"Going live with a strategy - which broker should I use?"
By Dave Mabe
Here's a question from Charles B. (name used with permission, lightly edited for clarity.)
Charles B:
After many weeks of building and refining a systematic trading setup, I’ve reached the point where I need to decide whether to stay with my current broker, Ocean One STG for API access, or move to another platform.
I believe you use Interactive Brokers (although I’m not 100% sure). Ocean One’s API fee is $100 per month, but the commissions and ECN fees are relatively high.
Dave:
(Note - unlike most who recommend specific brokers, I choose NOT to participate in their affiliate programs, so any recommendations I give aren't based on any kickback.)
Everyone's situation is unique, so there's no blanket, one-size-fits-all recommendation for brokerages, even for systematic traders.
But I can tell you what I use.
I have used Interactive Brokers forever because I'm so comfortable with their platform.
I also use a DAS-based brokerage called ThinkAlpha.
Why two brokers?
Two main reasons: short locates and diversification.
Of all the major brokers (who don't offer short locates), IBKR has the best hard-to-borrow list (last I checked).
But, HTB availability with IBKR isn't perfect.
For the strategies I trade where locates are important, I use DAS (via ThinkAlpha).
In fact, the Trade Client software with MabeKit I use to enter my trades sends trades to both platforms.
I recently added a mode that tries IBKR first, then falls back to DAS if the trade is rejected due to borrow. (If this interests you, hit reply and let me know.)
The other main reason is diversification.
I don't want all my capital tied up in a single place where a single trade could theoretically wipe out my account.
-Dave
P.S. See the podcast episode we did on this topic, and the interview with Brandon from Cesta, another DAS-based brokerage.