Tom Sosnoff thinkorswom tastyworks tastytrade

Tom Sosnoff is one of the people that created thinkorswim—the well-known Options trading platform. After college, Tom got a job with a boutique brokerage firm. He went through their training program and ultimately ended up leaving and moving to Chicago, where he’s stayed for 40 years—20 of which were spent working at the Chicago Board Options Exchange.

Tom stood in the same spot on the trading floor for 20 years and he got tired of it. He was a successful trader with a decent-sized firm but wanted to try something different. Tom left the trading floor to build thinkorswim. When he and his partner started thinkorswim, they were one of the first two to build options-centric platforms. What did their journey look like? Find out in this episode of How To Trade It!

In this episode of How To Trade It, @tastytrade Tom Sosnoff shares his journey creating thinkorswim + tastyworks + tastytrade. Don’t miss it! #stocks #trading #StockMarket #Investing #DayTrading #StockPicks Click To Tweet

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  • [0:39] Tom Sosnoff with tastytrade
  • [2:49] From the trading floor to thinkorswim
  • [5:08] Developing the thinkorswim software
  • [6:45] Launching the thinkorswim platform
  • [8:16] Check your ego at the door
  • [10:08] How to be a successful trader
  • [11:40] Premium selling with options/stocks
  • [13:52] Founding tastytrade + tastyworks
  • [16:41] Tom’s thoughts on Robinhood

Developing the thinkorswim software

Tom notes that developing thinkorswim was a huge challenge. At that time in history, there weren’t good software developers in the US. So in an attempt to find good developers, they went to programming competitions. Through a weird set of coincidences, they ended up working with the top developers in the world—in Russia.

They built the thinkorswim platform in St. Petersburg, Russia in a garage with no heat. They had to smuggle in servers to build a demo platform to learn how to build software. Today that firm in Russia has over 450 employees and they’re probably the best software development company in the world.

People told them they’d never make it with that name. They were told that no one would trade on a platform with that name. They were told there was no chance they’d make it because no one trades options. They didn’t listen to anyone and did their own thing. They made deals and acquired customers any way that they could, mostly organically.

Schwab just bought thinkorswim for 28 billion dollars. It’s the most actively used platform in the world. They built it from nothing. It’s a good thing they didn’t listen, right?

Premium selling with options/stocks

Tom is a premium seller. So he uses options more than anything else (on stocks or futures). It’s based on what he believes are situations with high uncertainty or volatility. Rather than trying to beat the stock, he makes the stock try and beat him. It’s a math-based high-probability strategy where you risk more than you make.

It’s high-risk, low-reward but with a high win-rate. He likes to find profitability with unlimited risk. It’s different than most other people in the industry. Risk-free money doesn’t pay. To get a return above zero, you have to take risks. Tom believes there’s no such thing as “this is better than that” but simply mechanical advantages.

@tastytrade shares that developing thinkorswim was a huge challenge. Why? He shares his story in this episode of How To Trade It! #stocks #trading #StockMarket #Investing #DayTrading #StockPicks Click To Tweet

 

Founding tastytrade + tastyworks

Everyone that started thinkorswim is at tastytrade. When they launched it nine years ago, they had the experience, the money, and credibility that they had earned.

Tastworks is the first platform where the “guts” are all high-frequency. The middleware—the piece that talks between their front end and the liquidity providers and exchanges—needed to be clean. They wanted to cut out the friction, the legacy slowness, etc.

When you route an order, your order gets routed to a variety of liquidity providers and it happens in a few milliseconds. There is no other platform in the world that does that. It’s lightning-fast, stable and conducive to trading.

He wanted his legacy to be that he built two amazing billion-dollar companies in two decades—and he has. What are Tom’s thoughts on Robinhood? Why does he think they’re a great engagement platform? Listen to hear his thoughts!

What does thinkorswim creator and @tastytrade founder Tom Sosnoff think of Robinhood? Find out in this episode of How To Trade It! #stocks #trading #StockMarket #Investing #DayTrading #StockPicks Click To Tweet

 

Resources & People Mentioned

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