TastyWorks

Discussion in 'Online Brokers' started by HowardS, Dec 1, 2016.

  1. Scott Slivnik

    Scott Slivnik Well-Known Member


    I also pay a flat $1.25/contract at TOS. TOS does add an additional $0.03-0.04 fee per contract so the actual cost at TOS is between $1.28 - $1.29/contract. Switching to Tastyworks would result in a cost reduction when trading SPX but the savings would be minimal and not worth it for me. If I traded equities or RUT more often, I would consider switching months from now after the dust settles.
     
  2. Harry

    Harry Well-Known Member

    I think a lot of people mention 1.25 per contract with Ameritrade / thinkorswim so with 20 contracts X 2 (roundtrip) X 1.25, it comes out to same = 50 bucks. It may be better for RUT etc., but for SPX it is a wash.
     
  3. status1

    status1 Well-Known Member

    So I guess this is aimed more toward those traders that don't have a special deal or discount like the 1.25 mentioned
    That way a small time trader can have a similar fee as someone who has a discount for volume trades
    So you don't have to trade 500 to 1000 option trades just to get a special discount you could trade just one per month and have a similar fee I think that's probably what they meant by leveling the playing field
     
  4. Harry

    Harry Well-Known Member

    Right but if you go beyond, there are so many people who trade RUT and then individual equity options or ETF options like TLT, GLD. RUT fees are lower by 47 cents each side (65 - 18), same for NDX. And stock / ETF options, the fees are lower by 55 cents each side (65 - 10). For those instruments ... it makes quite a lot of sense because if you negotiated 1.25, I presume it is the same for SPX vs RUT vs SPY vs TLT.

    So the same 5/10/5 butterfly on RUT will be about 27 bucks as compared to 50 for SPX. A whole lot better. And given that so many people trade RUT and let us say a lot more start doing it because of the fees, it does a) level the playing field that you do not need to negotiate and b) put pressure on big guys.
     
  5. Scott Slivnik

    Scott Slivnik Well-Known Member

    TOS (TD Ameritrade) does charge the same commission for index, ETF and equity options. $1.25/contract is about as good as it gets currently for SPX and VIX but is a crappy rate for everything else.

     
  6. Jack

    Jack Well-Known Member

    Apart from the commissions, I do not see any meaningful options analysis charts (P&L, volatility, different DTEs, adjustment tests, etc). All I see on the website is a probability curve. Tom & Tony trade mainly based on probabilities, they hardly look at P&L charts or any charts so their platform seems to be tailored to their trading style. The slogan is "trade small, trade often" with some of their guys doing 5000 - 7000 trades/yr and letting the probabilities work out. My style is different. I trade few large trades and do not care about probabilities that much. I still prefer TOS anyday.
    On a different topic, I suspect that Tastyworks will be bought over by TD or another brokerage a few years down the road. My own opinion.
     
  7. Harry

    Harry Well-Known Member

    Ha ha once you have learnt how to build and sell a company (and have cred doing it), repeating it is much simpler than actually running a company for profits. True !
     
  8. Harry

    Harry Well-Known Member

  9. Kevin Lee

    Kevin Lee Well-Known Member

    Trade small, trade often .... that's obviously any broker's dream. :)
     
    Chaitanya likes this.
  10. stevegee58

    stevegee58 Well-Known Member

    That's a very common strategy in the start-up world. Your business plan is to develop a technology far enough to get the interest of deep-pocketed buyers and make your fortune when bought out by the highest bidder.
     
  11. cowmoo87

    cowmoo87 Member

    Hi,
    The cheap commission structure for options trading, AFAIK are:
    https://www.lightspeed.com/pricing/commission/ ($0.60/contract, no ticket charge; Smart Router to exchange or can go Direct Routing; Pass Through Exchange/Taker Fees)
    https://www.interactivebrokers.com/en/index.php?f=commission&p=options1 ($0.70/contract; $1 minimum/ticket; Smart Router or Direct to Market Routing; Pass Through Exchange Rebate/Taker Fees)
    https://brokerage.tradier.com/pricing ($0.35/contract; $5 minimum/single leg; $7 minimum/multi-leg; not sure about how it routes orders)

    I use IB for execution; ToS for options analytics; and Tastytrade for entertainment,

    I believe there is a serious conflict of interest for TastyTrade to tout a "Trade Small, Trade Often" strategy as it was previously affiliated with TDAmeritrade and now with TastyWorks:

    Tom Sosnoff et al. lost a lot of credibility IMHO touting Karen the Supertrader who traded naked strangles on SPX who was exposed by SEC for false accounting when she drew down in 2014 market correction; in 4 or 5 of her interviews with Sosnoff, either of them mentioned any meaningful ways of managing her positions via option greeks and her P&L can change exponentially by Gamma, Vega or associated second-order greeks, just "sell naked some OTM option calls and puts and you too can mint money,"

    Thanks,
    Paul
     
    Last edited: Jan 6, 2017
    Mark17 and Rtb like this.
  12. status1

    status1 Well-Known Member

    I think when comparing fees you have to look at the total fees and also the quantity
    So it's not exactly apples to apples comparison
    Some brokerages have platform fees which are based on a certain amount of trading volume or have a tier fees based on volume or a fixed per trade fee plus an additional smaller fee per option contract

    It all depends on the individual traders trading style
    Some make small trades often while others have a longer investment time horizon

    So of course for Tastytrade "Trade Small, Trade Often" works better compare to a brokerage that have a per trade commission plus a per contract fee but that tends to diminish as you increase the contract size
    From what I learned about the fees here speaking for SPX only so let's say I place one option trade that would cost $2.50 round trip The same trade at my brokerage that would cost about $13 just to get in so that sounds like a good deal if I only traded a few contracts at a time

    On the other hand for 26 contracts at Tastytrade the commission would be $65 for round trip while at my brokerage I just paid 32.79 to get in so assuming I can get out in one trade and assuming the same commission that would cost $65.58 round trip
    So in this case I would only gain $0.58 cents in which case the advantage is minimal and not really worth it to move there unless they have something else to offer
     
  13. Harry

    Harry Well-Known Member

    status1: if all you are doing a single contract trade, you do not need a big broker, you could find a cheaper broke and find per contract fees that even if not low are reasonable.
     
