Does Alpaca have any plans of offering direct access routing?
I would also be very interested in this. This would potentially be a feature worth paying commissions for if it also included full passthrough of rebates for adding liquidity.
I’m imagining it in a way that roughly matches IB Pro’s tiered pricing.
I love the alpaca platform, but order routing and execution has been lackluster…After refining my algorithm here, I’m considering switching brokers solely because of a lack of direct market access. Direct access routing would make Alpaca the only commission free direct access broker on the market that I know of, which makes me think that there may be a reason it’s not a thing.
I was algo trading with TD Ameritrade, and was “politely told to stop” once I started to turn significant profits (two months in the green with two red days, due to technical difficulties on my end). Their sole rationale for making me stop was a “mystery contract” they had signed with the SEC that specifically prohibits all algo trading on their platform (even though they offer an api ). It seems that mid-equity algo traders are meant to be fodder for the larger market making firms and commission-based brokerages… Likewise, the best and least obvious way they are able ensure we are profitable, is to control order routing, or charge commissions…It also leads me to believe that SEC puppeteering may be the reason for a lack of “commission free, direct access brokerages”
My personal conspiracy theories aside, if Alpaca somehow managed to pull off some form of direct market routing, without charging commission, they would be the only ones in the business (that I know of). It would provide a market-shattering PR boost, the likes of which the world has never seen…I’d gladly pay a first born or two to be able to trade on such a platform, but I understand there may be regulations in place that make such a business model an impossibility…If anyone knows otherwise, please fill me in!
That’s crazy that they reached out to you specifically to tell you to stop using their API for algo trading even though that’s literally what it’s meant for. I’ve been using the Interactive Brokers API (which offers direct access and smart routing) and I don’t want to run into the same issue you did. Do you think that your issue might apply to other brokers too?
It’s hard to say for interactive brokers…To shed some more light on my situation with TD, they stated that they would have to start charging me the old commission rate ($6 per trade or so) if I did not alter my trading activity…it leads me to believe that specifically commission-free algorithmic trading was the problem there…Once again though, purely speculation.
I was peeking around IB’s pricing structure, and it seems that the PRO plan (which gives you access to their APIs) charges commission for anything and everything trade-able… Because of the commissions, I’d hope that you’d be fine. I’d email a customer rep if you’re worried though, unless you prefer the “ask forgiveness, instead of permission” philosophy. I’m actually currently in the process of converting my algo to IB as well, specifically for the reasons you stated.
That’s really interesting. I had exactly the same experience with TD. After a couple weeks of consistent profits they (rather rudely) informed me that I was not a “retail trader” due the volume of my trading and imposed an exorbitant per-transaction commission.
I converted my bot to work on Alpaca, but the “lackluster” order routing and execution leaves me casting about for alternatives. Interactive Brokers may also be my next stop, although I’m still trying to make it work with Alpaca.