Apparently if you start making too much money (bigger order sizes) and try to avoid paying slippage (by splitting up your orders or trading the auctions), they will arbitrarily start charging you extra fees.
I donât understand why alpaca needs to flag certain accounts and charge them commissions, since other commission-free brokers donât have a similar policy. If you arenât taking advantage of users, whatâs the cost of having users that can trade well on the platform? Seems that Alpaca only wants users who trade poorly and pay a lot of slippage, if you win too much they kick you out like a casino.
Aside from the forum post (and other similar posts on the web), i cant find a page mentioning this 0.4 cents fee anywhere.
What I would like to know is, do these 0.4 cents also apply to users paying the 99$/month under the âunlimited planâ( âfor algo traders and quantsâ), or âprofessional planâ (âfor professional traders and hedge fundsâ)? What about people building with the broker api? Can they also randomly start getting charged these fees for each trade? This is all unclear.
How can we trust a broker whose main advertising point is âzero feesâ, targeting âalgo traders and quant fundsâ but at the same time reserving the right to start charging random fees to any customer?
Note the text âCommission free trading is available for Alpacaâs retail customers. Alpaca reserves the right to charge additional fees if it is determined that orders flow is non-retail in nature.â There arenât any hard rules defining âretailâ order flow but there are some guidelines in this FAQ. Less than .1% of all Alpaca accounts are ânon-retailâ so this doesnât apply to most traders.
Alpaca works with a number of execution partners who actually execute the trades. Many of those partners pay Alpaca for orders we pass to them which then allows Alpaca to offer those trades commission free. However, each execution partner has guidelines for the types of orders they accept, and each partner has slightly different guidelines which is why there arenât hard rules for which orders are considered commission free. In any case, the determination is made on an account basis and not an order basis. One will never see a charge without first being notified, and given the option, to going with a non-retail account.
To answer the specific questions
"do these 0.4 cents also apply to users paying the 99$/month under the âunlimited planâ.
The data plan one subscribes to is completely entirely separate from trading and therefore does not impact any trading fees. Market data is a standalone product one can subscribe to but one could also subscribe to any third party data as well. There is no impact to how orders or trades are executed.
âWhat about people building with the broker api?â Order fees for developers using the Broker APIs are generally negotiated on an individual basis. However, 99%+ of all those orders are again commission free because they are âretailâ in nature.
"Can they also randomly start getting charged these fees for each trade? " No, fees will never be charged without first discussions with the account holder. If an account is determined to be placing too many non-retail type orders, an associate from the Alpaca Trading Team will reach out and 1) give the account holder an option to change their order characteristics back to âretailâ or 2) negotiate a commission fee.
