Query on future of APIs for traders

[NewUser123]

I am a discretionary trader, who uses Zerodha API to build my own front end to makes it easier and safer to place my orders.

Would I be classified as an algo trader, just because I use the API?

[SpacemanSpiff]

@NewUser123

Most of your existing ISP’s will give you a static IP, for an extra payment. You can even convert your residential plan to an office or business plan that comes bundled with static IP. Just checked Airtel and Jio.

@NewUser123

Right now, if your internet goes down, you can connect via your phone thru mobile internet. However, this will give you a different IP. So, in this proposal by SEBI, your internet backup plan fails. I don’t know if a trade which was initiated by an algo can be closed by calling Zerodha in this case.

yeah, i use Airtel fiber which should have this option from what i am reading and i use jio mobile as backup which probably wont.

Backup is mandatory, so i will have to add jio fiber or something else ( assuming they allow multiple static ips).
But this will mean that i will be able to trade from only my home. That’s what i mostly do, but i dont want to be bound by it.

Another way is to run everything on aws instead and configure it to use static ip. That will have best reliability too and hopefully lowest latency. I know nothing about it so haven’t bothered and there is something about having a physical kill switch nearby. But lets see, ill probably switch to aws if this happens.

@NewUser123

IDK WTF SEBI is thinking about, wanting static IP’s. Next they will want a live video feed to run via facial recognition to ensure it’s really, really you… Isn’t 2FA enough to establish the owner of the account?

Algo sellers bring some sort of risk, more than fraud itself. I dunno, they dont seem to punish the ones that break rules. From what i understand no action was taken against Tradetron, they only ask brokers why they work with tradetron.

Anyway, vs the alternatives given so far, this is the most sensible rule for us with least issues. Only need static ip. Hopefully it will stay that way without additional rules.

[NewUser123]

See, I don’t disagree with you about the cloud. But if that fails, what’s the backup?

Microsoft And AWS Outages: A Wake-Up Call For Cloud Dependency

[Matti]

@NewUser123

Would I be classified as an algo trader, just because I use the API?

No. Because you’re governed by the rate limits on Kite.

[SpacemanSpiff]

@NewUser123

See, I don’t disagree with you about the cloud. But if that fails, what’s the backup?

Was thinking about this. One possible fix - have static ip in your own house too and register it along with aws one. Broker will hopefully allow multiple static ips.

if aws is down, run from your current home setup. Both will have to be maintained with uptodate data. This will likely be very rare though.

ofc we can never do 100% uptime.

[NewUser123]

True, but will SEBI allow multiple static IP’s? That’s the key question.

I hope they do. Anyway, will see what happens next.

[NewUser123]

Which are currently 10 orders per second, if I remember correctly from the API documentation, right?

Not that I need that many.

[Matti]

@NewUser123

Which are currently 10 orders per second, if I remember correctly from the API documentation, right?

Correct. The actual threshold for what qualifies as algo is yet to be determined, but it will be around what most brokers would have set as max.

[user78]

Referring to this point from draft:
" Brokers shall not permit open APIs and allow access only through unique vendor client specific API key and static IP"

For custom personalized algo users who are using kite APIs today, can someone please clarify:

1. What is vendor client API key? Do they expect that each API user is also associated with algo vendor and only such users having ‘vendor client API key’ can use APIs? Or will it be the same API access key that is issued for Kite APIs today (which doesn’t have any vendor associated with it as of now)?
2. Brokers shall not permit open APIs - are kite APIs not considered as open APIs? If they are, and if broker is not allowed to offer such API - what is the point of checking for rate limit - when I won’t be offered such APIs in first place. Sorry, but this part seems unclear to me.

[Matti]

And static IP here implies there are 2 different modalities:

• One is vendor API keys that brokers may offer to third-party service providers after due diligence. Status
• Static IP is the second mode where users can get an API key accessible from a whitelisted static IP.

As for your point of whether or not Kite APIs are “open”, this circular intends to say that brokers can’t offer APIs without whitelisting IPs.

[user78]

Thanks for clarifying.
So for kite API users, it will mostly mean:
a. getting static IP(s) and registering it with the broker.
b. if the requests are within rate limit, it will not be treated as algo that requires registration.
Will wait for finer details.

[alwaysshri]

Wo Zerodha reassess API pricing after this is finalized?

[SITESCAPE]

Retail investors can now automate trades using broker APIs without registering their strategies, as long as their static IP address is whitelisted by the broker. These APIs follow the same risk management rules and rate limits as broker’s trading platforms, ensuring that a large number of orders won’t compromise market integrity. One of the biggest hurdles in the past was the need to register every strategy and change in strategy to be able to automate trades. With this gone, automated trading becomes more accessible to the public. SEBI has something to say about algo trading

[KD61]

I am concerned about the “rate limit threshold”. It might be too less, and even individual traders like me, who use API only for personal trading, need to be registered, which is very complicated and limiting.

I have a high trading capital, so I need to place 100-200 orders per second sometimes to deploy my capital fully.

For example, If I want to invest 10 crore in IDEA stock. With a limit of 1 lakh quantity per order. I need to place 125 or more orders to buy IDEA worth 10 crore in a second.

@nithin

[siva]

@KD61

It might be too less, and even individual traders like me, who use API only for personal trading, need to be registered, which is very complicated and limiting.

No need to register in your case.

@KD61

I am concerned about the “rate limit threshold”

Let them come out with rate limit number and only later we can debate.

[KamalChhirang]

@siva

No need to register in your case.

I place 200+ orders per second sometimes.

Let them come out with rate limit number and only later we can debate.

Then the damage is already done. We have to strongly suggest SEBI to increase rate limit threshold to 500-1000+ orders per second for HNI clients or for everyone. @siva

If it cannot be increased for everyone, it can be linked to “trading amount”. For example, people with higher capital, get higher rate limit. Or just keep it simple, and increase it without restrictions. I am placing orders for myself, let me place as many orders as I want.

[siva]

@KamalChhirang

I place 200+ orders per second sometimes.

We have 200 orders per minute limit even now.

@KamalChhirang

We have to strongly suggest SEBI to increase rate limit threshold to 500-1000+ orders per second for HNI clients or for everyone.

For most users this is not required, but for them who want these limits they can register and do.

[tradewealth]

Hi @Matti . Sebi has just released updated circulars regarding api access for retail investors.

I have two queries

1)As internet connections at our home/cloud usually has a dynamic ip address. How do you suggest bypassing it other than buying services from vendors providing static ip
2) Can you provide a method where whitelisted ip address stored by users at your end can be dynamically changed using scripts depending on when scripts are run hence avoiding the issue .

[SpacemanSpiff]

Seems they have still not decided on the order per second limit before orders are tagged as algo trades.

10-20+ would be ideal as usually we send orders in bursts ( esp around open and square off time )

@tradewealth

1)As internet connections at our home/cloud usually has a dynamic ip address. How do you suggest bypassing it other than buying services from vendors providing static ip

I have to start working on this, but i think AWS provides static ip ( maybe through ‘Elastic IP addresses’ - Haven’t tested )

[Matti]

@tradewealth

As internet connections at our home/cloud usually has a dynamic ip address. How do you suggest bypassing it other than buying services from vendors providing static ip

No real way around purchasing a static IP, either from your ISP or a cloud installation.

@tradewealth

Can you provide a method where whitelisted ip address stored by users at your end can be dynamically changed using scripts depending on when scripts are run hence avoiding the issue .

No, that wouldn’t be a feature we’d offer, at least not immediately in August.