Tastytrade & Tastyworks Review: Pros, Cons, Fees & More
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Tastytrade Review: Tastyworks Options Trading Broker

Tastytrade & Tastyworks Review: Pros, Cons, Fees & More

Tastytrade makes things unnecessarily complicated. They keep negative delta (in a bull market) and encourage traders to 'trade often' even if it means allocating capital to riskier trades. Tastytrade encourages people to 'scalp' futures, which have neither a volatility nor a theta component. Day trading futures will likely lead to substantial losses. Additionally, Tastytrade has granted access to their audience to questionable characters, including Tim Sykes (failed hedge fund manager and known huckster), Karen Bruton (convicted of fraud by the SEC, lost $50 million of investor capital and barred from the industry) as well as Jacob Wohl (charged with a felony by the State of California).

Course Provider: Organization

Course Provider Name: Tastytrade / Tastyworks

Course Provider URL: https://www.tastytrade.com/tt/

Editor's Rating:
2

Tastytrade Review

This blog post will share my experience and provide a Tastytrade review as well as a review of tastyworks.

I recently did a video about why I believe that Kirk Du Plessis from Option Alpha doesn't make money by tradingwhy I think he's a "wolf in sheep's clothing" and, in my opinion, a borderline fraud and scam (blog post here: as well about my Option Alpha Review)

You can also watch evidence of Option Alpha's possible fraud and scam 

I mentioned in the video that Kirk mainly trades ETFs and iron flies and I don't believe that he makes money or if he does, it is just a small amount.

I also think that most of his beginner options trading students, especially those who have account sizes of under $30,000 dollars are NOT profitable.

This review will discuss both Option Alpha while also providing insight (and my opinion) about TastyTrade & Tastyworks.

Tastyworks and
Tastytrade are different from Option Alpha.

Tastyworks is the online brokerage.

Whereas Tastytrade is an education and options trading education provider.

I've spoken to both Tom Sosnoff and Tony Battista and I respect them tremendously.

Tom Sosnoff is worth ~$200 MILLION dollars because he's built legitimate businesses.

He works hard and deserves to be rich. 

He's around 60 years old and he's built up businesses over the past 20+ years.

Tony Battista is also very reputable, he was a floor trader with years of experience.

Also, when I email both Tom and Tony, they always email me back within 24 hours - that's fantastic!

Tastytrade provides very valuable options trading content.

However, there are issues that I have with the platform, broker & the trading education.

Read on to learn more about my personal experiences which motivated me to write this Tastyworks & TastyTrade review.

Options Trading with Tastytrade & Tastyworks: PROs

  • A trading platform with incredible videos to help you learn options trading
  • Tastytrade doesn't encourage you to trade verticals, which is great because verticals & spreads reduce the amount of premium collected and limit your flexibliity when managing positions
  • They don't encourage you to sell ETFs, instead they encourage you to sell specific underlyings
  • Tastyworks is a low cost brokerage that is (in my opinion) superior to Robinhood

Tastytrade review: Best Resources to Help You Make Money Trading Options

Is Tastyworks safe?

Yes, Tastyworks is a reputable broker founded by Tom Sosnoff, who created ThinkorSwim.

Besides my YouTube videos, there are a few other good resources for you out there.

Regarding education, Tastytrade is, overall, very good .

Another resource is Option Alpha, which I believe is adequate because the production value on Kirk Du Plessis' videos and podcasts are good.

However, I think that Option Alpha's strategy is not optimal and I don't think many traders will make money by following him.

Tastytrade, on the other hand is really good. They have incredible videos that you can learn from.

If you watch my YouTube videos and those from Tastytrade, then you will have a really good understanding of how to make consistent profits by trading options​ and selling option premium.

But, remember, you also need experience and have to make good decisions.

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Tastyworks & Tastytrade Review: CONs

TOO RISKY. 

With Tastytrade / Tastyworks, you are taking too much risk because they encourage you to "trade small and trade often".

While I agree that you should always trade small, I believe that "trading often" leads to having a lot of small positions in too many underlyings.

Tom Sosnoff and Tony Battista will encourage you to look for underlyings that have very high Implied Volatility (IV) rank.

When you scan for IV rank, you are not necessarily discerning between a Tesla, which can fall 30% in a week, versus a more stable underlying.

