How Much Does it Cost to Develop a Trading App?
Developing a stock or a securities trading app has been a rising trend among many finance start-ups and consumer and investment banks.
With everybody wanting to implement a new and unique business model or to get a share of the business that mobile trading apps bring to the stock markets, development has become more complex and costly.
Here’s an analysis of the development of trading apps and how much they cost.
What is a Trading Application?
A trading app or a stock brokerage app is a digital platform that enables the user to trade assets like stocks, securities, currencies, ETFs, and many more in the financial markets through their mobile phones and personal computers, however, there is much more to it.
A trading app has much more functionality for a fully immersed trading experience, it shows real-time information from the stock markets to the users in the form of a user-friendly stock ticker, manages portfolios, and allows for automated trades like a stop/loss system.
In short, it is an application that virtually brings the entire stock market to your phone.
Popularity of Trading Apps?
The financial markets have changed in recent years due to the surge in the use of trading apps.
A major change occurred with the introduction of mobile technology.
In the early 2010s, the first trading applications were launched, providing users with never-before-seen access to stock markets from their smartphones.
Among these innovative apps, Robinhood became well-known quickly, upending the market with its commission-free trading model and intuitive design.
According to recent market data, Robinhood has a sizable user base of around 16 million, according to estimates that show how popular trading applications are with investors of all stripes.
The current digital era's growing need for easily accessible and easy investment platforms is highlighted by this exponential increase.
Factors Implicating Development Costs
Platform Selection
- Developing for multiple platforms (iOS, Android) increases development time and costs compared to focusing on a single platform.
- And with the platform, comes the requirement of choosing a development framework like React Native or Flutter, you check out the costs of developing a Flutter app to know what to choose.
Features and Functionality
- The complexity and number of features directly impact development costs.
- Implementing advanced features such as real-time market data, complex charting tools, and social networking functionalities requires more time and resources, leading to higher development costs.
User Interface (UI) and User Experience (UX)
- Investing in high-quality UI/UX design enhances user satisfaction but adds to development costs.
- Designing intuitive interfaces, conducting user research, and iterating on design prototypes involve additional expenses.
Security Measures
- Implementing robust security measures is essential but adds to development costs.
- Security features such as encryption, authentication mechanisms, and compliance with regulatory standards require specialized expertise and resources.
Regulatory Compliance
- Ensuring compliance with financial regulations and data protection laws increases development complexity and costs.
- Developers need to invest in understanding and implementing regulatory requirements, conducting audits, and obtaining necessary licenses or certifications.
Integration with External APIs
- Integrating with third-party APIs for market data, trading execution, and payment processing involves additional development effort and costs.
- Developers may need to pay licensing fees, and API usage charges, or invest in custom integration solutions. Check out our API development services to learn more about how API integration in app development works.
Scalability and Performance
- Building a scalable and high-performance trading app requires investment in infrastructure, backend systems, and optimization techniques.
- Ensuring the app can handle high traffic volumes, process transactions quickly, and scale seamlessly as user demand grows involves additional development costs.
Testing and Quality Assurance
- Investing in thorough testing and quality assurance processes is crucial but adds to development costs.
- Testing across multiple devices, platforms, and environments, as well as conducting security audits and performance testing, requires dedicated resources and time. Check out our load-testing servicesl to learn more about how software testing can transform apps.
Time Taken for Development
The cost it takes to develop your trading app is directly proportional to the time it takes and the rate of your developer, i.e. total cost = time taken (in hours) x hourly rate of your developers’ salaries.
This is why it is important to know and plan a timeline for your app’s development cycle.
Basic Trading App:
Estimated Development Time: 3 to 6 months
Total Hours: Approximately 480 to 960 hours
Intermediate Trading App:
Estimated Development Time: 6 to 12 months
Total Hours: Approximately 960 to 1920 hours
Advanced Trading App:
Estimated Development Time: 12 to 16 months or more
Total Hours: Approximately 1920 hours or more
Types of Trading Apps and Their Costs
Brokerage Apps
Cost estimate: $50,000 to $500,000
- These apps are offered by traditional brokerage firms and allow users to trade a wide range of financial instruments, including stocks, options, ETFs, and mutual funds.
- They provide access to market data, research tools, and account management features. Examples include Robinhood, TD Ameritrade's thinkorswim, E*TRADE's mobile app, and Charles Schwab's StreetSmart Mobile.
Basic brokerage apps with essential features can cost between $50,000 to $200,000.
More advanced apps with additional features like real-time market data, advanced charting, and payment integration may range from $200,000 to $500,000 or more.
Robo-Advisors
Cost estimate: $50,000 to $200,000
- Robo-advisor apps automate the investment process using algorithms and software to create and manage investment portfolios based on user preferences and risk tolerance.
- They typically offer diversified portfolios of ETFs and use rebalancing techniques to maintain portfolio allocations. Popular robo-advisor apps include Betterment, Wealthfront, and SoFi Invest.
Developing a robo-advisor app typically costs between $50,000 to $200,000, considering the complexity of implementing automation, investment algorithms, and portfolio management features.
Cryptocurrency Exchanges
Cost estimate: $100,000 to $1,000,000
- These apps facilitate the buying, selling, and trading of cryptocurrencies such as Bitcoin, Ethereum, and Litecoin.
