Readers of the Finance Magnates Fintech section will have seen the name Tradier come up often. A creator of what they call an ‘API Brokerage’, the firm has inked deals with numerous trading technology developers such as QuantConnect, Option Samurai and Instavest. With interest growing for their services, today’s Fintech Spotlight focuses on the company behind these recent partnerships.
What is a ‘Brokerage API’?
At its core, Tradier is a US equities and options trading broker. What sets it apart, is that rather than soliciting its own clients through the creation of a proprietary platform, Tradier focuses on enabling technology and platform providers to offer brokerage services to their clients. To do this, Tradier created an API framework of its brokerage services that can be integrated to external platforms. The result, is that traders ultimately have a brokerage account with Tradier, but the front-end for their trading and analysis is with a separate firm.
Speaking with Craig Russell, Senior VP of Product and Chief Evangelist at Tradier, he stated to Finance Magnates that from the firm’s inception, “API first enablement, has always been the vision of the firm”. As such, their goal was to create a structure that could connect “great technology on our API”. Russell explained that connections vary between partners, with some only integrating basic brokerage services such as sending orders and account information, while other are using market data from Tradier to power sophisticated market analysis products.
One account, many platforms
For end users, one of the results of Tradier’s model, is that it avails them the ability to use multiple front ends, with one account. As such, after a customer opens a Tradier account with Scutify, and uses that social investing platform to trade stocks, they can also connect with Orca, to use their service to buy and sell options.
One potential worry though for Tradier’s partners is that the overlap of products could cannibalize activity on their platform. For example, Tradier currently connects with multiple options analysis platforms such as Option Samurai, Orca, OptionVue and Option Pit.
Answering whether there is a risk of product overlap among its partners, Russell acknowledged that there are similarities among connected platforms. However, he stated that “at the end of the day this is a benefit to clients since end-users get a variety of technology to choose from”. Russell explained that the reality is that traders will typically use multiple products to analyze and trade the market. Therefore, technology partners benefit as Tradier account holders try different systems to fit their needs. As such, Russell explained that the partnership with developers isn’t simply one where they refer customers to Tradier in exchange for brokerage services, but a “two way street”.
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In terms of adding partners, Russell explained that the firm is both approached by technology providers as well as searches for platforms that they feel will be a good fit for their Brokerage API. As part of the integration, there is a vetting process where Tradier reviews potential partners to ensure it’s a good fit. Once approved, partners decide which features of the API they want to integrate, with Tradier providing several data connection solutions such as REST API.
Today’s world it is a multi-asset trading world – Craig Russell
In regards to regulatory restrictions, Russell explained that they are currently working with both US and non-US technology developers. As technology firms, Tradier’s partners aren’t required to be registered as broker dealers themselves, but are listed as software vendors.
While open to international developers, Tradier currently only accepts end-user clients from the US. However, among the firm’s futures plans is an international expansion to allow for onboarding of non-US account holders.
In addition, Russell mentioned that the firm has received interest for additional asset classes beyond just stocks and options. As such, Russell explained that “today’s world it is a multi-asset trading world”, with Tradier “actively pursuing what it would take” to add additional products such as futures and forex trading.
Fintech Spotlight is a new column on Finance Magnates devoted to reviewing innovative financial technology companies and sector trends.