“For years I’ve called it a crock of s***,” says Tom Sosnoff, creator of tastytrade, the fastest growing online financial network in the world. Railing against what people call ‘financial literacy,’ Sosnoff adds, “[that’s] just teaching people to balance your checkbook or, you know, Suze Orman, or whatever–I don’t give a rat’s a** about that stuff.” 

Sosnoff is not your average, off-the-street shmo spouting off. He served as one of the original OEX floor traders in the S&P 100 pit; acted as a market maker at CBOE for over 20 years; built thinkorswim, one of the biggest options trading platform in the world (sold to TD Ameritrade for $750 million); and co-launched tastyworks, named Best Online Broker for Options Trading by Forbes (June 2021) and recently acquired by IG Group for $1 billion. Sosnoff continues: “There’s no way you can watch CNBC and become any kind of a strategist, or no way you can watch Bloomberg and know anything more than enough to get yourself into trouble.”¹

The general public seems to understand this and have consequently developed a considerable fear of managing their own money. In a 2017 survey, 61% of adults said they found investing in the stock market “scary or intimidating.”² And who can blame them? The world of finance is chock-full of jargon and abbreviations arguably designed to be confusing. The general sentiment when this kind of language transmits through the airwaves is: “What the h*** is the Dow Jones and why must I hear about it?” Rather than dig into what seems like an impossibly complex domain, many seek out someone deemed an expert in money management and put their trust in that person to deal with their investments instead. 

Putting aside an absence of accountability in results and a real lack of incentive (money managers are paid upfront), the biggest issue with contracting someone else to manage your portfolio is that no one in the history of the world has found a way to accurately predict the stock market. The SPIVA U.S. Persistence Mid-Year 2020 Scorecard--which works to differentiate luck from skill in this field--found that “regardless of asset class or style focus, active management outperformance is typically short-lived, with few fund managers consistently outperforming their cohorts.” Essentially, you might as well put your money in some ETFs and let it slowly accrue value over decades, rather than pay someone to guess which way the wind will blow. But Sosnoff and his team at tastytrade think they have some better ideas. 

“Nobody knows anything,” is one of the main tenets of the ‘tastytrade way,’ a series of trading mechanics and guidelines created through exhaustive quantitative work done by tastytrade’s in-house research team. Sosnoff says, “...success finally comes only when you are able to accept the market’s randomness...”² The tastytrade philosophy says that given this total unpredictability, you can still set yourself up for statistical success, which will inevitably play out if you set the probabilities in your favor over and over again. Sosnoff adds that “consistency and predictability can be had when [you understand] how important a role the law of large numbers plays. This is where tastytrade’s motto comes into play: “Trade small, trade often.” 

Since the network first went live ten years ago, tastytrade has given birth to a number of affiliates, all collectively working to deliver the education, strategy, and confidence someone might need to manage their own money, as well as intuitive tools and technology to put those things into practice. Sosnoff says, “What I see is the same small group of people consistently making money on their trading and investments, and everybody else not. Why?....What we’re doing at tastytrade is trying to get everybody else profitable by showing them the logic and strategies that can lead to successful trading.”⁴ And Sosnoff has been insistent from the start that all content be completely free to the public, with all services costing as little as would be sustainable for the business: “We wanted to prove that a goodwill model in finance could work. Nobody ever tried it before us.”³ 

The tastytrade Ecosystem

If you’re looking for a fun and accessible way to begin (or continue) engaging with your money, a great place to start could be one of the components of the tastytrade ecosystem. Take a look to see which one might be the right fit for you.

tastytrade - For those eager to learn

The longest-standing purpose of tastytrade has been free educational content in the form of: 

• An online network streaming nearly 100 shows, 40 of which air live, 8 hours a day, 5 day a week

• Millions of hours of archived segments, including several “Where Do I Start?” series for beginners

• An interactive “Learn Center” for newbies or anyone wanting to build on their existing knowledge

Co-CEO and President Kristi Ross says, “Our team has been in and around trading, brokerage, and financial markets for decades. We’ve seen and experienced firsthand what was missing in our industry. Financial media was neither fun, nor actionable.”⁴ Her partner, Tom Sosnoff, adds, “I think people can learn anything. We make finance interesting which then creates engagement, and people can benefit from that however they wish.”⁵ The formula is a combination of charismatic on-air personalities and a hard emphasis on research-based strategy as opposed to financial news. 

tastytrade’s content, developed from the work of its team of data and quantitative scientists, “teaches a logical, mechanical approach to investing and identifying opportunities based on probability and volatility.”⁵ The network’s ex-floor traders, data scientists, and financial academics stress that, unlike with buying and selling stocks and ETFs, options trading allows you to be directionally wrong and still make a profit–and they show you how.

tastyworks - For those who want a better derivatives-trading experience

“We've...designed our [brokerage] interface to be easy to use,” says Linwood Ma, CTO of tastytrade. “See it, click it, trade it."⁶ That eye towards ease of use goes hand in hand with the prevailing company goal of expanding access. Anyone learning how to trade on tastytrade will find using tastyworks a breeze (since the platform and its functionality are featured on the network), but veteran traders will also find a bevy of valuable features they won’t know how they lived without in their previous brokerage. Among other things, the tastyworks platform uniquely offers: 

