to $0.50 per contract since you're only paying that $1 fee once, whereas with other brokers, you have to pay the $0.65 fee on each side.
As an example: If it's $1 per contract to buy, and $0 to sell, and there are 10 contracts (to buy and sell), that would be $10 total. A broker that charges $0.65 per contract would cost $13 total. Additionally, tastytrade caps its equity option commissions at $10 per leg. All of this makes tastytrade a bit cheaper than most other brokers offering options trading.
» See our list of the best brokers for trading options
Tastytrade charges no annual or inactivity fees, but it does charge a $75 outgoing ACAT transfer fee to move assets out of your account, as well as a $60 IRA termination fee.
Tastytrade's trading platforms and apps
The founders of tastytrade have quite the resume: They also founded legendary investing platform thinkorswim. Before that, they worked as floor traders. If anyone knows the advanced investing space, it's these folks.
If you're looking for a lightning-fast platform with an impressive interface, tastytrade has it. Tastytrade is available on the web, on a desktop platform and a mobile app. The mobile app scores well and is available for both iOS and Android. Tastytrade has some pretty cool features too: The Follow Feed allows you to see trades from select traders via tastylive (tastytrade's network that produces tons of original content) and the in-platform video feed lets you watch real traders whenever the market is open.
The desktop platform has lots of cool features, such as customizable chart indicators, historical options data, curated watchlists and "tastycharts mode," which allows you to see multiple stocks and futures charts at the same time.
How we nerd out testing trading platforms
Our reviewers — who are writers and editors on NerdWallet’s content team — test every online broker platform in our analysis hands-on. That way, we can report on every aspect of the user experience, from funding a new account to placing trades.
We score each broker against criteria that factor in the capabilities offered and the actual user experience of trading with those capabilities. This includes how easy it was to sign up for and fund a new account. Note that a broker may score very highly for the platforms it offers but low for the experience of actually using that platform. Our analysis scores these criteria separately and weighs them evenly when factored into the broker’s overall score. As a result, a broker can offer an advanced trading platform. Still, if it is clunky to use or the process of opening an account is unnecessarily arduous, their score will reflect that.
Tastytrade's investment selection
Tastytrade offers investors access to stocks, ETFs, ADRs, REITs, options, index options, futures, cryptocurrencies and Treasury products. This is a nice spread, especially for the crowd tastytrade is trying to attract.
Tastytrade does not currently support mutual funds, which may make them less attractive to retirement investors. Advanced traders may not miss the mutual funds, but they may want access to forex, OTC securities or IPOs — none of which tastytrade offers.
Other key tastytrade features
Research and data offering
For such an advanced platform, tastytrade doesn't offer terribly impressive external research offerings. Tastytrade has research from Refinitiv, and fundamental data including income statements, balance sheets, ratios and analyst forecasts. Compared to competitors like Schwab's thinkorswim platform, these offerings are pretty lean.
But what tastytrade doesn't have for outsourced research it makes up for with its affiliate company, tastylive, a network that streams 7 days a week and produces hours of "hard-hitting, probabilistic content." Tastylive has over 100 original segments and 20 on-air traders to help you make informed trading decisions. There's a solid Learn Center that offers full courses, from a Beginner Options Course to a Deep Dive: Implied Volatility Course. And while total beginners should be wary of tastytrade, these courses can help traders level up.
Execution quality
At 97.35%, tastytrade's execution quality is fairly good, although the broker does accept payment for order flow (PFOF). PFOF is when firms pay brokers to route customer orders through them, and some regulators have proposed potential regulations around the practice. Although PFOF won't strongly impact most investors, PFOF brokers could execute orders slightly slower or at slightly worse prices than non-PFOF brokers. And if anyone would feel the effects of PFOF, it would likely be tastytrade's target audience of highly advanced traders.
The average execution quality of all brokers we review was 96.95% as of Oct. 16, 2024. That means 96.95% of orders sold for at a price that was at or better than the National Best Bid and Offer. Executing at or above the NBBO means you may receive a price improvement or a better share price than you were originally quoted.
Good to know about tastytrade
Customer support
tastytrade offers customer service over the phone, by chat and email Monday to Thursday, 8:00 a.m. to 6:00 p.m. Eastern time, and Friday 8:00 a.m. to 5:00 p.m. Eastern. This is good for business hours traders, but some brokers offer weekend or even 24/7 customer support.
Interest rate on uninvested cash
Some brokers offer a high interest rate on uninvested cash within your brokerage account; tastytrade isn't one of them. Tastytrade pays just 0.01%. For most advanced traders, this likely isn't as big of a deal as it might be for longer-term or casual investors who may earn dividends or keep a cash allocation within their investment account. But if you want a better interest rate, you may want to shop around.
Is tastytrade safe?
Tastytrade is covered by SIPC insurance, which protects brokerage accounts up to $500,000. SIPC insurance does not cover investment losses or price fluctuations. Tastytrade is also regulated by the SEC and FINRA.
Is tastytrade right for you?
If you're a highly experienced investor, you know the lingo, and can comfortably navigate an advanced platform with little help, tastytrade may work well for you. Tastytrade offers a great trading experience with impressive speed. If you're a beginner or intermediate trader, this is not the platform for you.
