A Stock Trading Application Program Interface or more commonly known as a Stock Trading API is a set of programming code wherein it queries data, analyzes responses, and transmits one software platform to another. Thus, in the context of trading, a trader is going to usually use a Stock Trading API in order to establish a connection between a set of automated trading algorithms and the preference of the trader’s trading broker platform for the purpose of getting real-time pricing data and place trade.
Understanding the Stock Trading API
The stock trading APIs have become increasingly popular especially now that we are in the digital era which led to the rise of automated trading systems. Historically speaking, retail traders were once forced to screen for opportunities using one application and then they separately place their trades with their brokers. There are already a lot of retail brokers who are now providing stock trading API that lets the trader directly connect their screening software with the brokerage account in order to share a real-time quote on prices and placing orders. In fact, traders can develop their very own application that is using programming languages such as Python, and then execute their trades using a broker’s API.
There are currently two types of traders that are using broker APIs, and they are the following:
- The Third-party Applications
There are a lot of traders who are using a third-party application that is requiring access to broker APIs for pricing data and the capacity to put in trades. One good example is MetaTrader; this platform is one of the most popular foreign exchange or “Forex” trading applications and this requires API access in order to obtain secure real-time pricing and also be able to place trades.
- The Developer Applications
There is already an increasing number of traders who are developing their own automated trading systems. They are using programming languages such as Python and they also require ways in order to access pricing data and place trades..
Even with the obvious benefits of using stock trading APIs, there are still a number of risks that need to be considered. The reason is that most of these APIs are being provided to a broker’s customer’s free-of-charge; however, there are also some cases wherein a trader may incur additional fees. It is also essential that you are able to understand these fees before you proceed in using the stock trading API. Furthermore, traders should also be made aware of any API limitation and that includes the potential for downtime, and this may have a significant effect on the trading results.
Where to Look for Stock Trading APIs
Some of the most popular brokers that are supporting API access in the traditional stock and futures market are TradeStation, TDAmeritrade, and InteractiveBrokers. However, there are already a number of small brokers who have expenses their access over time. APIs are also more common among foreign exchange brokers wherein third-party applications and trading systems like that of MetaTrader have been commonly used for a number of years.
There have been a lot of brokers who are providing online documentation for their APIs wherein developers can also find out exactly how to authenticate with the API, what type of data is made available for consumptions, how they can place orders through the API, and other sorts of technical details. It is also important to be familiar with these types of details before you choose a broker if in the event that you are looking for certain functionality.
There are also some brokers who also provide libraries in various languages in order to make the interaction with their API easier. To illustrate, a broker may offer you a Python library that will provide you with sets of functions or methods when it comes to placing a trade instead of having to write your own function to do such thing. With this, it will be able to help in the acceleration of the development of trading systems and also to make them less costly to develop.
The ETNA Stock Trading API
We now all know that stock trading APIs are designed in order to help firms build digital wealth management apps that are requiring live trading, fractional shares, and real-time market data. Today, online brokers, FinTechs, portfolio managers, digital advisors among others, are now taking advantage of leveraging Trading API in order to automate trade submissions, positions, and account balances. With ETNA’s stock trading API, they can offer you with multi-asset trading functionality and they are also seamlessly integrated and can be easily configured in order to fit with your pre-existing environment. You can now leverage years of trading technology experience with ETNA’s stock trading API in order for you to launch new online investing products or even enhance existing offers..
Eleven Reasons Why You Should Choose ETNA
- ETNA is a Trading API which powers the leading online brokers in the United States and Canada.
- ETNA is built for FinTech developers by developers who are also responsible for the award-winning ETNA Trader Platform.
- ETNA is an independent technology vendor where it connects you to a custodian of accounts, market data and execution venues of your choice.
- ETNA has trade allocations and Fractional Shares support.
- ETNA has virtual exchange and simulated or paper-trading for education, demonstration and testing purposes.
- ETNA has a pre-integrated connection or it can even establish a new with the help of ETNA Integration Team or by using self-service models.
- ETNA is an easily customizable trading API that has multiple rule engines.
- ETNA also allows easy integration, great documentation, and tech support.
- ETNA has an integrated back-office application in order to manage users, accounts, positions, orders, margins, commissions, and execution routes.
- ETNA supports the multi-leg option strategies along with their optimization.
- ETNA is a cloud hosted scalable platform as a service.
In sum, an API is a way for you to establish a connection between the coded algorithms and a broker’s platform. Thus, an API is indeed essential when it comes to the implementation of an automated trading strategy, and in order to make it work, you should be able to choose the right platform for you.