With markets around opening and closing around the clock, traders must get to their desired targets without delays of any sorts, including technical ones. Like everything that places such demands on time and accuracy, trading has also gone digital.
Algorithmic trading software has taken over the scene and continues its dominance. It can be the one owned by the broker or the trader, but it serves the same purpose in either case.
Pricing the Stock Picker
Developers are making it available with different features and varied business models. This plays a massive role in determining its price. Your specific needs will determine what features your algorithmic trading software will have, and the price will be based on that.
Self-Built
If you intend to build your trading software, you can be assured that it will suit your needs exactly. However, as with everything custom-made, it will not come cheap.
Building trading software from scratch or even from templates that are openly available will cost a lot. The labor charges will form a major chunk of that cost. It will also take time to build, test, and implement, which means you likely won’t be making profits till it goes online.
Vendor’s Reputation
Your software developer/vendor has their business that thrives on reputation, much like any other and with reputation comes increased pricing of their products in all likelihood.
Compared to the competition, this increased price is due to better-skilled labor, better equipment, and better overall quality, betterment in all phases assured due to their years of experience.
While they can deliver quality assurance, looking around for a less well-known provider who can deliver similar value will help keep costs in the budget.
Addition of Programmability
You can have your trading software ready to go with built-in strategies or have it be programmable. The latter is always preferable since this customizability in strategy is the key to get the right trade executed.
Most platforms allow programming in common languages like C# and python. They also come with a backtesting feature to properly assess the capability of the strategy.
If you depend on the vendor to provide the program to implement the strategy, it will drive up the cost. On the other hand, you will need a team of programmers to implement your algorithms. Hence, it’s a trade-off you need to decide on.
Added Features
Trading involves a lot of supplementary activities coming together to make it a success. And the trading software can be made to do those tasks as well with add-on features.
Analytics is an absolute must, as every strategy is decided based on the past performance of various things about a company. You can have that built-in or as an add-on. Multimarket connectivity is another feature to have a wider reach.
The ability to directly connect to the exchange gives any platform an edge in latency to place trades. Or, it could be made to interact with the broker’s software as well. Thus, multi-platform integration can benefit you immensely as a feature.
Robust security and privacy also help to beat the competition while keeping data safe. It must always be updated to protect against ever-increasing numbers and severity of threats. This is a must-have feature.
Every such feature added drives up the price of the software you will ultimately get.
Sale/Service Model
Software-as-a-Service (SaaS) is becoming the norm, where you pay a regular subscription fee to the vendor to use their trading software. It brings down the initial cost and distributes it over time, making the software an easy-to-reach proposition.
Otherwise, they are sold in packages with varying features on a one-time payment basis. Basic packages will contain only the minimum feature set, while all-in-one types will give you everything you want and possibly more. It increases the cost upfront but won’t trouble you for regular payments.
Getting the right algorithmic trading software means getting the trade successful trade. It’s even sweeter when the software’s price makes it a great trade.
