Generally, traditional retail order flow will not result in any commissions being charged. Retail order flow allows us and other broker dealers to offer most of our brokerage services without a charge. If an account has been flagged for potential non-retail trading, the client will be contacted, and the account will undergo a review process by Alpaca Trading Services. If the review finds that the account participates in non-retail trading activities, then the client will be informed that their account will be adjusted to the non-retail line.
While this list is not exhaustive, here are some things that may flag an account as a non-retail trader:
- Large Ticket Size: If the average order size is greater than 10,000 shares or over $200,000 in notional value per trading day.
- Low Fill to Cancellation Ratio: Does the account have a higher-than-normal ratio of cancellations per order filled? For example, is the fill rate for an account less than 1% of all orders placed?
- Open/Close Auction: Are you actively targeting the opening and closing auction as your primary method of trading?
- Breaking Up Orders: Is the trader purposefully splitting up larger orders into smaller orders even though the size is available to fill the whole order? I.E. A 100 share order is split into 100, 1 share orders for execution when the top of book size is 20x30
- High Frequency Trading: Does the account show signs of high-frequency trading? Ie. creating and canceling orders in a rapid fashion (pinging the market)?
- Trading Professional: You are either a registered individual or conduct trading as primary means of generating income (full time or part-time). This also includes hiring a professional to trade on your behalf.