Alpaca Trading Review 2020

Alpaca Trading offers zero-commission stock and ETF trading and low margin rates. The non-trading fees are also competitive: there is no account fee or inactivity fees. For wire withdrawals, there is a fee, but this is consistent with other US brokers.

How we ranked fees

We ranked Alpaca Trading's fee levels as low, average or high based on how they compare to those of all reviewed brokers.

To get things rolling, let's go over some lingo related to broker fees. What you need to keep an eye on are trading fees, and non-trading fees.

• Trading fees occur when you trade. These can be commissions, spreads, financing rates and conversion fees.
• Non-trading fees include charges not directly related to trading, like withdrawal fees or inactivity fees.

In the sections below, you will find the most relevant fees of Alpaca Trading for each asset class. For example, in the case of stock investing the most important fees are commissions.

We also compared Alpaca Trading's fees with those of two similar brokers we selected, TD Ameritrade and Robinhood. This selection is based on objective factors such as products offered, client profile, fee structure, etc. See a more detailed rundown of Alpaca Trading alternatives.

To have a clear overview of Alpaca Trading, let's start with the trading fees.

Alpaca Trading trading fees

Yes, it is true. Alpaca Trading charges zero commission for US stock and ETF trading.

Stock fees and ETF fees

Alpaca Trading offers zero-commission stock and ETF trading, similar to US stockbrokers TD Ameritrade and Robinhood. None of these brokers offer international stocks.

If you prefer stock trading on margin, you should check Alpaca Trading financing rates.

The margin rate is charged when you trade on margin. This basically means that you borrow money or stocks from your broker to trade. For this borrowed money/stock you have to pay interest. It can be a significant proportion of your trading costs.

Non-trading fees

Alpaca Trading has low non-trading fees. There are no fees for inactivity or account maintenance. 

There are free deposits and ACH withdrawals are free of charge. Wires will cost $25 for domestic and $50 for international. 

Opening an account with Alpaca is quick and digital, with no minimum deposit required. Our account was verified within one business day. Integrating your Alpaca account with third-party softwares can be a bit complicated, but there is great guidance on Alpaca's website.

Can you open an account?

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In general, Alpaca Trading is available only for US residents.

On the other hand, there is a beta live trading account for non-US residents. These beta accounts are available if you deposit $30k and you are OK with depositing via wire transfer. You can read here more.

What is the minimum deposit at Alpaca Trading?

The required Alpaca Trading minimum deposit is $0 for individual accounts. This is great for those wanting to try out the broker first before investing large sums of money. 

Business Trading Accounts require a minimum deposit of $30,000.

In addition, if you would like to trade on margin or short sell, you need to maintain a balance of $2,000.

Account types

Alpaca Trading provides different account types based on the account's ownership:

• Individual Account - account is owned by an individual.
• Business Trading Account - account is owned by a legal entity. This account types are in beta version, you can read about business accounts here in detail.

Unfortunately, tax-advantaged accounts, like IRA, are not available.

How to open your account

Alpaca Trading's account opening is easy and quick. Our account was verified within 1 business day. 

On the other hand, setting up different third-party tools is a bit cumbersome. To open your Alpaca account, you need to go through the following steps:

1. Enter your email and desired password.
2. Verify your email address with Alpaca's six-digit code.
3. Click on whether you are a US resident or not (providing access to the available accounts by residence).
4. Fill out the rest of the information, including social security number, home address, phone number, etc.
5. Your account will be opened, you can now choose to fund your account.
6. Setting up your account requires authorizing IFTT and downloading TradingView.

Alpaca provides easy-to-use and free withdrawal and deposits through bank transfer. Similar to the other US brokers, Alpaca does not support multiple currencies or credit/debit card funding. Furthermore, there is a high fee for wire withdrawals.

Account base currencies

At Alpaca Trading, you can hold your cash only in USD. 

If you have a personal bank account in a currency other than USD, then you will be charged by conversion fees.

A convenient way to save on currency conversion fees is by opening a multi-currency bank account at a digital bank. These usually offer bank accounts in several currencies with great currency exchange rates, as well as free or cheap international bank transfers. Opening an account only takes a few minutes on your phone.

Compare digital banks

Deposit fees and options

Alpaca Trading charges no deposit fees. Like other US brokers, credit/debit card and electronic wallet use are not supported. 

A bank transfer can take several business days and you can only deposit money from accounts that are in your name.

Once you deposit funds, they will be held from being withdrawn for 6 business days. 

Alpaca Trading withdrawal fees and options

Alpaca Trading charges no withdrawal fees for ACH withdrawals. To wire money out domestically it will cost $25 and to wire internationally it is $50.

Similarly to deposit, credit/debit cards and electronic wallet use are not supported.

How long does it take to withdraw money from Alpaca Trading? We tested the bank transfer withdrawal and it took less than 3 days.

You can only withdraw money to accounts in your name.

How do you withdraw money from Alpaca Trading?

