TastyWorks versus Charles Schwab - compare IRA, commissions, investing fees, trading tools, account differences, pros and cons. Which online broker is better?

Overview of Charles Schwab and TastyWorks

Are you an active trader looking for low-cost trades and top-notch software? Do you trade options as well as stocks? And do you need to trade outside of regular market hours? If you answered yes to any of these questions, you really need to consider the investment services of Schwab and TastyWorks. This article will try to discover which one is the better choice.


Broker Fees

Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Tastyworks $0 na $1.00 per contract ($10 max, $0 to sell) $0 $0
Charles Schwab $0 $76 ($0 to sell) $0 + $0.65 per contract $0 $0


Services

Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Tastyworks
Charles Schwab


Promotions

TastyWorks: $0 commissions on stocks and ETFs.

Charles Schwab: Make $100,000 deposit and get 500 commission-free online equity and options trades.



ETF’s, Options, and Other Investment Products

Exchange-traded funds are all the rage today with their passive management and low expense ratios. Well, Schwab and TastyWorks offers every single one that trades on a U.S. exchange (plus closed-ended funds as well). At both firms all ETFs are commission-free.

Option contracts are available at both TastyWorks and Schwab. During our research, we found more multi-leg strategies on Schwab’s software than on TastyWorks’. But TastyWorks does have the better-looking platform.

While futures contracts are hard to find at securities brokers, both companies in this survey do offer them. Even options on futures are available.

Because TastyWorks isn’t a traditional brokerage firm, it doesn’t offer any bonds, mutual funds, or annuities. Schwab actually goes a step further and operates an FDIC-insured bank where mortgages and refinancing offers are available.


Extended Hours

Because earnings releases and company announcements are often made outside of regular market hours, the ability to trade outside these times is vital if you’re trying to actually make money with your investing.

Both brokers in this survey realize this point, which is why they provide access to the stock market before it opens and after it closes. Schwab customers, for example, can trade for 1 hour and 30 minutes before the opening bell. The broker’s after-hours period starts 15 minutes after the closing bell and ends at 8:00 pm.

TastyWorks offers the same pre-market session as Schwab. Its after-hours session starts 15 minutes before Schwab’s does and closes 2 hours earlier.


Level II Data

Level I quotes display current bid and ask numbers. Experienced traders know that they need more than this information, which is why some brokers offer Level II data. These quotes provide information on the sizes of orders coming in and what venues are receiving them.

Schwab customers who place at least 10 trades per month qualify for Level II data. There’s also a window on the company’s desktop software called Market Depth. This provides limited information similar to Level II data, and there is no requirement for it.

TastyWorks unfortunately does not offer Level II information at any price.


Trading Software

If you’re an active trader, you really need the best software possible. Both brokerage firms in this investigation offer good trading tools, but they differ in important ways.

TastyWorks’ website doesn’t offer any trading capability. It is just used for advertising and account management. The broker does have a browser platform that offers simple charting, option chains, a watchlist, information on recent trades by TastyWorks customers, and an order ticket.

The software’s order form can be used to trade stocks and options, but not futures. There are no trailing orders, and direct-access routing isn’t included, either. On the plus side, extended-hours trades can be submitted through the browser system, and there are educational videos from sister company tastytrade.

The TastyWorks desktop platform has a similar interface as the browser system, but it provides more sophisticated charting and futures trading.


tastyworks Traders


Moving on to Schwab, we get website trading, and it’s very good. There is a trade bar plus excellent charting capability with tools. A browser platform called StreetSmart Central is able to submit orders for stocks, options, ETF’s, and futures. During our testing, we were most impressed with the software’s charting, which offers tick-by-tick price action.

There is also a desktop program called StreetSmart Edge. Offering more than the browser system, this is the company’s flagship software. We found direct-access routing, free streaming of CNBC, and very customizable charting.


StreetSmart Edge


Mobile Apps

Neither broker has neglected mobile trading. Schwab’s app comes with Bloomberg News at no cost. News articles are also on tap. During our trial, we found the app’s charting to be usable for trading purposes. A graph can be rotated horizontally, and technical studies can be performed.


Schwab App


The app can trade options and mutual funds. One of the best features is mobile check deposit.

Compared to Schwab, the TastyWorks app seems to underperform. It doesn’t have the same level of charting (there are no tools, for example), and there is no mobile check deposit feature, either. The order ticket has comparable features as Schwab’s.


tastyworks Mobile App


Margin

Trading on margin is one method that can be employed to increase return on investment (ROI). Both brokers in this study offer trading with borrowed funds.

At Schwab, the initial margin requirement is 50% of the total price of a stock. The maintenance drops to 30%. A stock priced below $3 cannot be traded on margin. For short positions, the initial is 50% for all stocks, and the maintenance is 30% for stocks priced above $16.66.

Traders at TastyWorks have the same 50% initial leverage, but maintenance is a lower 25%. For short positions, the initial stays the same, while maintenance goes up to 30%. Shorts stocks must be above $5, while long stocks must be priced at $3 or more.


Promotions

TastyWorks: $0 commissions on stocks and ETFs.

Charles Schwab: Make $100,000 deposit and get 500 commission-free online equity and options trades.



Recommendations and Judgment

If you want to trade on a desktop platform, we recommend Schwab over TastyWorks. StreetSmart Edge has more features than TastyWorks’ desktop system. For browser trading, it’s a toss-up.

New traders will probably be better off with Schwab as it devotes more materials to investment education, especially outside the realm of options trading.

Retirement savers will benefit from Schwab’s resources, such as its managed account services.

Futures and options traders can do well at either firm. TastyWorks does have an edge thanks to lower pricing.

We can recommend both firms for small traders, as neither company has any account minimums. And again, due to better commissions, TastyWorks is a better choice.


Charles Schwab vs TastyWorks Summary

TastyWorks has a few strengths, but in many areas it doesn’t quite match Schwab’s performance. Budget conscious investors will find TastyWorks more appealing thanks to lower commissions. Traders who want to see what other professional traders are trading should go with tastyworks.


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