Alpaca Trading Review
Richard Montana | November 17, 2022
Alpaca Trading provides an API for commission-free crypto and stock trading. They give you access to powerful tools for algorithmic trading and charting via a proprietary web platform and soon to be released app. You can trade with algorithms, backtest, connect with apps, and build services with the customised APIs. There is no minimum deposit required if you would like to give the Alpaca API a try and see if it is suitable for your trading strategies. Personally, I found it to be quite complex and therefore think it would be an option for those of you who have advanced programming skills and are looking specifically for an API solution. I have used the MetaTrader platform for all of my automated trading for many years. I find it very user-friendly whilst there are tons of free and paid premade robots that you can choose from. MetaTrader is available through the majority of trading brokers. That being said, Alpaca go a long way to serving algo traders and quant funds with the platforms and tools they need to succeed.
Pros & Cons
- Invest in thousands of stocks and ETFs for zero commissions
- Proprietary trading platforms for web and mobile
- Great for algorithmic trading with FIX API
- SDKs are available in Python, .NET/C#, Go, Node and more
- Test your strategies on paper trading before deploying to production
- Paper trading and live trading both come with real-time market data
- Integrates with third-party software including TradingView
- Fast order executions with Alpaca's OMS v2
- No minimum deposit required to start
- Commission free stock trading
- Embed Crypto and Stock Solutions with Broker API
- Currently, Alpaca only supports trading of listed U.S. stocks and select cryptocurrencies
- Could improve trading tools for analysing charts
- Limited educational content for beginners
- Bank wire transfer funding only
- No 24/7 customer support
Founded in 2015, Alpaca is an online trading company that is registered in the United States and based in the bay area of California. The company is made up of a team of professionals with deep financial and technology expertise, backed by some of the top investors in the industry globally.
They provide traders with access to US stock markets, historical data, and fundamental data through their innovative API. The founders wanted to build a software from the ground up that enables retail traders to take advantage of automated trading in ways that had previously only been accessible to institutional traders.
The developers amongst you will have the opportunity to build your own algorithms and contribute to the Alpaca developer community. For those without any coding skills, you can still manually analyse the markets and trade various financial instruments using a web-based trading platform.
The broker makes available some useful trading tools and educational resources. There is also a dedicated client support team to assist you with any questions you may have. However, they really shine when it comes to industry leading API trading solutions for retail and institutional traders alike.
One of the most important things that I look for in a broker is regulation. I am pleased to see that Alpaca are regulated where they operate, in the USA. They are regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). This is satisfactory regulation and gives me plenty of confidence that they will operate in an honest and trsnaprent manner.
The broker offers its services to traders from different parts of the globe where the use of such services would not be contrary to local laws or regulations. If you are unable to open an account with Alpaca Trading, you can have a look for an alternative option in our broker ratings.
Alpaca Trading gives you access to the markets through their very own proprietary web-based platform. Alpaca’s web trading platform functions as a sidekick to the Alpaca API. It is simple and easy to use although I have read about some users experience bugs from time to time. I guess this is normal when they are always releasing updates and new features, but not ideal. When you implement trades using code, you can easily check on them, cancel them, or duplicate them on the web platform. I like how Alpaca focuses on simplicity for its modern web platform, which is balanced by the many complex functions that the API provides. The web trading platform is available in English, and it runs directly on most modern web browsers.
You can execute your trading algos to buy, sell, and short U.S. stocks with zero commissions. All users get unlimited access to real-time US stock market data. Paper trading allows you to test how the API works and how your strategies may perform. Simply update the API endpoint to a live trading account to run your strategies in the live production environment. With the Alpaca web dashboard, it’s easy to monitor both your paper trading and your real money brokerage account.
- Commission-free API: Building with the Alpaca API can make stock trading commission-free
- Real-time market data: Paper trading and live trading both come with real-time market data
- Advanced order types: You can build sophisticated strategies using a suite of order types including OCO, IOC, MOO, and MOC.
