Alpaca is excited to announce the expansion of our Broker API to support US Treasuries and recently launched with our first partner for trading and custody. The global fixed-income market is the largest securities-based asset class at approximately $140T value outstanding1, with US Treasuries representing the largest segment by size2 and trading volume3 within the largest geographic fixed-income market in the world.
This launch marks a significant step forward in our mission to open financial services to everyone on the planet. It also lays a strategic foundation for expanding into additional bond types and fixed-income markets across geographic regions.
Beyond Modernization: Setting the New Standard
Alpaca’s specialized tech stack provides a highly differentiated fixed-income trading infrastructure, designed for becoming the preferred destination for the next generation of global retail order flow. Beyond just table stakes modernization of operational workflows, Alpaca is defining a new standard for how both partners and final-mile customers interact with this asset class across transaction costs, fee structures, and trading functionality.
Equities-Like Trading Experience
Our order book aggregates all quotes across our network of fixed-income liquidity providers for correspondents to execute against in real-time. Whether submitting market orders or marketable limit orders, Alpaca’s infrastructure processes these trades as fast as 2ms on average. Orders are then automatically routed to the most competitive bid/ask available with near instantaneous execution, providing a truly equities-like trading experience. Additionally, orders submitted outside of US bond market hours are automatically queued up on Alpaca’s side. This provides exceptional convenience for international partners with business hours outside of US markets, offloading business logic to Alpaca.
Non-Predatory Fee Schedule
We believe that we can achieve our mission by growing together with our partners, both in terms of user base and economics. In practice, this means that broker-dealers of ours are able to comfortably configure markups 2x of Alpaca’s fee schedule without introducing a predatory yield reduction for final-mile retail customers across the entire yield curve.
Furthermore, we are excited to share that we offer the flexibility of either a price-based markup or yield-based markup model. This helps to align the business model with one’s customer base, whether for RIAs offering model bond portfolios or broker-dealers providing a self-directed trading experience for retail investors. In summary, our pricing structure is designed to be transparent, partner-friendly, and sustainable, prioritizing fair economics to help you build profitable, scalable businesses.
Path to $1 Order Minimums
By leveraging the foundation of our fractional equities trading engine, Alpaca is actively building towards fractional US Treasuries support; namely, $1 order minimums with $0.01 increments. This represents a transformational reduction that is 1/1000th of a whole bond’s par value and 1/100th of US B2C fintech standards today.
“Instead of taking the ‘same ingredients, different packaging’ path, we approached fixed income through first principles. By doing so, we were able to build a truly innovative solution versus something only incremental to what already existed,” says Trevor Walters, Sr. Director of Product, Brokerage at Alpaca.
By lowering the barriers to entry, Alpaca aims to provide seamless platform parity between fixed income and equities trading. This empowers our partners to provide laser-focused allocations for both model portfolios and self-directed bond trading.
Get Started
Interested in learning more about fixed income at Alpaca? For prospective partners, please reach out to Alpaca’s Sales team at [email protected] or fill out the form below.
For existing partners, please contact your Customer Success Manager (CSM) or email the Success team at [email protected].
About Alpaca
Alpaca is a US-headquartered self-clearing broker-dealer and brokerage infrastructure for stocks, ETFs, options, and crypto– raising over USD170 million in funding. Alpaca is backed by top-tier investors globally, including Portage Ventures, Spark Capital, Tribe Capital, Social Leverage, Horizons Ventures, Unbound, SBI Group, Derayah Financial, Elefund, and Y Combinator.
References:
- 2024 SIFMA Factbook, pg. 9, https://www.sifma.org/wp-content/uploads/2023/07/2024-SIFMA-Capital-Markets-Factbook.pdf
- April 2024 SIFMA Fixed Income Market Structure Compendium, pg. 7 https://www.sifma.org/wp-content/uploads/2024/04/SIFMA-Insights-Fixed-Income-Market-Structure-Compendium_2-26.pdf
- April 2024 SIFMA Fixed Income Market Structure Compendium, pg. 14 https://www.sifma.org/wp-content/uploads/2024/04/SIFMA-Insights-Fixed-Income-Market-Structure-Compendium_2-26.pdf
Please note that this article is for general informational purposes only and is believed to be accurate as of the posting date but may be subject to change. The examples above are for illustrative purposes only.
Fixed income securities can experience a greater risk of principal loss when interest rates rise. These investments are also subject to additional risks, including credit quality fluctuations, market volatility, liquidity constraints, prepayment or early redemption, corporate actions, tax implications, and other influencing factors.
All investments involve risk, and the past performance of a security, or financial product does not guarantee future results or returns. There is no guarantee that any investment strategy will achieve its objectives. Please note that diversification does not ensure a profit, or protect against loss. 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.
The testimonials, statements, and opinions presented on the website are applicable to the specific individuals. It is important to note that individual circumstances may vary, and may not be representative of the experience of others. There are no guarantees of future performance or success. The testimonials are voluntarily provided and are not paid, nor were they provided with free products, services or any other benefit in exchange for said statements.
Securities brokerage services are provided by Alpaca Securities LLC ("Alpaca Securities"), member FINRA/SIPC, a wholly-owned subsidiary of AlpacaDB, Inc. Technology and services are offered by AlpacaDB, Inc.
Cryptocurrency services are made available by Alpaca Crypto LLC ("Alpaca Crypto"), a FinCEN registered money services business (NMLS # 2160858), and a wholly-owned subsidiary of AlpacaDB, Inc. Alpaca Crypto is not a member of SIPC or FINRA. Cryptocurrencies are not stocks and your cryptocurrency investments are not protected by either FDIC or SIPC. Please see the Disclosure Library for more information.
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