Broker Speedtest by AlgoTest: Compare Broker API Speed in India
Broker Speedtest is an aid for algo traders to assess and compare broker API responsiveness. It’s been designed and engineered at AlgoTest to offer transparent data on the API performance of different brokers.
This tool is relevant for algo traders, traders who plan to move into algo trading, and even traders trading manually using third-party apps built on top of broker APIs We hope that with this tool we can help traders understand the nuances involved in firing trades from AlgoTest to different brokers’ APIs.
What is Broker Speedtest?
Broker Speedtest is a tool for algo traders to measure and compare broker API speed. It was built at AlgoTest to give you transparent data on how different brokers' APIs actually perform, instead of relying on word of mouth.
This tool is useful for algo traders, traders planning to move into algo trading, and even traders who place orders manually through third-party apps built on top of broker APIs.
If you're still figuring out which brokers even support algo-friendly APIs, our guide to trading API brokers in India covers the full list. We hope this tool helps you understand the nuances of firing trades from AlgoTest to different brokers' APIs.
Why Did We Make 'Broker Speedtest'?
At AlgoTest, we believe in transparency with our customers. Broker Speedtest was built with that intention, though there's more to the story.
There are a lot of misconceptions about broker API speed out there. Raghav, our founder, tweeted out a detailed breakdown comparing broker API speeds using real order data, aiming to bring some clarity to a debate that gets a lot of noise on trading X.
That tweet sparked plenty of discussion among traders about which broker is really the fastest. It's the same debate Broker Speedtest is built to settle, not with a one-off snapshot, but with live, continuously updated data.
But here are a couple of misconceptions we really want to address:
Speed is paramount when it comes to API trading for retail traders.
The fastest broker is always the best broker.
Check out AlgoTest’s Strategy Builder
Let’s understand how orders from AlgoTest work
In order to address these misconceptions, let’s first understand how AlgoTest fires orders to brokers and what we measure and present.
Step 1:
AlgoTest servers fire an order to the broker’s servers based on the strategy parameters.
The Broker sends us an acknowledgment of the order.
Step 2:
The Broker’s RMS approves the order and only then is it forwarded to the exchange.
Step 3:
The Exchange acknowledges that order, generates an Order ID and then provides that Order ID to the broker.
We only measure Step 1 of the process.
We only have data for when we fire an order(s) and when we receive the acknowledgment from the broker.
We cannot track the other steps because those are performed inside the broker’s internal infrastructure. We encourage the brokers to release metrics that’d help “Api wale retail traders” to make informed decisions.
Related: Best Brokers in India for algo trading, speed and API
But how do we interpret this data?
Here’s an example of Zerodha latencies for last week. These latencies are represented as a box plot to give a more accurate picture of how communication over the network should be measured.
Here are Zerodha and Finvasia latencies on the same chart to compare their responsiveness for placing new orders (Place Order requests).
Now it might seem that Finvasia is faster than Zerodha overall. However, let’s examine the 15 mins just after market open and 15 mins just before market close – the peak traffic hours where the highest volume of trading happens
Next, let’s zoom in and see data for a specific time – specifically this particular period.
We find here that on average, Zerodha might be slower in acknowledgment but Finvasia’s max time is higher than Zerodha’s. Overall, variance in Finvasia’s response time is higher during this time. BUT, again, this data doesn’t reflect what happens to your order after the broker has acknowledged your request, which is much more important!
How much time did the RMS check take?When does the broker forward it to the exchange? When does it actually reach the exchange’s firewall?
We have no idea here.
Does that make Zerodha better than Finvasia?
Not necessarily. We would need to study a lot more data in order to come to that conclusion but also this is not a decision that can be made without factoring in other factors like broker service, customer care, etc.
Holistic Evaluation:
While speed is important, it is not the only factor to consider when choosing a broker. Quality of service and reliability are crucial aspects that should not be overlooked. A broker’s ability to provide consistent and reliable service is paramount for successful algo-trading.
So if speed doesn’t matter, what affects your strategy?
The main effect driving your PnL will affect your strategy. Loosely speaking, if implied vol is higher than realised volatility over the lifetime of the option, your short option strategy will make money in the long run.
In this case, IV is a much slower moving parameter, not usually affected by a few seconds here and there. On the other hand, if you’re trying to capture intraday momentum, a few seconds could make all the difference. Bottom line, your entry and exit times don’t matter as much for option selling as they do for a momentum strategy.
In fact, even for a short term momentum strategy which is more price sensitive, this latency won’t matter if the strategy is setup the right way.
Which is why we have features like the SLL order which allow for trades to sit at the exchange waiting for the right entry/exit conditions to trigger.
Check out the product documentation to understand key AlgoTest features
Instead of focusing on speed, focus on understanding how best to set up your strategies to take advantage of the factors that actually drive your PnL in the market.
How You Can Use Our Broker Speedtest
We track a number of data points related to API performance. Here's how you can make the most of it:
Response Times: Broker Speedtest gives you detailed broker response times for Place Order, Modify Order, and Cancel Order requests.
Comparative Analysis: Run a side-by-side comparison between any brokers you're considering to see how each stacks up on API performance.
Live Updates: Data refreshes every 15 minutes during market hours, so you can track your broker's API speed in near real time and catch it early if their infrastructure slows down.
Beyond just watching speed data, AlgoTest also gives you broker-level risk controls like Lock and Trail stop loss, so your exits don't depend on manual reaction time or your broker's API speed.
To see the latest numbers for yourself, head over to Broker Speedtest above.
To know more about this, head over to openbroker.in.
Should You Switch to a Broker Based on Speed?
No, But Consider Trying New Brokers
While speed is an important factor, it shouldn't be the sole reason to switch brokers. If you're curious about a new broker, go ahead and try it, just make sure you evaluate it on other parameters too, including the range of trading APIs available in India and how well it fits your strategy.
Focus on Service Quality and Reliability
When choosing a broker, focus on the quality of service and reliability. A good broker should give you a seamless trading experience with minimal issues and should meet your trading needs comprehensively, well beyond just fast API speeds.
We're operating in the world of milliseconds here. The exchange might be executing tens of thousands of trades every second for a single option contract. Retail traders always operate at a latency; by the time you get the information to make a trade, the market has usually already moved.
The HFTs constantly competing for that edge operate in nanoseconds because they're providing liquidity. As a retail trader, you're taking liquidity, not providing it, so a few milliseconds or even seconds here and there shouldn't affect your PnL in the long run.
While it's important to get in the queue as fast as possible, you should first make sure you're actually getting in the queue, and reliably. Only then should you worry about whether your position in the queue is 10th or 50th.
Broker Speedtest Is Built for Algo Traders
Broker Speedtest by AlgoTest is a valuable tool for any algo trader looking to make an informed decision about broker selection. By giving you transparent, detailed data on broker API performance, we hope to help you choose the right broker for your strategy.
Remember, while speed is important, the overall quality and reliability of your broker will do more for your trading outcomes in the long run. And if you want to look beyond speed and compare brokers on charges and API features, our Broker Comparison tool is a good place to start, alongside our guide to the best brokers for algo trading in India.
We're trying to help you make an informed decision. Stay tuned for more updates!