Tastyworks Capped Commissions

[izzo70 22]

A quote from Tastyworks:

Starting tomorrow, on Jan 2nd, 2018, tastyworks is introducing capped commissions for large option trades. This means the most commission you will pay for any single leg option trade is $10* (plus clearing fees). That’s right, just $10* per leg!  Eighteen years ago, when we built thinkorswim, 100 option contracts to open and close was $300+. At the time, we thought $1.50 per contract was cheap. Today, the industry average per contract is about $.70 plus a small ticket charge. So, 100 option contracts today is approximately $150 to open and close at most firms. With tastyworks’ new rate schedule, the same trade will cost $10 in commissions to open, zero in commissions to close and a $20 clearing fee for a total of $30. Compare that rate to any other firm on the planet and remember how good our technology and content is as well. Fees for small options trades (10 contracts or less) stay the same. 

 

Edited January 1, 2018 by izzo70

[zxcv64 771]

I cannot seem to find this offer on their site. What I see is :

 

https://tastyworks.com/commissions-and-fees.html

basically, $1/contract to open, but zero to close, which is nice.

 

 

[izzo70 22]

@zxcv64 They just sent it to me in an email as they are my broker, so i thought i'd share with everybody.  It will probably be posted tomorrow when the offer becomes official.  On the technology side they are suppose to unveil an analyze tab that i hope exceeds TOS. 

Here is the full email for those who are interested: 

 

Hello, tastynation! 

To start off 2018 just right, we want to thank you for your show of unconditional support and irreplaceable loyalty for tastytrade and tastyworks. You are the reason we’re driving change to the financial industry. We’ve not only planned more of what you love, like more live tastytrade shows in 25 cities, more trading tools, more mind-blowing content, more new daily shows – but also stuff that will leave you thinking, “How’d they do THAT?” 

 

tastyworks introduced zero commissions to close trades on Jan 3rd, 2017. Starting tomorrow, on Jan 2nd, 2018, tastyworks is introducing capped commissions for large option trades. This means the most commission you will pay for any single leg option trade is $10* (plus clearing fees). That’s right, just $10* per leg!

 

Eighteen years ago, when we built thinkorswim, 100 option contracts to open and close was $300+. At the time, we thought $1.50 per contract was cheap. Today, the industry average per contract is about $.70 plus a small ticket charge. So, 100 option contracts today is approximately $150 to open and close at most firms. With tastyworks’ new rate schedule, the same trade will cost $10 in commissions to open, zero in commissions to close and a $20 clearing fee for a total of $30. Compare that rate to any other firm on the planet and remember how good our technology and content is as well. Fees for small options trades (10 contracts or less) stay the same. 

 

But we’re not done. As an added bonus, tastyworks will have twelve monthly drawings for funded accounts (minimum of $2,000) and each month, one customer will win free commissions for 5 years. And no, we haven’t lost our minds. We simply want to do something special and this is just the start.

 

On the technology side, tastyworks is releasing a new analysis tab, portfolio margin, options on futures, paper trading, an open API, a new scripting language and lots of new mobile features.

 

[zxcv64 771]

Thanks. I've emailed them already asking a couple of specific questions for traders like myself who reside outside the US.

[cuegis 683]

2 hours ago, zxcv64 said:

I cannot seem to find this offer on their site. What I see is :

 

https://tastyworks.com/commissions-and-fees.html

basically, $1/contract to open, but zero to close, which is nice.

 

 

Yes, but it looks like what they are saying is $1 to open , but, starting now, never more than $10 to open, even if you are opening 1000 options.

[cuegis 683]

So far, I have held out from opening an account with them.

But, I think this is the "straw" that is going to have to push me over the edge,and finally do it.

It looks like, all things considered, you are getting the most for your money here, at this point.

[wr200m 22]

having all these brokers compete on cost is a good thing. How much is the clearing fee on average does any one know?

[wr200m 22]

Just found out clearing fee is 10c per contract. It would take about 16 contracts per single leg to about break even and more to be more economic compared IB for larger trades assuming IB avg fee is 75c. Under the regular size it sounds like TT charges on avg 50c per contract ($1 to open and free to close). With the regular schedule do you pay clearing fees on top of the 50c?

[izzo70 22]

Fees are usually .14 or .15 cents per contract on open and close.  (I have been using them since Feb and have yet to see a .10 cent fee.  They may charge less for larger accounts but not sure) VIX is .79/.80 on open and close.

