Broker Trading Platforms and APIs
This article introduces commonly used broker platforms and API interfaces in quantitative trading, including institutional-grade Prime Brokers and retail-grade trading APIs.
1. Prime Brokers
Which Broker Platforms Do Top Funds Use?
Top quantitative hedge funds like Renaissance do not use retail broker platforms (like IBKR retail or Futu). Instead, they execute trades through Prime Brokers.
Common Prime Brokers include:
- Goldman Sachs
- Morgan Stanley
- JPMorgan Chase
- IBKR Prime Services (more common for small to medium-sized funds; note: this is IBKR's institutional service, different from retail TWS)
These prime brokers provide financing, securities lending, clearing, reporting, and other services, and support low-latency execution for high-frequency/algorithmic trading. Renaissance likely uses multiple prime brokers to diversify risk and customizes connections (co-location, low-latency lines) to exchanges.
2. Retail-Grade Quantitative APIs
Does Futu NiuNiu Have This Kind of API Support?
Yes, Futu NiuNiu provides a powerful OpenAPI that supports programmatic trading and automated order placement.
Futu OpenAPI is designed for quantitative investment, including:
- Market data interface (real-time quotes, K-lines, tick data, etc.)
- Trading interface (place orders, cancel orders, modify orders, query orders/positions, etc.)
Supported markets: Hong Kong stocks, US stocks, A-share Connect, futures, options, etc.
Supported languages: Python, Java, C#, C++, JavaScript, etc. (official SDKs available).
Architecture: Requires running a local/cloud gateway program Futu OpenD, then connecting via API. Supports live trading and paper trading.
Many individual quants and developers use it to build algorithmic trading systems (such as dual moving average strategies, high-frequency frameworks). The community has many open-source projects (like the futu-api Python package, futu_algo framework).
Limitations: Suitable for retail/individual quantitative trading, not suitable for institutional-level ultra-high-frequency (higher latency, no co-location), but very friendly for medium-low frequency strategies and free/low-cost.
3. API Latency Analysis
Prime Broker (e.g., IB) API Latency Analysis
Yes, Interactive Brokers (IBKR) provides multiple API interfaces:
- TWS API: Connects via TWS or IB Gateway, supports Python/Java/C++, etc.
- Client Portal API: RESTful HTTP interface, requires OAuth authentication
- FIX CTCI: Institutional-grade FIX protocol interface (separate from TWS, requires separate application)
Note: These three are separate interfaces—TWS API itself does not use FIX protocol.
Is there higher latency?: Yes, especially for retail traders. IB API has higher latency (relative to institutional-grade). Retail round-trip latency (from signal to execution) is typically 50-100ms (milliseconds), depending on network, location, and optimization.
- Retail vs. Institutional Comparison:
- Retail traders: Higher latency (~70ms+) due to routing multiple hops, no co-location (servers near exchanges). Suitable for medium-low frequency strategies (e.g., day trading), not suitable for HFT (high-frequency, requires <1ms). Can use VPS (like QuantVPS) to optimize to <1ms to IB, but still ~3-5ms to exchanges.
- Institutional Prime Broker: Like Goldman Sachs/JPMorgan, provides low latency (<1ms) for large funds through dedicated lines, co-location, and custom optimization. IB also provides similar for institutional clients, but retail version has limitations.
Summary: IB API is sufficient for your simulations (non-HFT), but if pursuing Medallion-style short-term signals, latency is a bottleneck. Recommend starting with low-frequency strategies or using professional VPS to reduce latency.