Personally, the one I care about is #3. I would like to have a setting that raises an error any time a trade would require use of leverage, so that I never accidentally borrow cash. This would make me more comfortable using strategies where I’m not as confident in their results.
Dear Dan,
Do you think it wise to invest borrowed money automatically? Many would consider this idea to be irresponsible unless there were some evidence of success.
I don’t trust my algos with my own money yet, let alone someone else’s… that’s why I’m using Alpaca to paper trade for a while to see if they work. Why would I risk owing a ton of debt, due to a software bug? It’s one thing to lose my money I put in. It’s a whole different story to wind up owing a bunch more.
I guess the Alpaca business model depends on margin to work, which is reason to defend it, but how do I enable this limited margin feature? I don’t see it in account configuration and there doesn’t seem to be an easy way to compute the limited margin requirement in my algorithm.
If I have $100,000 in cash, and I buy $100,000 in stock, does my cash go to zero? Or do I suddenly have both $100,000 in cash AND $100,000 in stock? The answer to that, would determine how one might reprogram their algos to only invest cash, and not debt…
Bion
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I’m interested in 3 & 4, mostly 4. The goal of my trading algo is to be semi-passive, and I don’t want to [initially] program in safeties for avoiding unhandled margin calls. Eventually, I’d like to leverage margin – but I think for getting new algo’s off the ground, the option to disable RegT margins should be available. (I’m all for the limited margin!)
Hi Dan.
For me, I am testing out using Alpaca for scalping using tradingview. I want to test out the execution speed and interface before I fund the account 25k. However, I can’t test it out because with margin, I get hit with the PDT rule.
Specifically, i funded my account with 2k and I want to trade a few stocks, like total transaction sizes of $10 or so, to fully test the interface. But after two trades, i get flagged PDT and I’m done.
Removing margin would fix this because I could trade with a cash account and my total usage would be small. When moving to a larger account size, the margin is great. But for testing, it stinks.
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I created this forum account just to reply to your question.
For me, it is reason #5: I don’t want to put $25,000 into my account in order to try my hand at day trading. I also agree with #3 and #4 to a lesser extent, but #5 is huge. Requiring a $25,000 investment will deter many new users from using your service.
I am perfectly ok with writing code to handle the cash-only rules like free riding and good faith violations. I only intend to spend settled funds. Please, please allow me to create a cash-only account that is free from the $25,000 PDT requirements.
I hope you will enable the cash-only ability right away. Later on, you could add protection features for cash-only violations, like give us an account-level option to disable the ability to spend unsettled funds. That would prevent the possibility of free riding and good faith violations. I’d be happy to enable those protections when they become available.
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- no
- no
- no
In order to avoid the $25,000 deposit requirement, my understanding is that we need all margin features disabled.
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I completely support turning off the margin feature. At the least, I would request Alpaca to allow the traders the option to either go with margin or non-margin account.
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@Karen Any advice on what brokerage account to use that allows that option of not using margin? I am looking too.
I open an account with TD Ameritrade. Their api is not as easy to use as that of Alpaca. There are wrappers. The most popular is https://github.com/alexgolec/tda-api
Even so, it took me hours to get the initial login working. There are templates for trades, so I am hoping that will go faster.
Karen Higgins
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@Dan_Whitnable_Alpaca I do understand where you are coming from. for me my interest is #1, #3 and the first part of #4.
I would like to use my own available cash only.
I like many others selected Alpaca due to the api and the ability to use an automated trading bot. As I primarily invest and swing trade, utilizing margins is not of any interest to me.
I do understand Alpaca stands to make more income if Margins are uses, as do the traders that have an interest in it. However, the FINRA regulations do say we have to agree. This Forum is proof that not all investors agree with using the margin. Because of this, I am having difficulty understanding the issue with adding this option.
At the very least, I stand by my earlier statement of adding additional fields to avoid confusion:
pending_order_amount - to show what cash you have promised for pending limit orders
deposited_avail_cash - to allow us to view the money we have left from our deposits w/o the margin added.
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@Dan_Whitnable_Alpaca As other as have mentioned:
I have $1,000 in my account. I bought a share of stock for $2, sold it at $2.10. Bought a share at $2.05 sold… wait. Locked can’t do it. Not allowed. PDT laws!!!
Why? I have $995.95 of my own cash sitting in the account doing nothing, and now I’m not allowed to sell the stock I bought at $2.05 because of PDT laws limiting my frequency.
I 100% want to disable margin because I care about frequency, and I’m 100% okay maintaining my “settled funds balance” to ensure I don’t buy/sell on margin before the dust settles in two days.
I don’t care about interest charges, volatility, or leverage. I just plain don’t want margin at all. What I want is to use my own money as I dang well please! Right now I’m forbidden by law from doing anything with the $995.95 sitting in my account, and I have to hold my fingers and pray to God that the share I bought at $2.05 will hold for a couple days.
This is literally the only reason I am not currently using Alpaca.
If I could place more than three trades in a day, even if it meant carefully watching my balances, I’d be here and active every day.
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For anyone’s interest, the issue on Github is here:
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I absolutely do not want a margin account. I cannot stress how much I do not want a margin account. I spent the day learning TD Ameritrades API and just signed up for Tradier to test their API because they have the options for cash accounts. I spent all this time learning alpaca just to find out I can’t have a cash account (I don’t know why I assumed I could do what I wanted with my money, but I was wrong).
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if something is mandatory,
if you donot have option to change it,
something is against you there!
Absolute + 1 here. It is quite easy to accidentally buy on margin and put me at a level of risk I never truly intended as a trader.
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@dan_whitnable_alpaca
Thanks for the insights.
But isn’t that the Customer’s decision to make – which set of tradeoffs they want to live with?
Bottom line is I do NOT want to borrow money for investing. I do not want even the POSSIBILITY of having it borrowed for me. I have cash, and that’s what I want to invest. FULL STOP.
Are you saying that after all these requests, that Alpaca still isn’t interested in allowing customers this choice?
I was just about to open an Alpaca account (and enthusiastically encourage it to others) … and create my whole day trading practice around it – and now find Alpaca won’t allow this very simple thing.
So, bottom line … does that really mean we have to take our business elsewhere?
Or if this option is coming shortly, some insight into timing would make all the difference.
Would appreciate a timely response, as I need to make a decision on this.
Thank you.
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The best part about a cash account under 25k is you can day trade all day as long as you spend 1/2 your capital daily. If you do this, every day you will have 1/2 your capital available for day trading.
@ron Thank you for the feedback. Cash accounts aren’t on the features list for Q1 or Q2 of this year but may be prioritized in the second half. Sorry that we can’t offer that now.
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No cash account support = I’m going to have to look elsewhere. I’m guessing Alpaca doesn’t want to offer it because it means less money from interest for them.
Hello,
New member here, started trading paper July 6, +1.2% in 2 days and already PDT blocked on paper account.
Coming from years of trading in crypto with amazing strategies, 100% agree with everyone here, you can not force traders to use margin account, we can manage our money, strategies and portfolios and are fine with T+2. Your answer, personally sounds a bit of a salesman, as you are just trying to bring up side effects that could “eventually” affect cash accounts, well we don’t care, we ask for no margin, it can be yes or no, without all the meshuganess. nevertheless, was just about to wire 200k$ for live account since api works fine and somehow stable, but will not take any risk and move to interactive which was my second choice anyway.
Please let us know when Alpaca has become traders friendly.
Thanks.
1 Like