If you have come up with trading strategies that work better when automated (or through an algorithm), you may be wondering if trading APIs exist for Wealthsimple Trade.
Using an API through a self-directed brokerage to electronically submit trades is no longer permitted by IIROC for the trading of Canadian securities on a Canadian exchange.
The terms of service for Wealthsimple Trade explicitly prohibit using an API to trade, and doing so will lead to your account being terminated. Currently, Canadians are limited to using trading APIs with Interactive Brokers only for non-Canadian securities.
I will discuss below in more detail if a Wealthsimple API exists and go over some additional things to keep in mind if you are looking to automate your trading with an API.
What is an API?
API stands for Application Programming Interface, which essentially refers to a program that allows two software applications to communicate with each other (or work together).
In a lot of cases, investors wish to use a trading API that connects a discount brokerage’s trade function with some outside source of data. An example would be an API that executes trades through a brokerage (like Interactive Brokers) based on outside information from an external website.
Are Trading APIs Legal in Canada?
All firms that advise or trade in securities within Canada have to be registered members with IIROC and follow IIROC rules. This includes all discount brokerages in Canada.
IIROC currently has a rule in effect that prohibits Canadian brokerages from allowing clients to use automated trade order systems to place orders for Canadian securities on Canadian exchanges. The details are outlined in the IIROC dealer member rule 3200.
Trading APIs that trade non-Canadian securities on non-Canadian exchanges (i.e. US stocks) are still currently supported through Interactive Brokers.
Using an API with Wealthsimple
Wealthsimple Trade has controls in place that allow the brokerage to detect if you are submitting orders outside of the official Wealthsimple mobile and web applications. Any clients that are flagged for using a trading API currently receive a written warning, asking them to stop or their accounts will be terminated.
Using an API with Wealthsimple Trade for reasons other than trading is currently a gray area.
If you are looking to open an account with Wealthsimple Trade, make sure to take advantage of a $25 signup Bonus.
Trading API and Interactive Brokers
Attempting to use a trading API with Interactive Brokers for Canadian securities on a Canadian exchange has the same restrictions. Interactive Brokers no longer supports personal trading applications or the electronic submission of orders for securities on a Canadian exchange (or Canadian ECNs) as of July 12, 2019.
Currently, Interactive Brokers does support the use of APIs when trading non-Canadian securities on non-Canadian exchanges. Make sure to do additional research before deciding to do so.
Opening an Interactive Brokers account is fairly straightforward to do online.
Wealthsimple API and Github Integration
GitHub, a platform that has reshaped collaborative coding, could be an intriguing intersection for Wealthsimple’s potential API endeavors.
- Version Control for Trading Algorithms: GitHub’s primary strength lies in version control, enabling users to track changes and revert to previous states. Traders and developers could use this to maintain their trading algorithms, making iterative improvements without the fear of irreversible errors.
- Collaborative Development: By integrating with GitHub, Wealthsimple might allow for a shared space where traders can collaboratively improve on trading strategies. While sensitive data should remain private, general strategies could be honed with community input.
- Public and Private Repositories: Developers could choose between making their trading algorithms public, for everyone to see and contribute, or private, for personal use or a selected group. Such flexibility would foster both community collaboration and individual innovation.
- Continuous Integration and Testing: By leveraging GitHub’s tools, users could constantly test their trading algorithms against mock data. This would ensure that the strategies remain effective and are free from bugs.
If regulations and company policies shift in the future, Wealthsimple’s potential foray into API trading, coupled with platforms like GitHub, could herald many applications for retail algorithmic trading.
What is the Best Trading Platform in Canada?
If you are looking to trade or invest through a discount brokerage, it is important to have a good understanding of your options and to understand the differences between the major options.
I offer a thorough review of the best trading platforms in Canada, outlining some of the key differences in fees, commissions, and what each platform specifically excels at.
If you are looking to use a trading API for automated trading, you will be unable to do so with Canadian securities that are trading on Canadian exchanges. This is because of rules outlined by IIROC, which all Canadian brokerages must adhere to.
Using a trading API for non-Canadian securities (such as US stocks) is currently still possible through Interactive Brokers.
If you are looking for Canadian stock ideas for investing (or trading), make sure to take a look at my recent outline of the best stocks in Canada.