tastyworks is a popular US-based trading app that focuses mainly on trading options and futures. It offers low commissions and a strong set of educational tools for seasoned derivatives traders, causing many Canadians to wonder when it will make its way across the border.
Luckily, tastyworks seems to be brewing up a plan to move its services to Canada in the near future. In the meantime, there are several suitable substitutes that you can use to trade options and futures while you wait for tastyworks to make the transition.
What is tastyworks?
tastyworks is a US-based trading app that lets US residents trade stocks, ETFs, options and futures. This platform is somewhat complicated to learn as it’s primarily designed for trading options and futures, which are derivatives of stocks. This means that they derive their value from the movement of stocks, and you won’t actually get ownership of any shares in a company.
The concept of derivatives and how best to trade them can be a difficult thing to wrap your head around. This makes for a steep learning curve, which is why this platform isn’t the best fit for beginners. That said, one of the features tastyworks is best known for is its wealth of research options and educational materials specifically related to options and futures trading. It also offers commission-free trades, which sets it apart from its competitors.
Is tastyworks available in Canada?
Unfortunately, tastyworks is not currently available in Canada. That said, it seems the company has plans to cross over the border in the near future. Its success in making this much-anticipated move will largely depend on whether it can jump through the necessary regulatory hoops in Canada.
The promise of movement but the lack of a set-in-stone arrival date is likely only semi-heartening news for investors who are ready to scale up into low-cost options and futures trading. That said, there are some suitable alternatives that you can consider until this platform arrives in the Great White North.
When will tastyworks come to Canada?
It’s anticipated that tastyworks Canada will exist at some point in 2020. At this time, the company seems to be waiting for final approval from Canadian financial authorities before it can make the big move official. This means that Canadian investors could have access to lower commissions for trading options and futures in the very near future.
Why is tastyworks so popular?
tastyworks is popular in the US because it offers low commissions for trading options and futures. It’s aimed towards active investors and provides rigorous educational resources and research tools to help investors make informed decisions about what options to trade and when.
The mobile app that tastyworks offers is well-reviewed and has key analytics built into its interface so that you can see how much profit you’re likely to make as you adjust different variables (such as the strike, size or expiry date of your trade).
The downside of this platform is that it doesn’t put a major focus on other types of trades like stocks or ETFs. It also doesn’t offer the choice to trade in bonds, GICs or precious metals. The app can also be difficult to master if you’re new to trading options or futures.
To make comparing even easier we came up with the Finder Score. Trading costs, account fees and features across 10+ stock trading platforms and apps are all weighted and scaled to produce a score out of 10. The higher the score the better the platform - simple.
Interactive Brokers (IBKR) offers a number of different investment types, with a couple of platforms dedicated to options and futures trading. The main platform is called OptionTrader, and offers a wealth of research tools and market data to guide your trades. You can also use the IBKR Lite and IBKR Pro platforms for options trading if you want to dabble in other types of investments as well.
The pricing for options trading is structured around a tiered commission model. The amount you’ll pay will depend on the volume of trades you make each month. For the lowest trade volume, you’ll pay $1.25 per contract with an order minimum of $1.50 For the highest volume, you’ll pay $1 per contract with an order minimum of $1.50
CIBC Investor’s Edge is a bank-owned platform that offers options trading for fairly reasonable prices. This platform also has an extensive array of educational resources for investors that want to get more familiar with options and futures trading. These include webinars and specialized research tools built into the trading platform.
Due to the inherent risk involved in options trading, CIBC requires you to request option trading privileges before they’re added to your CIBC Investor’s Edge trading account. For a general account, you'll pay $6.95 per trade (+$1.25 per contract) Active traders get a $2 discount on the base commission for every trade, and students can also qualify for special discounts.
Pros
Cons
Lowest commissions for bank-owned platform
Wealth of research options and educational tools
Accessible customer service
Special discounts for active traders and students
Annual account management fee of $100
Less competitive commissions than some privately-owned brokerages
Questrade offers low commissions for options trading provided that you qualify as an active trader. This means you execute over 150 trades per month on its platform and are well-versed in trading options. If you don’t fit these criteria, Questrade probably won’t be the best fit for you since the commissions it charges for its standard account are higher than the industry average.
As an active trader, you’ll pay a fixed or variable rate for options trading with Questrade. Fixed-rate pricing will cost you $4.95 per trade plus $1 per contract. You’ll pay a little bit more for variable-rate pricing, with base commissions starting from $6.95 per trade plus $1 per contract. With a standard account, you’ll pay a flat rate of $9.95 per trade plus $1 per contract.
Pros
Cons
Low commissions for active traders
Low account management fees
Minimum $1,000 account balance
Poorly-reviewed mobile app
How do I sign up with one of these services?
If you want to sign up for an account with any of the investment platforms listed above, you’ll just need to follow the steps below:
Use the online application to provide personal information like your name, email address, proof of ID and relevant documents.
Review and submit your application.
Get verified and load funds into your account to start trading.
Bottom line
tastyworks is a popular US-based app that will hopefully make its way to Canada at some point in 2020. In the meantime, there are several reputable trading apps you can use to trade options and futures. The commissions for these platforms are typically higher than the pricing tastyworks offers, but they’re still affordable alternatives that you can use while you wait for this service to arrive in Canada.
Frequently asked questions
tastyworks plans to move to Canada at some point in 2020, but it’s currently only licensed to sell securities in the US. That said, you can take advantage of a handful of platforms designed to trade options and futures for reasonable commissions in Canada. These include Interactive Brokers, CIBC Investor’s Edge, Questrade and Virtual Brokers.
The trading platform that’s most similar to tastyworks is Interactive Brokers. This is because it doesn’t charge a base commission for trading options, which means you’ll only have to pay a small price per contract.
You may be able to download the app if you have your Google Play or App Store settings set to the US. That said, you won’t be able to create a tastyworks account unless you’re a US resident.
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.
Claire Horwood was a writer at Finder, specializing in credit cards, loans and other financial products. She has a Bachelor of Arts in Gender Studies from the University of Victoria, and an Associate’s Degree in Science from Camosun College. Much of Claire’s coursework has focused on writing and statistics, with a healthy dose of social and cultural analysis mixed in for good measure. In her spare time, Claire enjoys rock climbing, travelling and drinking inordinate amounts of coffee. See full bio
Check out the pros and cons of BMO’s self-directed trading platform in our InvestorLine review.
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