Alpaca now supports limit orders and extended hours trading for fractional shares.
As noted in a blog post from Alpaca, trading in fractional shares is considered to be “a crucial tool for investors.”
Alpaca says that it opens the door “for individuals to invest in stocks that may have been out of reach otherwise.”
According to the update from Alpaca, fractional orders also “enables ultra-fine precise asset allocation and portfolio weightings.”
Portfolios, regardless of their size, can leverage this feature. Alpaca’s fractional shares trading platform is powered by their custom-built Order Management System (OMS), “designed for ultra-low latency and scale to accommodate millions of investors worldwide.”
Today, this feature extends to “support limit fractional quantity or notional value, in addition to market orders we previously supported (stop and stop limit will also be coming soon).”
These additional order types are said to be “essential to manage the risks in the fast-moving market and fractional shares trading can now be used for advanced trading strategies for better risk management.”
The support of limit orders for fractional shares trading comes “with pre-market (4:00 a.m. – 9:30 a.m. ET) and post-market (4:00 p.m. – 8:00 p.m. ET) support in addition to the regular trading hours.”
Expansion of fractional shares to extended hours “gives more opportunities to global investors, who will enjoy fractional shares trading in their morning and afternoon in Asian, Middle East, and European time zones.”
These new capabilities are integrated into “the existing API, and your code can start using them with minimal effort (please see below for more details).”
Alpaca is committed to “keeping the API simple and easy to use.”
The introduction of these new features positions Alpaca at the forefront of the retail trading sector, “setting it apart from many other brokerage firms that do not offer the same extensive range of options as Alpaca’s fractional trading offering.”
With over 5,000 fractional assets available for trading, Alpaca has managed “to maintain high standards of execution quality and speed.”
This achievement comes despite the challenges of market risks, thanks to their sophisticated risk management technologies and “adherence to regulatory requirements, including trade reporting.”
The advancement of their fractional shares trading is in line with their mission of opening financial services “to everyone on the planet by building a global de-facto standard investment platform.”
Alpaca continues to invest in their technology and brokerage services to “provide better experiences to investors worldwide.”
Through Broker API, you can now “allow your customers to trade fractional and notional amounts during their localized trading hours, further improving access to US markets internationally.”
With the same Orders API you use today, just update your API call “to specify the extended hours flag and change the order type to limit. No other changes are needed.”
You are able to use the Assets API to determine which symbols “are eligible for fractional trading in extended hours.”
Additional order type support for fractional shares trading gives “more precision to your rebalancing and direct indexing strategies.”
Clients can now avoid unexpected price movement “with these order types while you are automatically rebalancing your portfolio to adjust to your model. It also gives you a more mathematically precise way of trading to maximize your capital efficiency in an automated fashion.”
Trades can now be expressed with a fractional amount, “whether it’s for a specific quantity (e.g., 2.6 shares) or a notional amount (e.g., $25 of AAPL).”
