Choosing an online broker that caters to your financial needs can be a daunting task. With numerous options available in the market, this article aims to simplify your choice. Today, we will delve into an in-depth comparison of two prominent platforms, namely Tastytrade and Thinkorswim, to help you decide the best option broker for your options trades.
Introduction to Tastytrade and Thinkorswim
Tastytrade and Thinkorswim, a trading platform by TD Ameritrade, are two renowned online brokers with a strong reputation in the financial market, special for options trades. Both platforms offer advanced trading tools and are known for their low-cost offerings. Despite their similarities, there are crucial differences that could make or break a platform depending on the investor's needs and expectations.
Comparing Broker Fees
A significant factor that influences a trader's decision when selecting a broker is the associated fees. Both Tastytrade and Thinkorswim offer competitive pricing structures. For regular stock trades, both charge $0. For options, Tastytrade charges $0.50 per contract, while Thinkorswim charges $0.65. Tastytrade charges $1.25 per futures contract, and TD Ameritrade charges $2.25. The platforms also do not impose inactivity or maintenance fees.
Available Investments
Tastytrade provides trading options for stocks, ETF's, closed-end funds, options, cryptocurrencies, and futures. It does not offer forex, mutual funds, bonds, or over-the-counter stocks. On the other hand, Thinkorswim allows trading in forex, futures, bitcoin futures, ETF's, and closed-end funds. It also offers bond and mutual fund trading on the TD Ameritrade website.
Research and Education
For traders looking to sharpen their skills, both Tastytrade and Thinkorswim offer extensive educational resources. Tastytrade provides free tutorials and webinars as well as live streaming of its TV shows. The platform also has a blog that keeps users updated on the latest market trends. On the other hand, Thinkorswim offers advanced trading tools such
Trading Platforms and Tools
When it comes to trading platforms, Thinkorswim provides a desktop-only platform packed with professional-level features like direct-access routing, complex orders, and nearly 400 technical indicators. Tastytrade offers a browser platform and a desktop system, both with a simple interface and basic charting tools.
The mobile trading experience on Thinkorswim is more advanced, offering robust charting with the same technical studies as the desktop platform. Tastytrade's mobile app offers a similar interface to its desktop and browser systems but lacks advanced features.
Margin Trading
Both Tastytrade and Thinkorswim offer margin accounts. Tastytrade's margin rates vary from 8% to 11%, while TD Ameritrade charges anywhere from 12.75% to 14.75%. Thinkorswim requires $125,000 in assets to qualify for portfolio margin, while Tastytrade has a $175,000 requirement.
List of Pre-built options strategies
Tastytrade’s and Thinkorswim pre-built options strategies are designed to support opening options trades with ease. Standard ones like Long and Short Verticals, Calendars, Iron Condors, Butterflies, to name a few.
Other Services
TD Ameritrade provides additional services like automatic investing in mutual funds, banking tools like check writing and a Visa debit card, and Individual Retirement Accounts. Tastytrade also offers Individual Retirement Accounts but lacks banking services and automatic investing.
Customer Support
When it comes to customer support, both platforms have adequate options. Tastytrade offers customer service via phone, email, and live chat. Thinkorswim provides 24/7 customer service through its dedicated Trader Support Center, as well as by phone and email. It also has an extensive library of articles addressing common trading issues.
Who Should Use Tastytrade and Thinkorswim?
Tastytrade is best suited for highly active traders engaged in derivatives trading, particularly options and futures. It has a complex layout, designed for high-volume and high-speed trading. It is also good for both advanced traders and beginners.
Thinkorswim is best for more experienced traders. It provides advanced charting and order types, as well as trading in forex, futures, and bitcoin futures. Its portfolio margin feature is ideal for those looking to increase their leverage. The research tools available make it a great choice for stock pickers and day traders. Additionally, the extensive educational resources offered by TD Ameritrade are
Thinkorswim, on the other hand, caters to active, hands-on investors with experience. It offers a more comprehensive investment offering and a wider range of tools to monitor the market.
Pros and Cons Tastytrade
Pros:
• Low trading fees
• Easy-to-use platform
• Extensive educational resources
• Supports cryptocurrency trading
Cons:
• No banking services or automatic investing
• Limited range of investments
Pros and Cons Thinkorswim
Pros:
• Comprehensive investment offering
• Advanced charting and order types
• Portfolio margin available
• Extensive educational resources
Cons:
• High trading fees for margin accounts
• Complex platform not suitable for beginner traders
Conclusion: Tastytrade vs Thinkorswim
In conclusion, both Tastytrade and Thinkorswim have their strengths and cater to different types of investors. TD Ameritrade's Thinkorswim shines in its comprehensive offerings, advanced tools, and superior educational resources. Tastytrade, with its lower costs and focus on active trading, is a good choice for frequent options and futures traders.
Remember, the best broker for you depends on your personal trading needs and financial goals. We hope this comparison helps you make an informed choice between these two dynamic platforms.
Additional Information
When exploring these platforms, it's essential to examine their educational resources, trading tools, and fees. Keep in mind that while both have strong features, their suitability depends on your individual trading style and requirements. As with any financial decision, conducting thorough research and considering your options carefully is paramount.