- Two-factor authentication: They care about your security and continue to add variety of 2FA options
- Margin and short selling: A wide array of advanced investing and trading strategies are supported
- Testing environment: You can back—test your strategies before deploying to production
- Business account support: Options for those who are looking to start up a prop trading firm or a hedge fund
- Pre market & after hours trading: You can trade outside of Regular Market Hours. They offer 4:00am to 8:00pm Eastern Time Monday to Friday
You can take advantage of some useful trading tools, including the FIX API which is great for building complex automated systems based on your own strategies. Alpaca Trading has an excellent bundle of apps through the OAuth platform. You can integrate with lots of third-party providers including TradingView, Streak, Slack, QuantRacket, Blueshift, AlgoBulls, Trellis, Algorum and more. These let you take advantage of extreme flexibility with API and app integrations. You can build customized trading apps, algo bots, or unique dashboards with direct OAuth integration.
I really like how you can trade with Alpaca directly from your TradingView charts to get access to its advanced charting capabilities. There is no switching between tabs or pointless clicks. It just makes everything from markets analysis to manage trades more efficient. It is easy to connect, you just select TradingView from Trade panel to connect with the ultramodern charts. I think this is important for anyone who wants to do some complex market analysis. This is because the Alpaca platform is limited in terms of charting tools when used as default. I like to have as many indicators at my disposal as possible, TradingView makes this possible. It provides traders and investors with industry leading charts, tools, and social networking.
The Alpaca Broker API allows you to seamlessly embed 24/7 crypto trading and fractional stock trading with full extended hours and more into your app with relative ease. Depending on your platform’s unique strategy, you can add crypto then securities or vice versa, or choose to focus on one solution. They believe in opening access to financial services and offer flexible plans to help you get started. The plans are built for everyone from developers to rapidly scaling start-ups, to large enterprises. Customized product solutions, and service packages are available for medium to large enterprises. There is a myriad of different ways that the developer-centric APIs can be used to build your product. The Broker API is specifically designed to support and offer flexibility to several different use cases for broker dealers, investment advisors, tech innovators, app developers and more. They help make it possible for you to build great products by providing the tools, expertise, flexibility, and support to be as successful as possible.
Another one of the standout features of Alpaca is that you can get unlimited access to real-time US stock market data. You can combine the API and quality stock market data for better modelling and backtesting of your strategies. Access true event-based market data streaming via Websockets with nanosecond precision instead of being limited to pulling minute, hourly or daily data. Develop and test your strategies with confidence as there is over 5 years of data. Consolidated financial data with full U.S. market coverage on the unlimited plan. Built to be simple, powerful and scalable, you can access datasets in minutes with one easy-to-use API and build your application in any major programming language you are familiar with. Flexible aggregate bars gives you access to OHLC data in any timeframe that fits you to support your trading strategies.
There are a few data packages to choose from including the following features:
- US Stocks & ETFs
- All US Exchanges
- Real-time Data
- 5+ years
- Unlimited API calls
- Unlimited symbols
- Professional use
Considering how complicated the API may be for some of you to get your head around, it is good to see that Alpaca has a great selection of learning materials to help. These educational resources include videos, step-by-step guides, detailed manuals, blogs, news, and FAQs for beginners. Moreover, Alpaca has an established community on Discord, Slack, and a Forum. This helps you to interact with other traders and learn meaningful things that will be used in your trading journey.
Alpaca Trading offers a few markets that you can trade by yourself or run automated systems on, including cryptocurrencies, stocks and exchange traded funds (ETFs). I find this product portfolio slightly limited as many popular asset classes are not available, including forex, commodities, indices, options, and bonds. IG has a huge product portfolio covering thousands of trading instruments from various asset classes. They also have some industry leading platforms where you can develop and run your automated systems. That being said, Alpaca are one of a few brokers who offer fractional shares. Fractional shares allow you to invest in a portion, rather than a whole share, of a company.
- Crypto: Trade cryptos like BTC, ETH & more
- Stocks & ETFs: Buy and sell stocks & ETFs
Alpaca Trading has a choice between an Individual and Corporate trading account. Whether you’re an individual or business, you can open trading accounts at Alpaca. US Corporations and LLCs established by both U.S. and non-U.S. residents are supported with a $30,000 account minimum. The individual accounts require no minimum deposit to start trading which is great considering some brokers have a minimum deposit into the thousands. On the other hand, the account types are limited. There are no fixed or zero spread accounts, and margin trading and shorting are not allowed on cryptocurrencies. As an alternative options, Forex.com has a good selection of accounts which you can choose from.