• Navigate to your Alpaca Homepage.
• Choose the banking icon from the left navigation panel.
• Make sure your bank account is connected, if not, fill in your username and password and allow your bank to authorize Alpaca.
• Choose 'Transfer Money'.
• In the pop-up box, select 'Withdrawal'.
• Fill out the amount you would like to withdraw, your total withdrawable funds is shown in the right side of the box.

More funding and withdrawal info

Alpaca's web trading platform is useful for using alongside the API. It feels safe, user-friendly, and visually pleasing. However, it does not allow for customization, there are no price alerts, and the search function is limited.

Alpaca's web trading platform functions as the 'side-kick' to the Alpaca API. It is simple and easy to use. When you implement trades using code, you can easily check on them, cancel them, or duplicate them in the web platform.

Alpaca focuses on simplicity for its web platform, which is balanced by the many uses and complex functions that the API can provide. The web trading platform is available in English.

Look and feel

The Alpaca Trading web trading platform is user-friendly. The navigation bar on the left provides all relevant pages, and there are links to the Alpaca Slack channel and the Alpaca developers community on GitHub. However, the platform itself is not customizable.

Login and security

Alpaca Trading provides a safer two-step login that can be activated using codes from a mobile device.

Because Alpaca provides an API, the platform keeps users signed in unless they manually sign out, which is useful from the API standpoint. However, users on public devices should be careful to manually sign out.

Search functions

The search functions are OK. You can only search by ticker symbol, so you must search for the stock's ticker on the web if you only know the company name or industry. We wish there were options to search by name and industry on Alpaca's page.

Furthermore, once you navigate to a stock, the name of the stock is only shown in the bottom description.  It would be conveinent if the stock name would be in the title so that users easily know if they've searched for the right instrument. 

Placing orders

You can use the following order types:

• Market
• Limit
• Stop Limit
• Stop

To get a better understanding of these terms, read this overview of order types.

There are also order time limits you can use: Good til canceled, Fill or Kill, Immediate or Cancel, At the Open, At the Close.

Alerts and notifications

You cannot set price alerts and notifications. Instead, there is a "Watchlist" that you can add stocks and ETFs to that will allow you to quickly see daily changes in stock price. Futhermore, using the API you can push market data through to your algorithm.  We still wish that there were price alerts in the web platform.

Portfolio and fee reports

Alpaca Trading has clear portfolio and fee reports. You can access them by clicking on "Account Activities".  

Visit web platform page

Although we said the web platform was simple, the mobile platform is even more so. It is very easy to use, but, similar to the web platform, no price alerts and a poor search function. Also, logging in is not so simple.

Similarly to Alpaca Trading's web platform, you can use Alpaca Trading's own developed mobile trading platform. The app is available both for iOS and Android. In this review, we tested it on iOS.

Overall, the app is designed to be paired with the API. There are emergency buttons, for example to stop all trades, which are helpful for users using codes to execute trades automatically. 

Look and feel

The Alpaca Trading mobile trading platform is user-friendly and very simple. You will find easily all features.

Login and security

Alpaca Trading provides a safe login with 2-step. Signing in is not easy, the app directs you to the mobile website to fill in your username and password, which is not saved after you log in once. However, once you sign in on your device, you are signed in as long as you don't sign out. 

You can't log in using biometric authentication. Providing this feature would be more convenient.

Search functions

The search functions are OK. You can only search by ticker symbol, and on the app it is harder to tell which stocks are which because there is less information on each page compared to the web platform.

Placing orders

You can use the same order types and order terms as on the web trading platform.

Alerts and notifications

You cannot set alerts and notifications on the Alpaca Trading mobile platform.

Find out more

Alpaca Trading does not offer a desktop trading platform.

Find out more

Alpaca Trading currently only provides access to US stocks and ETFs. Other asset classes, like options or bonds, and international market coverage are missing.

Unlike Alpaca Trading's competitors, there are only stocks and ETFs available at Alpaca Trading.

Stocks and ETFs

You can invest in stocks and ETFs listed on the biggest US markets, like NYSE or NASDAQ. This is similar to Alpaca's competitors.

Alpaca provides highly capable API and great charting tools. In addition, you can find some fundamental data. However, we do mention that Alpaca does not provide recommended trading ideas.

Overall, we felt that Alpaca Trading provides excellent research tools because of the capabilities of the API and the information on the web platform. 

Alpaca's API (Application Programming Interface)

As the first-mover in the space of commission-free API stockbroker, Alpaca is opening up space for retail traders to use technology to create their own algorithms that the institutional traders have had access to for years.

The Alpaca API allows users to integrate market data using the Polygon API and to backtest using Blueshift. It is easy to use your paper trading account to test Alpaca capabilities, and there are lots of good documentation about how to begin. The Alpaca API is available in programming languages Python, Javascript, C#, and Golang. 