IBM 1 contract

For example: If you bought/sold to open a put in IBM it would be 1.00 commission + .15 fee = 1.15

To close it you would just be charged the fee of .14 cents 

Round trip cost would = 1.29 

IBM 20 contracts

If you bought/sold 20 puts to open in IBM it would be 13.00 (10.00 max commission + (.15 cents X 20 contracts = 3.00) 

To close it would be 2.80 (.14 cents fee X 20 contracts = 2.80)

Round trip cost would = 15.80

VIX 20 contracts

If you bought/sold to open 20 VIX puts it would be 26.00 (10 max commision + (.80 cents X 20 contracts = 16.00)  

To close 20 VIX it would be just the fees 15.80 ( Zero Commissions + (.79 cents X 20 contracts = 15.80)

Round trip cost =  41.80

This is how i understand it at present. Hope this helps!

 

Edited January 1, 2018 by izzo70

[izzo70 22]

Screenshots from activity page general, IBM, VIX examples:

IBM

VIX

Edited January 1, 2018 by izzo70

[Kim 7,943]

9 hours ago, izzo70 said:

Fees are usually .14 or .15 cents per contract on open and close.  (I have been using them since Feb and have yet to see a .10 cent fee.  They may charge less for larger accounts but not sure) VIX is .79/.80 on open and close.

IBM 1 contract

For example: If you bought/sold to open a put in IBM it would be 1.00 commission + .15 fee = 1.15

To close it you would just be charged the fee of .14 cents 

Round trip cost would = 1.29 

IBM 20 contracts

If you bought/sold 20 puts to open in IBM it would be 13.00 (10.00 max commission + (.15 cents X 20 contracts = 3.00) 

To close it would be 2.80 (.14 cents fee X 20 contracts = 2.80)

Round trip cost would = 15.80

VIX 20 contracts

If you bought/sold to open 20 VIX puts it would be 26.00 (10 max commision + (.80 cents X 20 contracts = 16.00)  

To close 20 VIX it would be just the fees 15.80 ( Zero Commissions + (.79 cents X 20 contracts = 15.80)

Round trip cost =  41.80

This is how i understand it at present. Hope this helps!

 

Thank for sharing.

For 1 contract, you would pay around 1.40-1.50 round trip with IB, so this is not too different.

But the $10 cap is definitely a game changer. Hopefully other brokers will follow.

P.S. To say "Compare that rate to any other firm on the planet" is not entirely accurate. Tradier has $40/month deal and RobinHodd has free trading - just 2 example. But Tom Sosnoff wouldn't be Tom Sosnoff without one of those remarks.

[jsndc 1]

@izzo70, thank you for this. Do you know if this will apply for multi-leg or just single-leg?  If you buy or sell a 20 contract spread, straddle, strangle, condor, etc. is the cap $10 for each leg, or no cap at all?

Edited January 2, 2018 by jsndc

[Maji 203]

2 hours ago, Kim said:

 But Tom Sosnoff wouldn't be Tom Sosnoff without one of those remarks.

You nailed it on the head!!!

I have an account with Tasty but I don't trade that big of an account to matter. However, this cap is a good thing for traders. Robinhood with their free trades are definitely making the discount option brokers try to do something different.

[cuegis 683]

They still only offer commodities FUTURES, not futures options (yet?).

That will be the game changer for me, as well over 50% of my trading is in that arena.

[cuegis 683]

9 hours ago, jsndc said:

@izzo70, thank you for this. Do you know if this will apply for multi-leg or just single-leg?  If you buy or sell a 20 contract spread, straddle, strangle, condor, etc. is the cap $10 for each leg, or no cap at all?

That was my question too!

[izzo70 22]

30 minutes ago, cuegis said:

They still only offer commodities FUTURES, not futures options (yet?).

That will be the game changer for me, as well over 50% of my trading is in that arena.

On the technology side, tastyworks is releasing a new analysis tab, portfolio margin, options on futures, paper trading, an open API, a new scripting language and lots of new mobile features.

[izzo70 22]

9 hours ago, jsndc said:

@izzo70, thank you for this. Do you know if this will apply for multi-leg or just single-leg?  If you buy or sell a 20 contract spread, straddle, strangle, condor, etc. is the cap $10 for each leg, or no cap at all?

Unfortunately it's only single leg.  So your 20 contract spread would cost 20.00 in commissions (10.00 max on each leg) and 6.00 in fees. (40 X .15 = 6.00) Plus you pay for the fees when you close it so approximately another 6.00.  Round trip cost = 32.00  Old price would have been 52.00.

[jsndc 1]

15 hours ago, izzo70 said:

Unfortunately it's only single leg.  So your 20 contract spread would cost 20.00 in commissions (10.00 max on each leg) and 6.00 in fees. (40 X .15 = 6.00) Plus you pay for the fees when you close it so approximately another 6.00.  Round trip cost = 32.00  Old price would have been 52.00.

Thank you izzo70, that is a very good deal.