They are telling you that the quality of the underlying is less important that the IV Rank, which I disagree with. 

Also, the Tastytrade methodology does not discern between opportunities. They view each trade as equal and do not allocate more capital towards your best opportunities.

Additionally, Tastytrade encourages its followers to trade calls and they fail to adequately address the ​mental anguish and stress from rolling and managing bad positions.

Take the BEST options trading education course and become a profitable trader

Regardless of whether it's Snapchat (SNAP) or Twitter, Tastytrade mostly cares about high IV (and liquidity) to maximize the amount of premium that you receive.

However, despite both SNAP and Facebook having high IV rank and high liquidity, there is a huge fundamental difference between them.

SNAP is a dying product, whereas Facebook is much more stable. 

Facebook, with Instagram, is gaining users and gaining market share.

The point here is that NOT ALL STOCKS / UNDERLYINGS WITH HIGH IV RANK & HIGH LIQUIDITY DESERVE TO BE TRADED.

Additionally, I can tell you that there have been numerous occasions where Tom has LOST TRACK and forgotten about some of his positions. 

You may say, "Well yeah, he's producing a show, hours of content, running a company..", and that's true do YOU want to trade 50 positions and become so overwhelmed with your options positions that you lose track?

So while Tom Sosnoff is very busy, I believe that he has lost track of his positions because he trades too many underlyings.

If you have a $10,000 account and you scan based on IV Rank and find Wynn Resorts, then that's not nearly as good a stock as JPM.

Wynn has fallen from ~$200 to $100, that type of volatility will crush options sellers.

In this Tastytrade review, I keep repeating that Tastytrade makes little discernment between the quality of the underlying apart from IV Rank and liquidity.

With your money, you should care about being involved in the best stocks that provide the ​highest probability of profit and success.

Tastytrade does not distinguish between the quality of the underlyings.

And, I repeat, there have been numerous occasions where Tom has admitted on his show that he has lost track of trades.

He likely didn't pay close attention to it because he trades too many securities.

He probably has positions in like ~70 securities at a time.

And even if his account size is $200 million, that's too many!

You simply can't keep track of your positions when you have so many.

I only have positions on five or six securities at one time yet he trades ~70.

Updated Tastytrade Review Video (Posted in August 2019)

Tastytrade Review: Keeping NEGATIVE DELTA

Tastytrade is very biased towards keeping negative delta.

Negative delta means that you would be short call options and make money when the market falls. You're essentially betting against the market.

By doing this, you're hedging your account against the stock market falling violently like it did in February and December of 2018.

I completely disagree with this strategy because I think that you are sacrificing about 20% of your gains every single year.

And while there will definitely be market corrections, I can ride out those corrections a lot easier by making an extra ~20% a year.

When you earn an extra 20% a year you're effectively doubling your account size every 3.5 years.

If at the end of 10 years I lose 30% on my total principal and account value because of a market correction, my total account size would still be much larger because I didn't have that negative delta dragging my returns down.

TRADING STRADDLES AND STRANGLES

The next item that I disagree with in this Tastyworks and Tastytrade review is that they encourage you to trade straddles and strangles.

I believe that trading straddles leads to too many adjustments.

Strangles should only be traded opportunistically (because anytime you sell a put, it's NOT a good time to sell a call).

However, I want to compliment Tastytrade because they don't encourage you to trade spreads or verticals, which I agree with because verticals reduce your premium and reduce your freedom when having to manage a position.

Tom says that about 60% - 70% of his positions tend to be naked positions (I agree with this).

I definitely don't believe that vertical credit spreads represent the best trading strategy for many traders because it encourages people to increase their position size and trade too many contracts.

Vertical credit spreads decrease the amount of premium received and it also takes away a lot of your flexibility because you can't easily roll and manage that position.

From my experience the probability that the call side of those straddles and strangles will be tested is about two or three times more than the put side.

Any time you have a position that's tested, it will be stressful. You should NEVER enter a trade with the expectation of having to manage or roll it.

Also, when you trade a straddle, you are selling an at-the-money call, which has a high likelihood of being tested.

Conveniently, as the owner of Tastyworks, they say, "Hey, no problem. Just roll up the untested side."

But, who has time for that?

A lot of traders are working full-time.

