Pricing and fees

Q - Does Alpaca charge fees to transfer money in or out of my account?

No, Alpaca does not charge a fee to deposit or withdraw funds via Automated Clearing House (ACH).

Q - Will I incur commission or clearing fees with Alpaca?

No. For U.S. equity trades there are no commissions charged and all clearing fees are paid by Alpaca Securities LLC to our clearing firm, Electronic Transaction Clearing (ETC)

Note : Regulatory fees are assessed on all sell orders. Refer to the Regulatory Fees section for more information.

Q - What are the regulatory fees?

Regulatory fees are charged by the US Securities & Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) on all sell orders. Alpaca Securities LLC does not benefit financially from these charges, and they are passed on to the relevant regulatory agencies in full.

  • SEC: $22.10 per $1,000,000 of principal (sells only) - this fee is rounded up to the nearest penny.
  • FINRA Trading Activity Fee (TAF): $.000119 per share (sells only) - this fee is rounded up to the nearest penny and no greater than $5.95.

Q - Do I have to pay for them separately?

No. You are not responsible for paying regulatory fees separately, as they are deducted from sales proceeds.

I am wondering when the regulatory fees are applied. Reading on FINRA’s website here, they say that fee is assessed on a monthly basis. Meaning the broker reports sales at the end of each month and a fee is calculated and charged from that. Am I correct in assuming Alpaca’s deduction occurs at the end of each month? For example, I perform 30 separate sell orders for 1 share each within one month, what will my fee be? .30 or .01?

Same question for SEC fee. From the regulations document (see section 2.A) they say it is evaluated on a monthly basis upon submission of a form by the broker.

If Alpaca is pocketing an extra .01 per sell order from rounding, then its essentially a .01 commission for all my sell orders. A bit misleading I’d say if you’re not mentioning this in the “About Alpaca” docs or here.

All great questions!

First, “Am I correct in assuming Alpaca’s deduction occurs at the end of each month?”
No, fees are typically deducted from a user’s account before markets open on the next trading day. Alpaca’s current clearing firm, Electronic Transaction Clearing (ETC), pays the Trading Activity Fee (TAF) to FINRA monthly as described in the FINRA link above. However, ETC debits user accounts daily. The charges are rounded up to the nearest penny so, if one sells 100 shares in a day, the .0119 TAF would be rounded up to .02. The SEC fees are handled in a similar fashion.

Alpaca does does not benefit financially from these charges which are passed through to the clearing firm. Alpaca is not ‘pocketing’ the fees. Many commission based brokers include these fees in their commissions. Alpaca doesn’t hide or bury these fees. These fees are published here and described in this post.

Normally these fees, which are only assessed on sells, are small. If one sells 500 shares at an average price of 10 the combined fees would be (500 x .000119) + (500 x 10 / 100,000,000 x 22.10). This equals .06 + .12 or .18. This is about .004% of the sale price. Also note that currently these fees do not get assessed in paper trading. Only live trading.

However, these fees can add up and very good to point these out. Consider a day trading scenario. One has $25,000 in their account. They use 4x margin to trade a ‘round trip’ buy and sell of $100,000. They do this ‘round trip’ 10 times in a day. The stock price is again 10 and total shares sold are 10,000 x 10 or 100,000. The combined fees would be (10,000 x 10 x .000119) + (100,000 x 10 / 100,000,000 x $22.10). This equals $11.90 + $22.10 or $34.00. Again, this is about .004% of the sale price, but as a percent of equity ($25,000) this is about .14%. Many day trade strategies shoot for small daily increases, often less than .5%. So, assume a trader has a super duper strategy which they have paper traded (ie no fees) and resulted in .25% average daily return. Compounded the annual return is almost 90%. However, in live trading, these fees will cut this return almost in half. This is an extreme case, but something to consider when trading high turns and high leverage.

Hey Dan, thanks this is good info. Since ETC assesses the fees daily, rather than monthly, you’re still paying up to 0.62c per month extra (from fees being rounded on each day, not each month). But that is much better than rounding for every sell order, which is what I was most worried about.