- They provide users with access to a wide range of digital assets and trading pairs, as well as features like real-time market data, price charts, and wallet management.
Examples include Coinbase, Binance, and Kraken.
Building a cryptocurrency exchange app is more complex and may cost anywhere from $100,000 to $1,000,000 or more.
Costs can vary significantly based on factors such as security requirements, trading functionalities, regulatory compliance, and the number of supported cryptocurrencies.
Social Trading Platforms
Cost estimate: $50,000 to $300,000
- Social trading apps allow users to connect with other investors, share trading ideas, and even automatically copy the trades of successful traders.
- They combine elements of social networking with investment features, enabling users to learn from and collaborate with peers. Popular social trading platforms include eToro, ZuluTrade, and TradeUP.
The development cost for social trading platforms can range from $50,000 to $300,000 or more, depending on features such as social networking capabilities, copy trading functionality, and user engagement tools.
Fractional Share Investing Apps
Cost estimate: $50,000 to $200,000
- These apps enable users to invest in partial shares of stocks and ETFs, making it easier for individuals with limited capital to diversify their portfolios.
- Fractional share investing apps often offer low or no minimum investment requirements and may include features like automatic dividend reinvestment.
Examples include Robinhood, M1 Finance, and Public.
Developing fractional share investing apps may cost between $50,000 to $200,000, considering features like fractional share trading, portfolio management, and user-friendly interfaces.
Costs may vary based on additional features such as automatic dividend reinvestment and social sharing functionalities.
How Much Would it Cost to Develop a Trading App Like Robinhood?
- A trading app like Robinhood would require some of the basic features like functions to place buy and sell orders, and get real-time stock market data and prices, and company information.
- It would also have to feature more complex and advanced functionality like a commission-free trading system, fractional share investing, payment gateway integration, and security measures.
- To top it all off, it will have to have a state-of-the-art user interface and user experience (UIUX) design.
- These features already bump the cost to the higher circuits because such features would require multiple segmented development teams of multiple developers making your entire project have from 10 to 50 to over a hundred developers.
- These many developers would also incur overhead costs although this can entirely be handed to an outsourcing partner to handle.
- The last factor to consider is the costs incurred from third-party integrations like a stock ticker for real-time information or payment API integration for the payment gateway.
- These APIs tend to have either usage-based costs where you are only charged by how many times the API gets utilized or they require a monthly subscription or just a one-time payment.
- Another cost consideration is the infrastructure and software costs but that is something that can also be dodged through outsourcing the development.
- We can estimate that with all the employees or a development company hired and the cost implications of other third parties considered, building a trading app like Robinhood can cost you around $500,000 to $1,500,000 depending on the project complexity and whether you outsource it or develop it in-house.
Developer Salaries
- Salaries and rates of software developers vary according to their location but more importantly, the specific tech stack required, and the cost to develop an app in Python can be very different from an app developed in Node.js.
- The right language and framework to choose can be difficult and critical to the long-term maintenance and functioning of your trading app, check out our comparison of Node.js and Python to learn differences and which is better.
- Apart from just salaries, there are more costs associated with hiring employees such as benefits, perks, and insurance which you might be required by law to pay depending on the region.
Here are the average starting salaries of mobile app developers in some of the most popular countries for trading apps sourced from Indeed:
India: $5,000/year
United States: $120,000/year
United Kingdom: $51,000/year
Germany: $68,000/year
Australia: $96,000/year
Mobile App Development Firms
One way to avoid the hassle of creating a production plan, organizing developers and assigning them tasks, acquiring key infrastructure such as office space and computers, and many more tasks such as overheads and getting licensing for third-party integrations.
This can all be forwarded to a software development agency to whom you can outsource the entire development of your trading app as well as long-term maintenance and updates.
A popular strategy in this method is outsourcing software development to a firm in India to take advantage of specialized skills and low costs.
Here are the rates of some of the most prominent mobile app development firms, data sourced from Clutch:
Code B offers its services at $25 to $49 per hour
Algoworks charges their clients $25 to $49 an hour
Goji Labs is priced at $100 to $149 an hour
Mercury Development’s services cost $50 to $99 per hour
Emzin Tech charges less than $25 an hour
If you are interested in finding out about top companies that you can hire to develop your applications, check out:
Conclusion
In conclusion, the development of trading apps involves a thorough understanding of the several factors influencing cost such as design, feature complexity, and time.
With the rising trend of mobile trading apps, the complexity and costs associated with development have increased significantly as competitors keep pushing the limits with new features.
While basic trading apps may require 3 to 6 months and cost between $50,000 to $200,000 to develop, advanced apps like Robinhood can take 12 to 16 months or more, with costs ranging from $500,000 to $1,500,000 or more.
Factors such as platform selection, features, UI/UX design, security measures, and regulatory compliance contribute to development costs.
Moreover, considerations such as developer salaries, third-party integrations, and outsourcing options impact the overall investment required.
Whether developed in-house or outsourced to mobile app development firms, creating a trading app demands careful planning, strategic decision-making, and allocation of resources to deliver a high-quality product that meets user needs and industry standards.
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