Investing With IBD Ep. 341 Why Tom Sosnoff Still Sees Room For Another New Financial Platform
Oct 8, 2025
Tom Sosnoff, a serial entrepreneur and the mind behind Thinkorswim and Tastytrade, explores the evolving landscape of financial platforms. He shares insights on the rise of derivatives trading, emphasizing the need for efficient capital strategies. Tom discusses the unique culture at Tastytrade, which prioritized education and innovative content over mere pricing. Looking ahead, he introduces his new venture, Lost Dog, aimed at addressing wealth inequality through financial education and progressive tools. Expect engaging dialogue on risk management and trading strategies!
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From Trading Floor To Thinkorswim
- Tom Sosnoff left the CBOE floor after 20 years to build Thinkorswim from scratch. He and partners bootstrapped the platform using their trading profits and a little capital.
- They launched a novel Java-based trading site and even turned the S&P 100 pit into a swimming pool visual on their first website.
Capital Efficiency Drove Options Growth
- Derivatives exploded because they offer capital efficiency for smaller retail accounts facing expensive underlying stocks. Options and futures let traders express views with far less capital than buying shares.
- Strategic use of derivatives also enables diversified, repeatable trades that leverage the law of large numbers.
Target Multiples Of Risk-Free Returns
- Set objectives as multiples of the risk-free rate to justify taking market risk; Tom targets 3x–5x risk-free as a minimum. That frames why active trading must offer materially higher returns than treasuries or CDs.
- Aim for strategies that provide the chance for those multiples, not small incremental benefits over cash.