  14. status1

    status1 Well-Known Member

    I am doing around 20 contracts basically a 5/10/5 bwb in one trade sometimes I may add a condor for another 22 contracts but than I keep that for hopefully more than a month or until I feel I need to make an adjustment
    I think I explored most of the discount brokers and I have an account with a few of them
    Do you have an example of such a broker that has these low reasonable fees with no additional charges or requirements to get this reasonable rate ?
    I am just curious if you are thinking of a broker that I have an account with already or maybe you know of one that I never heard about until now
     
  15. Harry

    Harry Well-Known Member

    I am not an expert in all brokers, but does not IB (interactive brokers) charge per contract fee to start with anyways?
     
  16. status1

    status1 Well-Known Member

    True but Tastyworks charges per contract too but when you factor in all the fees and the contract size the commission for me and my trading size it's hardly any difference
    I tried IB out sometime in 2015 I think but I did not like the platform I guess for someone who got used to the TOS platform is not easy to get used IB platform plus they are charging extra to get quotes for SPX and RUT and some other fees as well so I did not want to start trading and than find out what the real cost is with all of the fees factored in
    It's difficult to calculate what the real commission is with all the nickel and dime fees added in If they had a better platform with a simple low commission I may have opened an account there
    I haven't even tried the option analytics which would be another big decision factor whether to open an account there or not
     
  17. HowardS

    HowardS Active Member

    i'd be interested to hear if anyone has successfully opened a Tastyworks account, and what your thoughts are on the platform. Personally there was some delay in getting an "invitation" to open my account. Tastyworks was not licensed to do business in all 50 states on day 1 (Jan 3rd) so many people experienced delays. Slowly they have gotten their paperwork done and are now licensed in 48 states. After I received my invite and completed the application several days passed before approval. After approval I downloaded the platform. At the present there is no mobile capability whatsoever. I believe there are plans to change that at some time. The platform seems to be very very simple. Customization is very limited. No futures whatsoever. I found that the Tastytrade portion was great. So if you like to watch Tom S several hours a day the platform is for you. I found the limits on the watchlist customization and very limited data to be difficult (and disappointing.) For example the watchlist removes futures each time you close the platform (futures for viewing not trading.) The watchlist becomes alphabetized and can not be customized. No bid ask SIZE is available. In short,many of the "features" that I took for granted (since every other platform I have ever used had them) are unavailable. Funding has its own set of issues. The clearing firm is Apex. I believe that Apex is the successor in interest to the infamous Penson. (I would recommend everyone be aware of what this means in terms of the safety of your funds.)

    I would guess that the platform might improve over time. I think right now its not really ready for prime time. Seems like they rushed it out.

    These are my initial impressions. (I thought it would be pretty good right out of the gate. I dont think it is and am pretty disappointed.)

    I'd be interested in what others think?

    Howard S
     
  18. I've opened a tastyworks account and have been trading with it for a week now. Here are my impressions:

    1. The fees are outstanding. I am now paying 1/4 the money in commissions that I was with TD. People rip on tastytrade for encouraging "trade small trade often," but tastyworks definitely makes it more than affordable to do so. If you like to "trade big, trade less often," more power to you. I like the profits I've been generating with brute force probabilities and I prefer not losing sleep over any particular trade.

    2. The Fills! The fills in tastyworks feel like butter. I've been getting filled a few pennies above mid-price (even in wider bid-ask spreads) constantly. It almost surprises me every time because I used to always have to creep closer and closer to the natural price. I know Tom said they were building the brokerage on top of a high frequency trading system, so I assume that is why (the computers are more anxious to take the bids). I'd like them to talk about this more on the tastytrade show.

    3. The software. Tom did state that the first release of the tastyworks platform was going to have the basics only, and they would build from there. That is probably why they are slowing rolling it out via invitation letters. So we are essentially beta-testers to a degree. The software seems to auto-update with more features everyday, so it is getting more robust at a rapid pace. If you only trade with tastytrade methodologies, everything you need is already there and it looks and feels great. If there are any glitches, you can always go on the web platform, (which used to be Dough).

    4. Switching brokerages is a pain. Wait to be approved. Wait for ACH verification. Wait for money to go through. Wait, wait, wait. It's worth it, but frustrating that in 2017 we still can't do something like this with our money in one day.

    Those are my primary reactions. So far, tastyworks has greatly exceeded my expectations.
     
  19. status1

    status1 Well-Known Member

    I was wondering from those who have opened an account there if there are any issues placing BWB trades ?
    Is it just as easy as the TOS platform where you can place any order combination without being locked into a certain order type ?
    Some brokerages have a problem accepting BWB trades or anything that is unbalanced
    That would be my only reason to transfer one of my accounts there
     
  20. I've placed several broken wing butterflies in tastyworks. I like to use the curve view, and just select "long butterfly" then drag one of the outside wings out further. Click send, and done. Once again, the fills are scary fast and liquid. I used to have to walk the price of BWBs way down before I'd get a fill (due to the combination of strike prices) . . . . but not with tastyworks--I hope it stays that way.
     

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