Beware the "no commissions" bait-and-switch!

Alpaca emailed me stating that my account was deemed “not retail in nature”, and they would begin charging me $0.004/share commission. Their website does not have any information on this, and they were extremely opaque with me at first, so I wanted to share here the criteria they finally gave me for being labeled as a professional trader. If any of the following conditions applies to you, I highly recommend looking elsewhere for a brokerage, as their fees are significantly higher than other professional-oriented brokerages.

  1. Trading more than 10,000 shares or more than $200,000 notional value (timeline unclear - daily?)
  2. High trading frequency (how high is high?)
  3. Low percentage of filled orders (how low?)
  4. High percentage of cancelled orders (how high?)
  5. High number of orders over an extended period of time
  6. Splitting large orders into multiple small orders
  7. Being registered with a broker dealer
  8. Trading as a profession whether full time or part time
  9. Engaging a professional to trade your account
  10. High percentage of orders filled on the opening or closing auction
  11. “Among other things”

You can see they didn’t want to give actual thresholds for these parameters. For point 10., a “high percentage” to them means >10%. If any of those sound like you, I suggest you keep shopping around. “Commission free” sounded to good to be true, and it is!

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This is disappointing. Normally brokers just need some minimum amount if they think you are not retail in nature. Do you have some idea where is the best alternative aside from alpaca? Currently, I only trade $3000 to try alpaca but I am now anxious to deposit additional funds due to this limitation.

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Disappointing indeed! It is common for brokerages to have separate fee structures for “professional” traders; maybe you’re thinking of the Pattern Day Trading minimum? Most other brokerages, however, are upfront and transparent with the fees and process. Alpaca is great for getting started - the API is easy to use, and you can initially take advantage of the free commissions. But there will come a time when you need to graduate from the kiddie pool if you want to swim with the adults.

I ended up switching to Interactive Brokers for the following reasons:

  1. Lower fees ($0.0035/share compared to $0.004, even lower if you trade high volume)
  2. Liquidity rebates (Alpaca pockets these, IBKR passes on to customer)
  3. Higher API limit (1000 calls/min for premium paid Alpaca service, 3000 calls/min for IBKR)
  4. OPTIONS
  5. Better customer service (Alpaca is like pulling teeth, IBKR provided me with even more information than I requested over email and has a 24/5 phone number you can call to talk to a real person)

Something else to consider before depositing a significant sum of money into Alpaca is the daily withdraw limit. I didn’t realize until I went to pull all of my money out of my account that you can only withdraw $50,000 per day. Good luck!

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Doesn’t IBKR have other commissions? I mean, that’s why we started on Alpaca in the first place, no?

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Personally, I started with Alpaca for the ZERO commissions. Once they started charging me, I shopped around for other options. IBKR has other regulatory and clearing fees (and liquidity rebates!) that are generally small compared to the commissions. They’re all clearly listed on their website if you want to see for yourself and calculate how those fees would compare to Alpaca’s for your purposes. For my strategy, especially with IBKR’s volume-based discounts, the difference was quite dramatic in favor of IBKR.

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Wow and I was just starting to open a account… thanks for the heads up

Glad I didn’t move forward with opening account

shit I just did and transferred funds

I’m getting a feeling something is off. Did Alpaca stop answering in the forum completely?