 You don't want to sell an at-the-money straddle, it simply requires way too much monitoring, even if you set a GTC limit closing order at 25% of the premium received.

You also don't want to have to make endless amount of adjustments and chase that security.

Do I think that Tom makes money in the stock market? 100%, yes.

Do I think that Kirk du Plessis from Optionalpha.com makes money in the stock market?

I'm not sure.

But, do I think that the Tastytrade options trading strategy is the best strategy that people should have? I definitely do not believe that.

I believe our Strategy is better and safer, and you can take the options trading course here.

You should care about maximizing the amount of premium you receive and only enter the best trades with the highest probability of success.

High IV, days to expiration and other contributing factors are priced into the premium that you receive when you make the trade.

Whenever you make a trade, the most important question is always:

"Am I being compensated for the risk I am taking?"

For example,  "If I sell this put on Facebook that expires in 6 weeks, do I feel comfortable receiving $2.50 worth of premium for selling that $185 put? Or do I believe that the risk is too high?"

That is the only question that you should ask yourself.

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Tastytrade Warning: Karen the Supertrader

There are, in my opinion, a few other red flags about Tastytrade.

1) They have had Tim Sykes (who, in my opinion, is a scam artist) on their show multiple times.

Providing Tim Sykes with a platform and granting him access to the Tastytrade audience is a red flag

2) Tastytrade has made Karen Bruton, or Karen the Supertrader,  a celebrity.

In fact, in July 2019, they invited Karen Bruton to their "Geeks on Parade" seminar. You can watch her speak by clicking this link: Karen Bruton / Karen the Supertrader Tastytrade

The problem is.... Karen was charged with fraud, paid a $1.5 million dollar fine.

Here is an extract from the SEC complaint: https://www.sec.gov/litigation/complaints/2016/comp-pr2016-98.pdf

E. The Fraudulent Trading Scheme

58. In October and December 2014, the Funds experienced significant trading losses due to volatility in the financial markets.

59. In response to these enormous losses, beginning in November 2014 and continuing almost every month to the present, Defendants entered a series of trades (“Scheme Trades”) in the accounts of the HI Fund and the HDB Fund that had the purpose and effect of avoiding realization of the losses.

More information about the $1.5 million fine is here: SEC Fine of $1.5 million

The SEC handles civil complaints, it's possible that the SEC will refer the case to the DOJ for criminal prosecution.

Most importantly: I'm very surprised that Tastytrade continues to promote Karen the Supertrader as a successful trader when all the signs point to her not being successful.

How to Trade Options Easily

If you want to learn about trading options then following Tastytrade is wortwhile but if you want to maximize your profits, you should become an alerts member.

You can also subscribe to our options trading education course. It is the best options trading education course available.

It doesn't overwhelm you with extraneous information. It doesn't require you to log into your account and scan underlyings four or five times a day.

It doesn't require you to make a lot of adjustments like Kirk Du Plessis from Option Alpha.

Tastytrade encourages you to make a lot of adjustments. When you're selling straddles, you will have to make adjustments.

Thankfully, with Tastytrade, they don't encourage you to sell on ETFs that often.

They do encourage you to sell specific underlyings, which is better than trading ETFs (which is a criticism that I have of Kirk du Plessis).

During a bull market, you're better off trading the long side. 

When we enter a bear market, if you want to switch to the short side, then that is a prudent decision.

For example, I made over a hundred thousand dollars in February of 2018 by selling calls on Amazon.

Why did I make this decision?

Because the market shifted and the market trend changed.

I'm not trying to predict future price movements. If we enter a bear market, I am going to sell calls.

But, I don't want to consistently sell calls and have that act as a drag against my returns.

Finding the Best Options Trading Platform / Broker Tips

  • Choose the best trading platform. You don't want to log into your account multiple times and incur the stress of having a losing position. 
  • check
    Be stress-free. You do not want to have to make a large number of adjustments when selling premium. Making many adjustments is not a good strategy.
  • check
    Reduce transaction fees. You don't want a pay high fees to your trading platform. Find the best online brokerage that will help you save and make more money.
  • check
    Account size – I highly recommend Tastyworks as an options trading broker and platform if you have anywhere from $5,000 to $10,000 dollars.
  • check
    Sign up for Trade Alerts – Receive real-time trade alerts so that you maximize your profits and minimize your mistakes. We have a trial offer of $19 for 7 days.

