Show HN: Stock Trading with Insomnia REST Client and Alpaca API

71 pointsshift87y ago36 comments

I've created an Insomnia workspace to make it easier to debug your stock trading code and learn the Alpaca API. You can read about how here: https://medium.com/automation-generation/using-alpacas-stock...

The actual workspace JSON for you to import into Insomnia can be found here: https://github.com/alpacahq/insomnia-workspace

36 comments

nodesocket7y ago

I've been playing with the Alpaca streaming API's in Node to get quotes. I have it working, the next step is figure out a trading algorithm.

I am a pretty traditional long term investor, $AAPL, Berkshire, Bank of America, Ford, Amazon, AMD, $SPY, with 10+ years in the market. However with the crazy volatility, I have been toying with the idea of buying ProShares UltraPro Short $SQQQ to hedge my losses on big pre-market open down days. Today for example would have been a good day to own $SQQQ for the day (up 7.3%). Any insight on how to go about this hedge strategy using Alpaca? Can I get pre-market quotes for the Nasdaq?

97122637y ago

Seems inherit the same limitation of RobinHood: you can't do short selling. Not sure how actually they could do a free commission order, so not sure why short selling is not supported, but it limits the use of long only strategy.

anonu7y ago

Interesting. I suppose it's a much more involved process where you need to locate shares to borrow. You need to maintain a list of easy to borrow and hard to borrow names. ETFs by definition are hard to borrow.

I used to work next to the stock loan desk at a bank. The equity markets are generally pretty tech driven these days but stock loan is still operating in a 1980s mentality.

ta12345678907y ago

Open question: If, for one stock, you could predict tomorrow's closing price today (with 80% accuracy within 2% of the actual price), how would you trade that stock?

kgwgk7y ago

It's easy to predict tomorrow's closing price with that accuracy: it will be the same as today's closing price.

For a large majority of S&P 500 stocks this prediction will be within 2% of the actual price very often (more than 80% of the days). In aggregate, the hit rate is over 80% as well.

ta12345678907y ago

Great, so how do you use that for a trading strategy?

2 more replies

hueving7y ago

How far will it move if it doesn't land within the "80% accuracy"?

18nleung7y ago

Try an iron condor - you’ll profit if the price of the underlying asset stays between two points

1 more reply

pmalynin7y ago

Buy call / puts (depending on the current price) near the target price, with very close expiry dates. This would maximize your convexity.

thisisit7y ago

The bigger question is - what happens if you get the price 20% wrong? This might look like a winning strategy in a normal and calm market. But, it'll take only one day to wipe out all the gains.

ta12345678907y ago

That's an excellent question. It all depends on the strategy. How would you address that scenario?

hartator7y ago

More than 80% of stocks will close within 2% of previous day closing price.

rpedela7y ago

Alpaca looks awesome, but doesn't support after hours trading. Does anyone know of a good API that does?

malhotra_chetan7y ago

Yes. Narwhal. Narwhal provides commission free flat rate brokerage trading via tradier and you can trade both in pre and post market hours.

1 more reply

hellofunk7y ago

How is the access to historical data with these services?

kaycebasques7y ago

A commission-free trading API? How does Alpaca make money?

gschier7y ago

Likely the same as similar services like RobinHood. A quick Google suggests they make most of their money on interest from cash sitting around in user's accounts that has not been invested yet.

JonasJSchreiber7y ago

And by selling info about customer orders to front runners. IIUC, these are high frequency traders who may place similar orders milliseconds in advance of yours then profit from the fact that you have to pay a bit more to fill your order. Full disclosure, I continue to use Robinhood despite this.

2 more replies

gammateam7y ago

And selling order flow

1 more reply

brian_herman7y ago

They probably use the algorithms implemented on their platform to make better ones.

shift8OP7y ago

services

j / k navigate · click thread line to collapse

36 comments

nodesocket7y ago

I've been playing with the Alpaca streaming API's in Node to get quotes. I have it working, the next step is figure out a trading algorithm.

97122637y ago

anonu7y ago

I used to work next to the stock loan desk at a bank. The equity markets are generally pretty tech driven these days but stock loan is still operating in a 1980s mentality.

ta12345678907y ago

Open question: If, for one stock, you could predict tomorrow's closing price today (with 80% accuracy within 2% of the actual price), how would you trade that stock?

kgwgk7y ago

It's easy to predict tomorrow's closing price with that accuracy: it will be the same as today's closing price.

For a large majority of S&P 500 stocks this prediction will be within 2% of the actual price very often (more than 80% of the days). In aggregate, the hit rate is over 80% as well.

ta12345678907y ago

Great, so how do you use that for a trading strategy?

2 more replies

hueving7y ago

How far will it move if it doesn't land within the "80% accuracy"?

18nleung7y ago

Try an iron condor - you’ll profit if the price of the underlying asset stays between two points

1 more reply

pmalynin7y ago

Buy call / puts (depending on the current price) near the target price, with very close expiry dates. This would maximize your convexity.

thisisit7y ago

The bigger question is - what happens if you get the price 20% wrong? This might look like a winning strategy in a normal and calm market. But, it'll take only one day to wipe out all the gains.

ta12345678907y ago

That's an excellent question. It all depends on the strategy. How would you address that scenario?

hartator7y ago

More than 80% of stocks will close within 2% of previous day closing price.

rpedela7y ago

Alpaca looks awesome, but doesn't support after hours trading. Does anyone know of a good API that does?

malhotra_chetan7y ago

Yes. Narwhal. Narwhal provides commission free flat rate brokerage trading via tradier and you can trade both in pre and post market hours.

1 more reply

hellofunk7y ago

How is the access to historical data with these services?

kaycebasques7y ago

A commission-free trading API? How does Alpaca make money?

gschier7y ago

Likely the same as similar services like RobinHood. A quick Google suggests they make most of their money on interest from cash sitting around in user's accounts that has not been invested yet.

JonasJSchreiber7y ago

2 more replies

gammateam7y ago

And selling order flow

1 more reply

brian_herman7y ago

They probably use the algorithms implemented on their platform to make better ones.

shift8OP7y ago

services

j / k navigate · click thread line to collapse