Written by Matthew Cerminaro on September 15, 2020
FTC Disclosure

Gatsby Options Review 2020: Best Trading Platform?

Gatsby Options Features
  • Mobile App
  • Features
  • Customer Support
  • Trade Incentives
  • User Friendly
4.1

Summary

Gatsby likely has everything you would want in an online broker tailored to options trading. Its fees are extremely competitive (because it has none) with other online broker’s offering up options trading. If you are specifically interested in trading options, Gatsby may be a great option for you. If you are looking to branch out to other financial assets such as stocks, ETFs, mutual funds, bonds, CDs, etc, you may want to look for another broker.

Pros

100% fee free options trading

Earn rewards from trading

$10 minimum

Cons

10,000+ waiting list

Limited customer service

Gatsby Options is one of the most unique online brokers on the market today. What makes it unique is not because of an assortment of features, but instead because it specializes in one; options.

Gatsby has introduced a platform where options are the only focus. Instead of buying and selling stocks, mutual funds, bonds, and other financial instruments, Gatsby has made it a goal to offer top services solely in the options realm.

In this review, we will be taking a look at Gatsby to breakdown exactly what it is, some of the main features, and fees that you should be aware of. 

Summary

  • There are no fees charged by Gatsby for buying and selling options on its platform
  • Only options offered on Gatsby, no stocks, ETFs, mutual funds, bonds, etc
  • Gatsby has gathered a community of options traders so you can socialize with others and come up with ideas in a highly collaborative setting
  • While Gatsby is not covered by the FDIC, it is covered by the SIPC
  • No direct customer support offered, but a highly extensive FAQ page
  • Mobile app offered on both App store and Google Store
  • Mobile app simplifies the options trading process
  • $10 account minimum if you are looking to open an account with Gatsby

What Is Gatsby Options?

Now that you have a little background of Gatsby, let’s take a deeper look at the online broker to uncover how it works and what it exactly is.

gatsby buying options

Like many other online brokers of 2020, Gatsby runs completely digitally.

It offers a beginner-friendly interface on its web-version and also mobile app that simplifies the options trading process. 

What Is An Option?

Options are a form of a derivative.

To keep it simple, an option gives you the right, but not the obligation, to buy or sell a financial asset at a certain date and specified price.

The date of the option is called the expiration and the specified price is called its strike price. 

Therefore, when trading options you must keep two factors in mind; time and price.

Types Of Options Contracts

There are two primary types of options; calls and puts.

To put it simply, when you buy a call you are expecting the stock to go up. When you buy a put, you are expecting the price to go down.

Obviously there is a lot more to options, and you should fully understand them before purchasing them. They are a high risk, speculative asset. 

Options Premiums

The last important component of options are the premiums associated with contracts.

Options contracts are offered in 100 share lots.

So, you have to take the premium, or what you are paying for the option, and multiply it by 100.

If you want to buy one call option for Apple with a $0.35 premium, the total trade will cost you $35 (100 X $0.35 = $35).

If Apple stock goes down and your option loses value, because you are not required to execute the transaction, you can just let it expire and lose the $35.

With options, your risk is defined because you are not obligated to execute your option at the expiration date.

Gatsby Options Features

You can open up a Gatsby account with as little as $10.

This is great news if you are a beginner trader and looking to start small. Remember that even though options come with an elevated amount of risk in comparison to normal stocks, you can still start small.

As long as your properly manage your risk, there is nothing wrong with starting small!

$0 Commissions

The only cost that you will incur when trading options is the premium associated with your contract. In terms of a commission charged from Gatsby, you will find none!

Many other brokers will offer fees such as a per-contract fee. Not Gatsby!

Gatsby Reward Points

Instead of charging you a commission, Gatsby will reward you for making more trades!

For every trade you make, you will be rewarded on a point-based system and those points can be redeemed for gift cards from top retailers and stores!

Gatsby Mobile App

No matter what mobile device you have, iPhone or Android, you will have access to the Gatsby app.

You can download the app for free either on the Apple Store or the Google Play store. While options are complex in nature, Gatsby does an exceptional job at simplifying the trading process for its users.

By making the process beginner-friendly, you can grow your knowledge-base of options from the ground up. And remember, don’t be discouraged!

Early on in my career trading options, I lost money time and time again, but through trial and error I have figured out a trading strategy that works for me. Be patient, continue to educate yourself, and Gatsby’s platform can only act as a guide to helping you achieve options trading success.  

SIPC Insurance

While Gatsby is not protected directly through the Federal Deposit Insurance Corporation, it does offer its options through ViewTrade Securities which is backed by the SIPC.

The SIPC (Securities Investor Protection Corporation) is willing to meet the claims of customers up to $500,000 with a maximum $250,000 on cash claims.Gatsby UI

Customer Support

Gatsby does not currently have a customer support line that you can use for urgent questions.

Instead, you can turn to the extensive FAQ page on the Gatsby website where most of your questions can be answered. Because the broker is so new, it is working on developing its platform and therefore has limited customer support capabilities. 

Gatsby Options Fees

Gatsby currently does not charge any fees directly for the use of its options services. SEC & FINRA fees on certain transactions may still apply, however.

For options specifically, there is an ORF Fee on every transaction.

ORF Fee

An Option Regulatory Fee (ORF) is a fee that is collected by clearing members of the US option exchange. Depending on the exchange you are trading on, your fee may be different.

They all range between a few to a handful of pennies, however. So while it still is a fee, it is very minimal.

Account Minimum

Gatsby has a $10 account minimum which means you can still access the broker if you are looking to open a small account.

Gatsby Options Pros

  • No commissions or fees associated directly with Gatsby
  • An easy to understand mobile app, available on both the App and Google Store
  • Gatsby’s platform purposely makes the options trading process easy to understand
  • Both market and limit orders offered
  • A community atmosphere where you can make friends and discuss trades
  • SIPC insurance covers up to $500,000 of positions and $250,000 of cash in an account
  • Gatsby Reward Points incentivizes you to earn points through trading and eventually exchange them for gift cards to top retail stores in the US

Gatsby Options Cons

  • Current waitlist to access Gatsby has mounted to 10,000+
  • While it is low, a $10 account minimum is still needed to open a Gatsby account
  • No customer support line as of now
  • No educational resources that you can access directly through Gatsby to learn about options

The Final Verdict: Gatsby Options

To sum it all up, Gatsby has everything you would want in an online broker tailored to options trading. Its fees are extremely competitive (because it has none) with other online broker’s offering up options trading.

If you are specifically interested in trading options, Gatsby may be a great option for you. If you are looking to branch out to other financial assets such as stocks, ETFs, mutual funds, bonds, CDs, etc, you may want to look for another broker.

In the end, however, it all comes down to you and your goals. But, if your only goal is to be an options trader, Gatsby will have you covered with the platform and features you will need!

Keep Reading:

Gatsby Options Review
Article written by Matthew Cerminaro
Matt is currently attending Union College pursuing a Bachelor of Arts in Economics. He participates in the student investment fund and is a member of the Union College football team. Matt runs his own personal finance Instagram page and market-related blog where he writes about economics and general wealth accumulation tips.

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