Today, we’re proud to announce that multi-leg (Level 3) options trading is available with Trading API. This is a significant milestone that displays our continued growth since our initial options launch in May of 2024, when we announced Level 1 and 2 US options. By providing Level 3 options trading, we continue to empower our trading community to build and test more advanced option strategies including: straddles, strangles, iron butterflies and iron condors, and various spreads (like credit, debit, and calendar).
Unlock Advanced Options Strategies
Options are a comprehensive asset class that offers strategic hedging, speculation, and potential income generation. And now, with Level 3 options, investors have more versatility in their options trading strategies.
First, investors can capitalize on various market conditions by taking advantage of volatility, range-bound price movements, and directional trends. Second, Level 3 options increase efficiency by combining multiple options contracts into a single trade. This streamlined approach can save investors time and be more cost efficient. Finally, advanced options strategies improve risk management by executing all components of a strategy simultaneously– shielding investors from unhedged risks and unexpected market shifts.
Our Trading API community can still expect an easy-to-use and reliable platform including: free real-time market data, a paper testing environment, and updated documentation. Starting today, developers and investors can now test, backtest, and implement Level 3 options strategies, commission free*, via our Trading API or web dashboard.
Get Started with Multi-Leg Options
New Traders
If you’re new to Alpaca, you can start trading options by signing up for a free Trading API account and connecting it to our paper trading environment. If you are looking to live trade, click the “Open Live Account” in the top right of your dashboard and follow the appropriate steps.
Please note: All paper trading accounts will automatically have access to Level 3 strategies. You will need to apply if you plan on live trading.
Existing Traders
For existing users, you can check your options approvals by logging in to your account and clicking on the “Configure” tab under the “Account” menu of your Dashboard. If you only have a paper account and are looking to live trade, click the “Open Live Account” in the top right of your dashboard and follow the appropriate steps.
Please note: It’s important to check your current configurations under the appropriate “Live” or “Paper” account. All paper trading accounts will have access to Level 3 options. You only need to apply if you plan on live trading.
Applying for Level 3 Options
If you’d like to live trade Level 3 options, you can apply by navigating to the “Home” page, and in the top right, to the left of “Add Funds”, there will be an option to apply for options trading. Follow the steps to get approved.
Both new and existing traders can learn more about applying for Level 3 options and executing multi-leg trades in our tutorial on how to trade options with Alpaca.
Additional Resources
Those looking to build options algorithms can explore our resources:
- Watch our YouTube tutorial on how to trade multi-leg options with Alpaca’s Trading API.
- Read about the different Level 3 options trading strategies.
- Documentation: Options trading.
- Refer to our learn page for more options trading tutorials.
For Broker API partners, we are expecting to deliver Level 3 options soon.
*Commission-free trading means that there are no commission charges for Alpaca self-directed individual cash brokerage accounts that trade U.S.-listed securities through an API. Relevant regulatory fees may apply. Commission-free trading is available to Alpaca's retail customers. Alpaca reserves the right to charge additional fees if it is determined that order flow is non-retail in nature.
Options trading is not suitable for all investors due to its inherent high risk, which can potentially result in significant losses. Please read Characteristics and Risks of Standardized Options before investing in options.
Past hypothetical backtest results do not guarantee future returns, and actual results may vary from the analysis.
The Paper Trading API is offered by AlpacaDB, Inc. and does not require real money or permit a user to transact in real securities in the market. Providing use of the Paper Trading API is not an offer or solicitation to buy or sell securities, securities derivative or futures products of any kind, or any type of trading or investment advice, recommendation or strategy, given or in any manner endorsed by AlpacaDB, Inc. or any AlpacaDB, Inc. affiliate and the information made available through the Paper Trading API is not an offer or solicitation of any kind in any jurisdiction where AlpacaDB, Inc. or any AlpacaDB, Inc. affiliate (collectively, “Alpaca”) is not authorized to do business.
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.
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.
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.
This is not an offer, solicitation of an offer, or advice to buy or sell securities or open a brokerage account in any jurisdiction where Alpaca Securities are not registered or licensed, as applicable.