Most users that come to the Alpaca API will have some coding experience, which helps greatly because the amount of capabilities are endless, which means that a lot of learning will need to be done to master the API's functionalities as well as learn the fundamentals of algo trading. 

When we tested the Alpaca API using Python, we used web resources as well as official Alpaca documentation to set up basic functions. We found that grabbing basic historical data and implementing trades were simple and easy to implement. Overall, we feel that especially for users using Python, Alpaca provides an excellent platform. 

Some competitors for Alpaca's API include Interactive Brokers API for R, Python, or C++ users, Quantopian for Python users, or QuantConnect for Python and C#.  

Fundamental data

Fundamental data is also provided through coding, but you need to use Polygon's API, which is provided free.  Eventually, Alpaca aims to provide fundamental data through its API directly, but for now, users need to use a combination of the two for research capabilities. There are great capabilities when using these APIs in conjunction with one another, but we note that it requires reading and learning from multiple documentations. 

Note: For users with Paper Trading accounts, Alpha Vantage's API provides fundamental and historical data instead of Polygon. This may cause minor disruption since users will usually need to train their algorithm using paper trading and then change the code when using their real time trading account.

Charting

Alpaca Trading has good charting tools on the web platform, provided by TradingView. You can use ~90 technical indicators. TradingView's charting is integrated into the platform, which enables users to use the highest quality charting. 

News feed

Alpaca only provides news headlines and stories through Polygon. It would be useful to have these capabilities on the web platform as well. 

Trading ideas

Alpaca Trading does not provide trading ideas.  We note that Alpaca has a community of algo-traders available on Slack and GitHub that may recommend strategies or stocks to one another instead. 

More research info

Alpaca Trading has a great customer community forums, where developers can easily solve their problems. On the negative side, the email support is mediocre and the phone or live chat customer channels are missing.

You can contact Alpaca Trading only via email. In addition, you can use Alpaca's Slack or other community forums, where users can easily get help from other users.  

In email, we got quick and OK answers. If you are looking for detailed responses, this is not the support for you. Their support is mostly limited to technical issues. 

When we inquired about more general investing help and questions about their service, the responses were short and not necessarily relevant. We were directed to general links like their FAQ page and the API Documentation page, which didn't necessarily have the right information. 

Contact customer service

Alpaca provides videos and step by step guidance for investing, algorithm trading, and use of their API. Alpaca realizes that their customer base might be new to algo trading, coding, and/or investing and tries to support these beginners through its thorough documentation and help pages. The only thing we missed was the webinars.

Alpaca Trading may not provide decent customer support, but they are investing in thorough and helpful API Documentation, Educational videos, and FAQ pages.  This is especially helpful for self-starters. Alpaca provides a very useful paper trading account, not only for US residents but for anyone worldwide. The paper account can help test your algorithm and train it before risking your money.

At Alpaca Trading you can learn in the following ways:

• Demo account
• Platform tutorial videos
• General educational videos
• Quality educational articles

Visit education page

Alpaca Trading is regulated by SEC and FINRA protection, which are top-tier financial authorities. The investor protection amount is high, up to $500k with a limit of 250k cash. However, Alpaca is still a young startup without a banking license and is not publicly traded, which means it is less transparent that other brokers.

Is Alpaca Trading regulated?

Yes, it is regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Alpaca Trading is based in the USA and was founded in 2015.

Is Alpaca Trading safe?

To be certain, we highly advise that you check two facts:

• how you are protected if something goes wrong
• what the background of the broker is

How you are protected

At Alpaca Trading, all customers are served by Alpaca Securities LLC and covered by the US investor protection scheme, called SIPC. 

The SIPC investor protection scheme protects against the loss of cash and securities in case the broker goes bust. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash. This amount is substantially higher than the amount most investor protection schemes provide. 

Alpaca Trading does not provide negative balance protection. If the balance on your account goes into negative, you will not be protected. This is important because Alpaca provides margin trading, which means that if your investment loses too much, your account can be liquified and you can potentially owe more money than you risked. 

Background

Alpaca Trading was established in 2015. The longer track record a broker has, the more proof we have that it has successfully survived previous financial crises. 

Find your safe broker

Alpaca Trading is a great broker for traders looking to build their own algorithms and focusing on the US market.

The API tools are extremely great and the fees are low: zero commission, no inactivity, or deposit fees. In addition, Alpaca provides free access to software such as Polygon, Alpha Vantage, and TradingView, which have great research capabilities. 

On the other hand, Alpaca has limited customer support. For technical issues, their email support is available, otherwise, customers are directed to GitHub where other community users can help debug code or offer suggestions. Further, you can use only bank transfer to deposit or withdraw Lastly, it must be noted that Alpaca only provides access to US stocks and ETFs.

Overall, for users interested in algo trading, Alpaca is an up and coming broker that is constantly improving its products and adjusting to technological advancements. It is unique in its current space and provides a great product for traders from all different experience levels. If you are looking for a strong and savy API stockbroker, join Alpaca and see what the hype is about. 

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