Does alpaca rounds up or down to the nearest penny when dealing with account balances?

Alpaca Trading
1

For fees, it rounds up to the nearest penny, but what about for balances? For instance, if I have 10.111$ will it round up to 10.12 or down to 10.11?

2

@drest Other than the regulatory fees, other transactions are rounded according to the IEEE 754 standard for floating-point arithmetic. This is also known as “Banker’s Rounding”, “round half to even” or “round to nearest, ties to even”.

Here’s how it works

  • When a number is not exactly at the midpoint between $.01 (eg $1.023) round to the nearest $.01.

  • When a number is exactly halfway between two cents (eg $1.025) round to the nearest cent with an even (zero) least significant digit.

Examples

  • 2.025 rounds to 2.02 (because 2.02 is even).

  • 3.035 rounds to 3.04 (because 3.04 is even).

Why is it used?

  • Reduces bias: Traditional rounding (round half up) can introduce a systematic upward bias when rounding a large set of numbers. Banker’s rounding helps to distribute rounding errors more evenly.

  • More accurate for calculations: This is particularly important in fields like finance and statistics where sums and averages are frequently calculated, as it can lead to more accurate overall results.

OK, I confess I got that last part from ChatGPT :slight_smile:

BTW, the only reason regulatory fees are not rounded this way is 99% of all fees are less than $.003. Therefore they would all round to zero and no fees would ever get collected. Bankers rounding relies upon a rather uniform distribution of numbers. The regulatory fees are highly skewed to numbers less than $.003 so bankers rounding would exhibit that same skew.