Anyone globally can create an Alpaca paper account if you want to demo trade and see what they offer without making a commitment. It allows you to fully utilize the Alpaca API and run your algorithm in our paper trading environment only. You won’t be trading real money, but you will be able to track your simulated activity and balance in the Alpaca web dashboard. All you need to do is sign up with your email address.
Alpaca Brokerage Account
After creating an Alpaca paper account, you can enable live trading by becoming an Alpaca Brokerage Account holder. With a brokerage account, you will be able to fully utilize Alpaca for your automated trading and investing needs. Using the Alpaca API, you’ll be able to buy and sell stocks in your brokerage account, and you’ll receive real-time consolidated market data. All accounts are opened as margin accounts. Accounts with $2,000 or more equity will have access to margin trading and short selling.
It is quick and easy to open an account with Alpaca Trading. You just need to click on the “Sign Up” button on the brokers website and fill in the account application form. In order to satisfy the requirements, set forth by the SEC and FINRA, they have partnered with international KYC providers that verify identity in new and innovative ways. I find that this can speed up the process and shows they are always on the lookout for the latest technologies which is an important thing when dealing with a broker who is so dependent on modern tech. KYC documents vary by country, but generally you require a Tax-ID, and document containing your photo and your address.
The broker has a friendly client support team who are available 24/5 to respond to all inquiries from both registered clients and prospective ones. You can reach out to them via email and social media. The crypto markets are active 24/7 but the broker only provides support on weekdays. Plus500 on the other hand offer cryptos, automated trading and provide you with 24/7 customer support. They are also regulated in multiple jurisdictions.
Traders can deposit and withdraw funds via bank transfers. I think they could improve significantly in this area by providing some other popular payment options, including credit/debit cards, e-wallets, and cryptocurrencies. I don’t always want to wait around for bank transfers to clear but I can appreciate it is one of the most secure methods. If you want quicker access to your trading funds, then easyMarkets has a good selection of deposit and withdrawal methods.
Compare Broker Features
|This Broker||AvaTrade||IG||IC Markets|
|Regulated||ADGM FRSA, ASIC, BVIFSC, CBI, FFAJ, FSCA, IIROC, JFSA||ASIC, BaFin, CFTC, DFSA, FCA, FINMA, FMA, FSA, FSCA, JFSA, MAFF, MAS, METI, NFA||ASIC, CySEC, FSA, SCB|
|Commission||From $0||From $0||From $0|
|Instruments||Forex, Commodities, Crypto, Stocks, Indices, Options, Bonds, ETFs||Forex, Commodities, Crypto, Stocks, Indices, Options, Bonds, ETFs||Forex, Commodities, Crypto, Stocks, Indices, Bonds|
|Platforms||MetaTrader 4, MetaTrader 5, AvaTradeGO, AvaOptions, AvaSocial, DupliTrade, ZuluTrade||MetaTrader 4, IG Platform, IG Progressive Web App, ProRealTime (PRT), L2 Dealer, FIX API||MetaTrader 4, MetaTrader 5, cTrader|
|Funding||Bank Transfer, Credit/Debit Card, E-Wallets||Bank Transfer, Credit/Debit Card, E-Wallets||Bank Transfer, Credit/Debit Card, E-Wallets|
Alpaca is an online brokerage in the USA that gives you access to various markets. You can trade manually or using automated systems via a proprietary platform that is available in web and mobile versions. You are also provided with a good range of educational resources, innovative trading tools, and a very helpful client support team.
There is no minimum deposit required to start trading which means you can try them out with a minimal investment amount. I like how they are regulated by FINRA and SEC as this gives me confidence that they can be trusted.
Overall, Alpaca Trading is a commission-free API brokerage service that enables developers to add to a fast-growing list of apps built to provide differentiated trading experiences. I think they can be a great option for anyone looking for API trading but coverage is limited to the USA and some of you may find it complex to use.