In this post I will demonstrate how I set up my Tastyworks account and how to navigate to the most relevant sections.
Note: I have multiple accounts and I use multiple brokerage firms and Tastytrade is one of them. Tastyworks is the tool that the team at Tastytrade built and I personally find it really good for those who want to trade options. At the time of this post the Tastyworks platform I have is on version 1.21.1.
Disclaimer: I do not have any business association with Tastytrade or Tastyworks or any of their affiliates, however if you open a new account and give them my referral code (V3FGJ9HJ3N), then I may get a small recognition.
The intention of this post is not to replicate the user manual that the Tastyworks Team put together but to show you how I customised my account to make it more suitable for myself. You do not have to do the same as everyone has their own style.
Tastyworks Window 01
I am not sure what a new/fresh window looks like so you may need to click on the settings cogwheel to adjust your default setup if you want to replicate my window.
Here are some of the critical points I want to highlight:
This is where you can see your most recently viewed stocks.
This is where you have your watchlists. If you click on the cogwheel then you can set up your own watchlist and name it whatever makes sense to you. This is quite useful as there are well over 10k stocks/ETFs/futures (paper) to trade but, depending on your account size, it's possible that only a handful of them are relevant to you.
This is where you enter the symbol of the paper you want to trade. Each publicly traded entity has a symbol. If you are interested in a particular company but unsure about their symbol then just look it up on the internet.
IV Rank is critical for options traders. The higher the IVR is the more money you can make.
Chg = Change of the price since the opening of the market day. I personally prefer to look at percentages as that's more indicative than the change in dollar terms so you should always have a calculator handy.
Net Liq: shows you your account balance. The aim of the game is to increase your Net Liquidation Amount (obviously). As the market moves every second, do not worry about the up/down movement too much as it's very much normal that on some days your Net Liq is lower than other days.
Option BP: Option Buying Power. This is probably the most important figure. It shows you how much cash you have available on your account. If you don't maintain a high enough cash balance and the market moves against you then you will be forced to close one or many of your positions potentially at a loss. Suggestion: always keep about 50% of your Net Liq in cash. So if you have a Net Liq of $3000 then keep about $1500 cash. In some instances it is fine to go below the 50% but you must understand the risk.
This is where you see your existing positions. If you click on the first figure (in the above screenshot it's the 2.64 with the dark green background) then the position details will be extended. Note: the current version (1.21.1) of Tastyworks has a bug and sometimes the table goes blank. If this happens then try clicking on the 'OPTIONS' tab twice. You may also need to click on the 'WORKING' tab too.
Trd Prc: this tells you how much you traded your position. When you want to close your position then you should be aware of your Trade Price and make sure that you close the position for a profit unless you have a valid reason to exit your position at a loss.
This shows you how much capital the given position is consuming. If you have a losing position and it consumes too much capital then you may want to consider accepting the defeat and move on.
Tastyworks Window 02
Further to point 8. on the above list, once you expand your existing position's view then you will see more detail about your position, such as the current bid/ask price of your position. Note: the bid price of 98.13 above refers to the price of 1 AMD share while the 0.91 refers to the existing short (quantity = -1) May (expiry) $75 (strike) put option position. Also note that you can change the columns of this table under settings.
NAT shows you the estimated fair market value of your position. On the above diagram the May $75 put option was sold for $0.97 (trd prc) and it's currently worth about $0.96. The LMT shows how much this paper should be closed at.
Working = there is an open deal request. In the above example there is a request to buy 1 May $75 put option for $0.76, which will give us $0.21 x 100 profit if the system finds somebody who is willing to sell us this paper for $0.76.
Trade is where you can place your trades. This is detailed further below.
Activity shows you your recent trades.
Graph shows you the price movement of the stock (not the option).
History shows you all your activity.
Follow allows you to see what some of the Tastytrade traders are trading. It's a great way to get trade ideas and learn new strategies.
If you click on the arrow pointing to the left then you will see a tab for 'Alerts'. I strongly recommend maintaining a healthy list of alerts as it's impossible to keep an eye on every single paper. For example, a stock's price drops today but you want it to go even lower before you sell a put option against it. This is where you can tell the system to give you an alert if the price reaches your desired level.
Tastyworks Window 03
The Indicators allow you to add all sorts of statistical indicators to your graph. For beginners, it could be highly confusing so it's worth studying what sorts of indicators to use, if any. Indicators are basically measuring the movement of a given stock compared to it's historical movement and can suggest if a stock is going to go up or down. This topic is covered under 'Technical Analysis', which would be a 500 pages long book so I am not going into more detail about it here.
This dropdown allows you to view the price movement based on the timeframe you want. I normally use daily, weekly and monthly and occasionally the 15 minute one just to get a really granular understanding of what's going on. The monthly charts can show the traders really strong support/resistance lines.
The timeframe we want to view. I always just have it on 20 years. If a stock hasn't been trading for long then I probably prefer to stay away from it as there isn't enough history.
This dropdown allows the user to draw on the graph. It is very useful for technical analysis.
This is my secondary graph. I like to look at the IVR movement as that gives me a better understanding of what the current IVR level means: is it high or low.
Tastyworks Window 04
This dropdown allows you to set what kind of trade you want and the view. I personally only use the 'TABLE' and the 'CURVE'.
The Analysis tab allows you to see your existing position or the deal you want to set up in a graphical way (see more below).
This is where you can see the option expiry. The monthly options are more prominent as most options traders trade monthly options instead of weeklies. In some instances you can also trade daily options too.
The system indicates if there is any upcoming earnings. This is absolutely critical as keeping short positions open during earnings can result in significant gains/losses.
The dots indicate if you have an existing position or if you have a deal that you selected but haven't committed yet.
Tastyworks Window 05
This is where we can see that we already have a short position (quantity = -1). If we want to sell another one (making the quantity = -2) then we need to click on the bid price (0.91) and the system will highlight the paper with red. If you want to buy a paper then click on the ask price (0.96). If you clicked on the wrong column then just click on the red/green section (S 1) and it will change the colour.
This is where you can see what you have selected: sell 1 May 20 $75 put option (STO = Sell to order)
This is where you can change the price. Obviously when you sell something then you want to sell for more (e.g. change the figure from 0.91 to 0.94) but if you want to buy then you want to buy for less.
You can change the order type, but I always just have it as 'Limit'.
TIF: time in force. Sometimes your order should only be valid for one day (Day) but other times you may want to close a deal whenever, in which case you would set this to GTC (Good Till Cancelled).
Click here if you want to review your deal. Don't worry, it will not commit to the deal if you click on it as there is one more step before your order is committed.
In this line you can see a bunch of really useful info, such as PoP (probability of profit) and the Delta.
The BP Eff is absolutely critical to be mindful of as you should maintain an approximately 50% cash reserve in your account. This part shows you the estimated impact on your BP (buying power) if you finalise your deal.
I believe that the above should help anyone to place their first trade using Tastyworks.
If you have any questions, please reply to this post.