Introduction
Fidelity Investments offers a range of tools and platforms to facilitate automated trading, catering to both novice and experienced investors. While Fidelity does not provide a full-fledged API for algorithmic trading, it offers various features that enable automation through its platforms and integrations.
Automated Trading Features at Fidelity
1. Recurring Investments
Fidelity allows investors to set up recurring investments in stocks, ETFs, mutual funds, and Fidelity Basket Portfolios. This feature enables automatic purchases at regular intervals, such as weekly, biweekly, or monthly, helping investors maintain a disciplined investment strategy.
- Setup Process:
- Log in to your Fidelity account.
- Navigate to the “Accounts & Trade” section.
- Select “Account Features” and click on “Manage” next to “Recurring Transfers.”
- Follow the prompts to set up your recurring investment plan.
This feature is particularly useful for dollar-cost averaging strategies and long-term portfolio building.
2. Fidelity Trader+
Fidelity Trader+ is an advanced trading platform designed for active traders. It offers real-time analytics, customizable charts, and the ability to execute trades across multiple devices. While it provides enhanced tools for active trading, it does not support full algorithmic trading or custom scripting.
3. Integration with Third-Party Tools
Fidelity has partnered with third-party platforms like SnapTrade and TradersPost to offer limited automation capabilities. These integrations allow users to automate trades based on predefined criteria, such as technical indicators or market conditions. However, the extent of automation is limited compared to platforms with full API access.
4. Wealth-Lab Pro (Discontinued)
Fidelity previously offered Wealth-Lab Pro, a platform for developing and testing algorithmic trading strategies. However, this service was discontinued in July 2020, and Fidelity no longer provides a dedicated platform for algorithmic trading.
Limitations of Automated Trading at Fidelity
- No Full API Access: Fidelity does not offer a public API for executing trades, limiting the ability to implement fully automated trading strategies.
- Limited Third-Party Integrations: While there are some integrations with third-party platforms, they offer limited automation capabilities compared to other brokers with comprehensive API support.
- No Custom Scripting: Fidelity’s platforms do not support custom scripting or algorithm development within their environment.
Conclusion
Fidelity provides several tools to facilitate automated trading, including recurring investments and integrations with third-party platforms. However, for investors seeking comprehensive algorithmic trading capabilities, Fidelity’s offerings may be limited. Brokers like Interactive Brokers or TD Ameritrade offer more robust API support and scripting capabilities for developing and executing custom trading strategies.