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


Overview of Etrade and TastyWorks

We’re going to take a look at two brokerage firms that are similar in many ways, but nevertheless have some important differences: E*Trade and tastyworks. The latter isn’t as well known as the former, but it offers a different style of investing. Let’s see if one firm is clearly the outperformer here.


Broker Fees

Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Tastyworks $5 ($0 to sell) na $1.00 per contract ($10 max, $0 to sell) $0 $0
Etrade $6.95 $19.95 $6.95 + $0.75 per contract $0 $0


Services

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


Is Extended-Hours Trading Available at Either Broker?

Because important announcements are made outside of regular trading hours, stock prices tend to move significantly before the market opens and after it closes. If you want to maximum returns or prevent major losses, you have to be able to trade during these times.

E*Trade understands this, which is why it offers a pre-market session from 7:00, EST, until the opening bell. The company’s after-hours period lasts 4 hours. There is a half penny per-share surcharge on orders that execute during these special sessions.

tastyworks offers both pre-market (8:00 till 9:30 am) and after-hours trading (4:00 to 6:00 pm). Although tastyworks’ sessions are shorter than E*Trade’s, tasty does not impose any surcharges on extended-hours trades.


What About Options and Other Instruments?

Option contracts can be bought and sold at either brokerage firm. tastyworks customers can trade derivatives on a computer or mobile device. Besides puts and calls, there are about 7 multi-leg strategies integrated into its software. E*Trade offers call/put chains plus 9 strategies. Futures contracts are also available at either broker.

While the two companies are pretty similar in terms of derivative trading, they are worlds apart in other areas. For example, E*Trade clients have access to a large selection of mutual funds and fixed-income investments; while tastyworks fails to deliver any at all. Furthermore, E*Trade offers more than 250 ETF’s that are completely commission-free, while tasty offers zero.

As for account types, E*Trade has self-employed 401(k)’s, which tastyworks does not have. E*Trade also provides Coverdell Education accounts. tastyworks says it plans to start offering them in 2019.


Does Either Firm Offer Level 2 Quotes?

Yes, one firm does offer Level 2 data. It’s E*Trade. For some reason, tastyworks does not offer this vital information. E*Trade does require ten trades a month (or a quarter million dollars in assets) to qualify for Level 2 quotes. Or you can pay $99.95 every month for them.


Who Has the Better Software?

For some traders, this is the 64-million-dollar question. Active traders need the tools to manage their activities, and both companies in this investigation offer several choices.

E*Trade has built a website with trading capability. Missing is a trade bar, but we did like the site’s charting tools. A graph has several important features, such as company events, multiple display styles, comparisons, and technical studies.

The order ticket provides multiple order types and duration options. A handy calculator is able to convert a whole-dollar amount into number of shares.

If you prefer to trade on a platform, E*Trade offers two. The first is a browser system called Power E*Trade that has several nice features, including advanced charting, Bloomberg video news, portfolio analysis tools, and more.


Etrade Pro


E*Trade Pro is the broker’s desktop system. It comes with direct-access routing, sophisticated charting, and advanced option tools. The broker does impose trading minimums to access the program, however.

tastyworks does not impose any fees or minimums to access its desktop software, although the platform doesn’t offer the same powerful features that can be found on E*Trade’s desktop program. For example, there is no direct-access routing or Level II quotes; and E*Trade’s platform is more user-friendly.


tastyworks Traders


tastyworks also offers a browser platform. It is quite comparable to the desktop system with a similar interface. One difference is that the browser doesn’t have the same level of charting capability. Another is that the desktop software can trade futures contracts, but the browser cannot.

The tastyworks website has no trading capability at all, and this puts the broker at a significant disadvantage compared to its rival.


And What About Mobile Trading?

Each broker-dealer in our survey offers a mobile app, and in fact, E*Trade offers two. The first is a Power E*Trade platform modeled after its desktop cousin. Although it’s designed for trading, it has less impressive charting than the second app. Using both apps, we found video news, Level II data (unusual for a mobile device), watch lists, and option chains. Other great features include check deposit and Touch ID.


tasty works vs Etrade


The tastyworks app lacks mobile check deposit but it does have Touch ID. A really nice trade ticket is incorporated into the platform that offers easy-to-read fields for duration, price, and order type. A profit & loss graph is displayed on the order ticket, a nice feature that E*Trade fails to deliver. tastytrade video news is on tap as well, but there is no independent news channel, as with the E*Trade app.


tastyworks Mobile App


Promotions

TastyWorks: Open account and pay no commission when selling stocks/ETFs/options.

E*Trade: At E*TRADE, get $6.95 trades + 65₵ per options contract.



Can I Trade on Margin?

Trading on margin is one way to amplify gains, and traders at both brokers can do this. E*Trade offers 2:1 leverage for stocks over $3 as initial margin, and maintenance is a higher 4:1. Here too, the price floor is $3. For short positions, the minimum rises to $5, initial margin stays at 2:1, and maintenance increases to 30%.

tastyworks customers must put up 50% of a short stock’s value at the commencement of the trade. The maintenance figure is 30%. Also, the stock must be priced at $5.00 or higher. Long equity positions qualify for a very low 25% requirement for maintenance, although the initial figure is 50%. The price floor is $3.


Our Recommendations

Now it’s time for the judgment. We recommend E*Trade for browser and desktop trading. Its software is more user-friendly than tastyworks’ and provides more tools.

With direct-access routing and Level 2 quotes, E*Trade is definitely the better choice. High-volume traders can also receive a discount on commissions, though not as low as what TastyWorks is offering to everyone.

For options, either company would be a good choice, though TastyWorks has a better commission schedule.

Small accounts will do well at TastyWorks bacause of lower commissions. Neither company imposes an account minimum or inactivity fee.


Etrade vs TastyWorks Summary

tastyworks has created a new style of investing, that will appeal to active traders who want low pricing and to see what other professional traders are trading.


Open TastyWorks Account


Open TastyWorks Account

Open Etrade Account


Open Etrade Account


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