"Am I being compensated for the risk I am taking?"  That is the only question that you should ask yourself.

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TastyWorks Review: Exchange Fees

TastyWorks has very high exchange fees.

They pass through their exchange fees and charge around 14.5 cents per option contract.

That's about 6x - 7x more than I pay with Etrade (E*trade).

TastyWorks charges a maximum of $10 per leg, but there's an additional ~14.5 cents per contract in exchange fees.

I pay Etrade $3.95 per trade plus 10 cents per contract (including all exchange fees)

Even though Tastyworks says that they are a low cost broker, their pass-through of exchange fees can make it more expensive than others. 

Their overall commissions, when you factor in the exchange fees make it more expensive than what I pay with Etrade.

Also, is Tastyworks paper trading available?

Does Tastyworks offer portfolio margin?

Unfortunately, as of August 2019, Tastyworks does not offer papertrading and it also does not offer portfolio margin.

Tastyworks Sign up: Free Trade Alerts

Many of my students use Tastyworks.

Use this referral link when signing up or opening a new account:

New Accounts:

https://start.tastyworks.com/#/login?referralCode=7R6QHPKFNC

For Existing Accounts:

Visit: https://manage.tastyworks.com/index.html Enter 7R6QHPKFNC on the bottom of the page where it says, "Did someone refer you? Enter their link or code below"

You must fund your account with at least $2,000 to be eligible for the free week of alerts or the free 10-minute call.

Also, you must be located in the United States. 

Please email me once it's done so that I can keep an eye out. TastyWorks sends me an updated list every 2 weeks.

My Conclusion on Tastyworks & Tastytrade Review

Overall, I recommend Tastyworks.

A lot of my students use this trading broker and the Tastyworks platform.

I find the visual interface annoying, and it's very slow to enter trades, however many of my students enjoy Tastyworks and Tastytrade.

I actually trade a small account with Tastyworks (watch this video about how I'm up ~75% in 2019 in my small Tastyworks account).

Tastyworks vs. Robinhood

I also think that Tastyworks is better than RobinHood, so I highly recommend Tastyworks as a trading platform and online broker if you have under $20,000.

I wrote a blog on how to choose the best options broker that you'll find useful.

If you want to maximize your returns and minimize your mistakes, you should sign up below and become a member of BestStockStrategy.com.

Thank you for reading this Tastytrade Review 2019 post and if you have any questions let me know in the comments section below.

Tastytrade & Tastyworks Review: Pros, Cons, Fees & More

Tastytrade makes things unnecessarily complicated. They keep negative delta (in a bull market) and encourage traders to 'trade often' even if it means allocating capital to riskier trades. Tastytrade encourages people to 'scalp' futures, which have neither a volatility nor a theta component. Day trading futures will likely lead to substantial losses. Additionally, Tastytrade has granted access to their audience to questionable characters, including Tim Sykes (failed hedge fund manager and known huckster), Karen Bruton (convicted of fraud by the SEC, lost $50 million of investor capital and barred from the industry) as well as Jacob Wohl (charged with a felony by the State of California).

Course Provider: Organization

Course Provider Name: Tastytrade / Tastyworks

Course Provider URL: https://www.tastytrade.com/tt/

Editor's Rating:
2

About the Author David Jaffee

I (David Jaffee) help people become consistently profitable traders while minimizing risk. I graduated from an Ivy League University and worked at some of Wall Street's most successful investment banks. Subscribe to my YouTube channel for valuable videos - BestStockStrategy YouTube Channel​. Finally, if you're looking to Land a Finance Job, then I've put together the best step-by-step course at LandaFinanceJob.com. My personal website is DavidJaffee.com.

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Leave a Comment:

11 comments
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foloren torium says February 11, 2019

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Reply
    David Jaffee says February 11, 2019

    thanks

    Reply
paul korn says January 27, 2019

Please post your current brokerage statement. Thanks. Looking forward to seeing it.

Reply
Vijay Kumar says January 25, 2019

Hlo
Your all content are unique form other site thanx you for sharing your all experience with us

Glad to read your article

Hope you are enjoying the day
-vj

Reply
    David Jaffee says January 26, 2019

    Thank you

    Reply
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