• A ‘follow feed’ where you can get ideas from trades made by the on-air tastytrade personalities

• An order chain feature that keeps track of your adjusted/rolled positions, the current trade price, and the real P/L on the whole life of a trade

• A Probability of Profit (POP) metric created by the tastytrade research team

• An IV Rank metric that tells you whether implied volatility is high or low in context of that stock’s past year of IV data--far more relevant to traders than general IV of an underlying

• A built-in video player so you can watch the tastytrade network without leaving the platform

Kristi Ross explains that tastyworks allows investors to “leverage...fast technology and low fees that appropriately fit our trade small, trade often methodology that we research and discuss every day on air.”⁷ This year, besides naming tastyworks “Best Broker for Options,” Investopedia dubbed tastyworks “Best Broker for Low Costs.” The announcement read: “The qualification for this award is simple: the lowest out-of-pocket costs.”⁸ 

Customer support is also top of mind. Aside from winning principal honors as the #1 brokerage on Investor Business Daily’s “2021 Best Online Brokers” list, tastyworks has specifically been rated #1 in Customer Service for the last two years. tastyworks CEO Scott Sheridan says, “Every decision that we make--from pricing to design--is based on how we think it will benefit our customers.”³

dough - For Millennials and Gen Zers hoping to start trading with some market context

“The next generation of investors are looking for more than bare-bones investing and wealth management platforms targeting them with slick promotions only to leave them high and dry when it comes to content, service, and functionality,” says Victor Jones, CEO of dough, a mobile app that serves as both a commission-free, user-friendly trading platform and a resource for market and trading content. Jones emphasizes, “It’s not about just throwing 18 different research reports at somebody and 5,000 different statistics and saying ‘you figure it out’–it’s about serving up context.”⁹

In addition to its stock and option trading functionalities, dough offers up:

• A watchlist of your favorite stocks and industries

• Video content focusing on actionable market news, trade ideas, and beginner options education 

• A scrollable idea feed with highlights on your industry interests, the best bits from dough video content, and alerts on what stocks are moving

• The ability to open an account of any size

• A live in-app support chat feature with a real person at the other end

Jones, who’s heavily featured in dough’s content as a financially-active millennial himself, states, “There’s over 600,000 registered financial representatives, over 3,000 broker-dealers and I think half of them are really trying to convince everyday people that they can’t manage their money on their own, and I think that’s the wrong message. I think it’s incredibly empowering to understand what’s happening in the world around you and how it impacts your money and the potential opportunities that come with that.”

Quiet Foundation - For those looking for insight into their passive portfolio

If you’re not quite ready to dive into derivatives trading, Quiet Foundation could be a comfortable place to start getting involved with your own passive assets. This advisory service offers up a completely free portfolio analysis, something Tom Sosnoff says is unheard of in the industry. “Most of our clients have accounts at multiple firms and we believe the advice they receive from other firms is conflicted because there’s a sales commission driving the recommendations…. It’s a broken model. True objective advice needs to be fee-free and data-driven in order to have real value.”¹⁰ And data is at the root of what Quiet Foundation does. 

The portfolio analysis, which services any account size across almost all brokerage firms, aims to give you a holistic view of the riskiness of your passive investment account(s). It consists of an in-depth, data-driven report based on Exploratory Portfolio Intelligence™ (EPI), “a proprietary platform...built through research and machine learning.”¹¹ 

Sosnoff acknowledges the fee-free model might ruffle a few feathers: “It’s going to make a lot of kind of old, traditional firms very mad at us, but we’re really used to that. I also think it’s going to shake up the whole advisory business because what we’ve done here is build something that is incredibly mechanical. So we’ve taken out a lot of the… subjectivity.”¹²

The Small Exchange - For traders seeking a smooth transition into futures

For those whose experience has been limited to trading options or even just stocks, futures might seem overwhelming. Historically, there’s been a huge barrier to entry in trading these products. They can be expensive (traditional futures contracts sometimes move by thousands of dollars a day), and they can be seriously confusing. “The expiration cycles of futures, you needed a map and a compass to figure out when your products were going to expire,” says The Small Exchange President and CEO Donnie Roberts. “Even the guys that we had, seasoned professionals... they had a laminated piece of paper with all the futures products we offered with all the tick sizes next to them and all the margin requirements and all the multipliers.”¹³ Even if you’re coming from the world of options–which has its own intricacies–the nuances of traditional futures can boggle the mind. 

So why, you might ask, bother with futures at all? One reason is they’re hugely capital-efficient (you don’t have to put down as much money up front to trade), and they can be a great means to exposure, hedging, asset speculation, and long term investment. They can also expand your set of trading strategies and give you access to the most active markets in the world. 

