Alpaca Markets vs Composer: How do they compare?
The key differences between Composer and Alpaca Markets
What are the main differences between Composer and Alpaca?
As much as 78% of all trades (according to the SEC) are executed by stock trading algorithms. Two of the most popular platforms to build a stock trading bot include Composer and Alpaca. There's often some confusion between the two platforms so I'll start with a high level overview.
Alpaca is a brokerage platform founded in 2015 and provides you with access to the financial markets via an API. This means that if you have strong programming skills (in Python for example), you can connect to the API and create a stock trading bot from scratch.
Composer on the other hand is a platform that is built on top of the Alpaca API that offers you the ability to create a stock trading bot with no coding required. There's a simple visual editor and an AI assistant to help you get started.
I've separated the key differences in this short article below:
Pricing
Pricing is one of the most important factors to consider when setting up a stock trading bot.
If you want to create your trading bot through Alpaca, you’ll need their Trader Professional plan for $99 per month which gives you access to their API with no historical data delay and access to all US stock exchanges.
Composer Pro offers you the same real-time professional grade data, access to all US stocks and ETFs for $24 a month (paid annually) or $30 a month (paid monthly). Excluding regulatory fees and slippage, this allows you to invest in as many trading bots as you wish for a fraction of the cost of setting up on Alpaca API.
User Interface & Platform Access
With a visual no-code strategy builder, Composer offers an easy way to understand the logic behind your strategy. This enables both beginners as well as advanced traders to build strategies with ease. The best way to experience Composer is via desktop as the screen size enables you to make the most of the backtesting functionality as well as the strategy creator. Note: Composer also lets you login via mobile if you wish you check in on your investments.
On the other hand, creating a trading bot with Alpaca is limited to users who have strong programming skills and can code with their API. However, if you do have this skillset you have much greater flexibility with the Alpaca API. Alpaca offer SDKs written in Python, Go, NodeJS, and C#.
Brokerages & Deposit Security
Both platforms offer top-notch security.
Alpaca offers SIPC security up to $500k. Alpaca is a registered broker/dealer with FINRA and the primary custodian is tier-1 bank BMO Harris. Note that cryptocurrency trading on Alpaca doesn't offer SIPC.
Composer Securities LLC is a registered broker-dealer with the SEC, member of FINRA / SIPC, and automatically creates an Alpaca brokerage account for you. This means you have exactly the same level of security with $500k in SIPC insurance.
Asset Choice & Transaction Types
Composer is a long-term-focused investing platform offering access to the full range of stocks and ETFs. The structure of the platform allows you to rebalance your strategies at daily, weekly, quarterly, yearly or threshold-based intervals. However, if you're looking to trade a much wider range of assets such as Cryptocurrency, or are looking to use margin above 100% of Net Liquidating Value (NLV), then Alpaca may be a better choice (whereas Composer currently does not margin above 100% of NLV). Therefore, Alpaca is strong proposition if you're looking to use margin.
Both platforms offer the choice to test the platform risk-free. While Alpaca offers paper trading, Composer offers the ability to ‘follow’ strategies with a simulated $1000 that you can track over time and measure out-of-sample performance. In both cases, you can get an indicative performance of your bot without depositing funds.
AI functionality
Composer has recently introduced ChatGPT4 AI copilot to supercharge the investing process. Using ChatGPT you can ask questions about your strategies, find ways to diversify, and continue to improve your returns. Here's some examples of what you can ask: Can you create a retirement strategy with a focus on long term bonds and gold? What are the risks of this strategy? What should I add to diversify this strategy? What type of strategy would be a good complement to this one? You can check out more details here.
Alpaca API does not currently offer this functionality.
Customer Support
Composer's customer support is much more extensive than Alpaca. With a smaller team, Composer offers email, live chat, and zoom calls with the product team. This means you have direct access to help influence how the product is improved going forward.
On the other hand, Alpaca offers email support.
Final Remarks
Based on Composer's transparent pricing, easy to use no-code interface, AI tooling, Composer seems like a logical choice for many people. If you're an experience coder or are looking for cryptocurrencies or margin, Alpaca may be the more suitable choice.
Moreover, building strategies in Composer is a fun activity, and spending time doing so is a great way to get accustomed to how the no-code editor works.
As you do so, we invite you to explore the site and sign up for a free Composer account to get a first-hand impression of what our platform can do for you.
We'd be happy to have you on our side, and provide you with the best automated stock trading platform there is!
Important Disclosures
Investing in securities involves risks, including the risk of loss, including principal. Composer Securities LLC is a broker-dealer registered with the SEC and member of FINRA / SIPC. The SEC has not approved this message.
Certain information contained in here has been obtained from third-party sources. While taken from sources believed to be reliable, Composer has not independently verified such information and makes no representations about the accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; Composer has not reviewed such advertisements and does not endorse any advertising content contained therein.
This content is provided for informational purposes only, as it was prepared without regard to any specific objectives, or financial circumstances, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not intended as a recommendation to purchase or sell any security and performance of certain hypothetical scenarios described herein is not necessarily indicative of actual results. Any investments referred to, or described are not representative of all investments in strategies managed by Composer, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results.
Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see Composer's Legal Page for additional important information.