Q - How is Alpaca different from a traditional brokerage account?
Functionally an Alpaca Securities LLC (“Alpaca”) account is no different than any other brokerage account. However there are important differences and limitations that you should be aware of which may influence your decision to open an account.
All interactions with Alpaca will be either online, via email, or through programing code that you must write. Access to Alpaca by telephone will be extremely limited as the company does not have a telephone system or publicly available telephone number.
The initial setup for your account will be through a web interface; there is no ability to open an account using paper documents and you must agree to sign all opening account documents electronically through the web interface.
When the account is setup, you are provided with a customer dashboard to link bank accounts, transfer funds to or from your bank, view account information, open orders, your account balance, your securities positions, trade confirmations, account statements, and tax documents. You should also know that there is no ability to place a trade through the customer dashboard.
Not a Full Service Broker
Alpaca does not provide certain services that other full service brokers provide, such as the ability to transfer securities positions and account balances from or to another broker, open a joint account, open an IRA account, or open an account for an entity or trust.
You Must Be Capable of Writing Your Own Code
In order to place trades, you must write your own program to place trades through the Alpaca API. We support most programming languages and have sample code available to modify to meet your own needs. Currently your program must run on your own computer and access the API through a commercially available internet service provider. Alternatively, you could purchase access to and run your program on a cloud service.
Please note that there are specific risks associated with running your own automated code which can be found here.
Finally, all investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk it does not assure a profit, or protect against loss, in a down market. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.