Tastytrade is an online financial network that vaguely styles itself after Howard Stern's format, although less offensive more politically correct. The format focuses on options and futures plays with little edginess with the esception of the occasional double entendre. The show is an excellent source for educating people on options. The subscription is free with an Ameritrade account.
The staccato and sometimes dismissive delivery from the host Tom Sossnoff is tempered by the more polished Brooklyn Italian side kick in the yes man style of Ed McMann, However Tom Sossnoff is neither Johnny Carson nor the Shock Jock Howard Stern himself. Both men are highly skilled and experienced in options and futures trading with over 50 years combined CBOE floor experience.
Tastytrade invests heavily on advertising that seem to only appear on the show. These are quite witty and entertaining and almost worth the price of admission. He mocks the obnoxious self promoting market pundit Jim Cramer as well and the absurdity of more mainstream financial broadcasting networks.
Tastytrade also responds to 100% of emails and provide detailed analysis of their trades in each response. They accurately stand behind their promise to do so.
The gregarious Mr. Sossnoff tirelessly promotes active trading, urging subscribers to place many trades pointing to the law of large numbers to provide a handsome profit. ( He estimates making over 5000 trades for 2012) This suggests that he is closely aligned with Ameritrade which purchased the Think or Swim trading platform he developed. Ameritrade most likely benefits from the increased trading volume due to his prolific number of trade suggestions.
Mr Sosnoff is a proponent of the random walk-- efficient market theory, which holds that markets are not predictable and therefore directional trades are pointless. Despite this philosophy, Mr. Sossnoff often places directional options and futures positions. He admitted once that he makes very little money on these futures but he does it to stay engaged. In another segment he makes the claim that few pit traders will trade futures after leaving the floor. His trading approach hangs its hat on the volatility card, where volatility crush supposedly provide excellent payoffs following earnings or elections on the highly risky open ended Strangle plays and naked put option positions.
Mr. Sossnoff never misses the opportunity to remind everyone that Tastytrade is different than all other financial networks because they put their money where their mouth is and actually place the trades they suggest. They deserve much credit for this, however they fail to provide an accounting of the trade performances and grotesquely under report their loses. When asked about this they stood behind a legal curtain( while their affiliate shadow trader is more transparent here with a record of their trade suggestion --which generally trails the general market) . Mr Sossnoff has also, on occasion, failed to indicate adjustments to option plays on losing positions while touting the minimized losses to viewers. Options trades have a higher occurrence of wins when credit or positions are "written" in the same way the investor acts as an insurance underwriter selling risk management. However when the minority of trades go awry like a devastating hurricane costing insurance companies great sums of money, they may more than make up for the profitable trades especially on unlimited risk plays like strangles. One such example is with Starbucks (SBUX):.
Mr. Sossnoff's SBUX trade exceeded the expected move ( outside the volatility range) and became highly unprofitable. Each original position consisted partly of 3 short calls which are generally bearish. However when SBUX earnings "blewout the numbers" the stock rallied as if on caffeine and all followers of the Pied Piper took a hit to their account. However, when he refers to the trade, he only made mention of a .90 loss not the 2.70 loss and he failed to account for the loss that most viewers took which was closers to 1.33 per contract (which is 4.00 total)-- since they failed to make the adjustment he made. He reported his losses on YUM brands (YUM) similarly, declaring he closed at break-even because he bought stock to cover his losses in after hours trading. Recently he took a big loss on ANF when it moved outside his expected move- stating that the probability of this was about 1 percent. This trade was purchased for about .06 but will incur about a 4.00-5.00 loss per contract. Mr Sosnoff qualifies these trades as small, however he never indicates the sizing of any of his positions.
While Mr. Sossnoff claims to be different than other financial broadcasts and touts an edge by trading volatility, in reality his fiscal performance is no better than any other newsletter and probably not much better than the 50/50 win rate experienced most of the directional traders and pundits, he mocks.
This review is the subjective opinion of an Investimonials member and not of Investimonials LLC
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