An application programming interface, or API, is a set of programming code that queries data, parses responses, and sends instructions between one software platform and another. APIs are used extensively in providing data services across a range of fields and contexts.
APIs, have become increasingly popular with the rise of automated trading systems. Many retail brokers now provide APIs that enable traders to directly connect their screening software with the brokerage account to share real-time prices and place orders.
KEY TAKEAWAYS
- An application programming interface (API) establishes an online connection between a data provider and an end-user.
- For financial markets APIs interface trading algorithms or models and an exchange's and/or broker's platform.
- An API is essential to implementing an automated trading strategy.
- More brokers are making their platforms available through an API.
By GORDON SCOTT