“It was exciting to have another product to trade–[another] tool for the toolbox,” says tastytrade show host Katie McGarrigle, who learned to trade futures live on air. “It also kind of makes you feel badass when you tell someone you trade oil futures or gold.”³ But, still, is it worth all the complexity? The Small Exchange makes a pretty convincing case with their collection of futures products that:

• Have one standardized tick size and expiration, making them accessible and easy to understand

• Are significantly smaller in notional size and cheaper to trade, with daily moves of a few hundred dollars at most

• Have the lowest exchange fees for retail customers in the world

• Are accompanied by free market data (most exchanges make a large portion of their money charging for this information)

• Offer holistic representations of markets--in contrast to conventional futures which reflect the markets piecemeal

Pete Mulmat, Chief Commercial Officer of The Small Exchange, asserts that the Smallsproducts will expand the scope of who has access to futures markets: “...part of our mission is tomaterially change the landscape of traders. Empower a new group, a much larger group of traders, [to]start to take the benefits of futures and incorporate them into their existing portfolios. So, ‘Smalls’ are built for everyone. Everyone who’s trading now, everyone who’s looking to trade, and everyone in between.”¹⁴

Luckbox - For readers looking to get more out of their money and their lives

If the printed word is more your bag, Luckbox Magazine can offer you a way to start putting the probabilities in your favor and have fun while you’re at it. Frequently awarded for its design and content excellence, this edgy periodical offers up a new “timely investment trend important to proactive investors''¹⁵ with each new colorful issue--things like cannabis, robotics & AI, big tech, gaming & Esports, and health & longevity. With many features authored by members of the tastytrade ecosystem, each Luckbox topic is covered from top to bottom and eyed through the lens of statistics and probabilities. “We know understanding math and probabilities empowers individuals to become more confident about the decisions they make,''¹⁶ says Jeff Joseph, editorial director of Luckbox. 

This combo of entertainment and hard numbers isn’t the only thing Luckbox shares with the rest of its tastytrade family. Joseph adds, “most of the financial news out there takes an approach that is either bought and paid for or conflicted, and I was very interested in providing a content platform that didn’t fall into those traps.''¹⁷ Like the rest of the tastytrade ecosystem, Luckbox’s mission is to offer enjoyable, informative, and conflict-free content that anyone can access. With a free digital subscription or an affordable print subscription, Luckbox readers can explore actionable trade ideas as well as lifestyle & culture articles. 

Joseph, being a print-nerd himself, has a bias towards the print edition: ”I want people to neverthrow out the magazine because there’s such inherent value in it as a resource that they have to comeback to it in the future….The magazine should be essential to our readers in the same way that if you’re in the music business you get Rolling Stone or if you’re a designer you get Architectural Digest–if you havemoney in the markets, you should have Luckbox magazine.”¹⁸

Whether you’re one of those stock market-intimidated 61%, or you’ve been slinging options for years, it’s likely at least one facet of the tastytrade ecosystem will have something valuable to offer you.  Co-CEO and President Kristi Ross says, “Research-based content, trading technology, and the tastyworks’ brokerage are just the base for what we’re building. The overall tastytrade vision encompasses an offering that goes much deeper than most large institutions are willing to go.”¹⁹ And people are taking notice. 

While the giants of the brokerage world--Charles Schwab, TD Ameritrade, Fidelity, etc.--may monopolize a majority of investors’ business, fans of tastytrade, tastyworks, and the rest of the tasty ecosystem are diehard, and their numbers are growing. From March 2020 to March 2021, the number of tastyworks accounts increased by a whopping 83%.²⁰ Much of tastytrade’s expanding business is built from positive word of mouth and appreciation for the content and education the company provides, free of charge. Tom Sosnoff finishes, “We have a goodwill relationship with our customers and with our future customers, and the goodwill means we give you everything: we give you technology, we give you all the content– everything we know–and we build cool stuff, and in return, maybe you use our products.”¹²

1. Social Currency podcast, 1. PR Newswire: “Sixty Percent of Americans Battle the ‘Someday Scaries,’ According to New Survey from Ally Invest,” 3. Internal interview conducted by author, 4. thinkMoney: “A Chat with Tom Sosnoff,” 4. Built in Chicago: “How 5 Women CEOs Found Success in Chicago,” 5. tastytrade.com, 6. tastyworks Australia Website “About Us” Video, 7. Businesswire: “Tastytrade Team Launches Tastyworks - a New Brokerage Firm,” 8. Investopedia: Best Online Brokerage and Trading Platforms Page, 2020 9. Connect the Dots podcast, 10. Businesswire: “Quiet Foundation, a New tastytrade Venture, to Offer Zero-Fee Investment Advisory Service,” 11. quietfoundation.com, 12. Tasty Extras: “Quiet Foundation Launch Party,” 13. Bootstrapping in America: “Donnie Roberts of Small Exchange, 14. Interactive Brokers Webinar “Introduction to the Small Exchange,” 15. luckboxmagazine.com promotional video, 16. Mr. Magazine Interview with Jeff Joseph, Publisher & Editorial Director, Luckbox Magazine, 17. Tasty Extras: “Luckbox Magazine Launch,” 18. Mr. Magazine “Fireside Chat” with Jeff Joseph, 19. AP News “tastytrade, Inc. Raies $20 Million in New Funding,” 20. Internal company data