The Cost of Trading Platform Development in 2023: Factors, Features, Risks + Stats

The rise of the trading software market in recent years has been nothing short of staggering. With the proliferation of the Internet and the increasing popularity of online investing, more and more individuals and institutions are turning to online brokers to buy and sell financial instruments such as stocks, bonds, and currencies. As a result, the demand for trading platform development has surged, with a growing number of companies looking to create their own platforms or customize existing ones to meet the needs of their clients. According to the Fortune Business Insights report, the global online trading platform market was valued at $8.28 billion in 2020 and is expected to reach $12.16 billion in 2028 with a CAGR of 5.1%.

Source: Fortune Business Insights

However, developing a top-quality trading platform is a complex and costly endeavor, requiring a significant investment of time and resources. In this article, we will delve into the various factors that contribute to the cost of trading platform development, give you an approximate estimation of the cost of online trading platform development, and explore the ways in which companies can mitigate these costs while still delivering a top-quality product. Let’s get started. 

Why opt for custom online trading platform development? 

Custom online trading platforms offer a number of advantages over ready-made solutions. Here are some of the main benefits of custom trading platforms:

1. Customization: One of the main advantages of custom trading platforms is that they can be customized to meet the specific needs of a company or its clients. This allows companies to create a platform that is tailored to their business model, target audience, and unique requirements. In contrast, ready-made solutions are often one-size-fits-all and may not be able to fully meet the needs of a particular company.

2. Flexibility: Custom trading tools are also more flexible than ready-made solutions. Companies can add, remove, or modify features as needed to ensure that their platform stays up-to-date and meets the evolving needs of their clients. With ready-made solutions, companies are often limited in their ability to make changes to the platform.

3. Control: Custom trading solutions give companies more control over the design, functionality, and security of their platform. This can be especially important for companies that handle sensitive financial data or operate in regulated industries.

4. Branding: Custom trading platforms can be designed to reflect the branding and corporate identity of a company. This can help to differentiate the company from its competitors and create a more professional and cohesive user experience.

5. Integration: Custom trading systems can be easily integrated with other systems and technologies, such as CRM, stock trading platform, or accounting software. This can streamline business processes and improve efficiency.

Overall, custom trading platforms offer a number of advantages over ready-made solutions, including customization, flexibility, control, branding, and integration. While custom platforms may require a larger initial investment, they can offer a more tailored and scalable solution that meets the specific needs of a company.

The Cost of Trading Platform Development in 2024

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Online trading platform: Approximate features list

Here is a list of some of the common features that can be found on online trading platforms:

1. Trading functionality: The core function of an online trading platform is to enable investors to buy and sell financial instruments. This may include features such as real-time quotes, order entry and execution, and portfolio tracking.

2. Market data and research: Many online trading tools provide access to market data, such as prices and volume, as well as research and analysis to help investors make informed decisions. This may include financial news, company reports, and technical analysis tools.

3. Education and training: Some online trading systems offer educational resources and training materials to help investors learn about the market and improve their trading skills. This may include webinars, articles, and instructional videos.

4. Mobile access: Many online trading platforms offer mobile apps that allow investors to trade from their smartphones or tablets. This makes it easier for investors to stay connected and make trades on the go.

Source: FusionMarkets

5. Customization: Some online trading tools allow investors to customize their trading experience by setting preferences such as default order types, alerts, and watch lists.

6. Account management: Online trading platforms typically offer account management features such as account balances, transaction history, and account statements.

Source: FusionMarkets

7. Security: Online trading systems should have robust security measures in place to protect the personal and financial information of their users. This may include encryption, two-factor authentication, and data protection measures.

Overall, online trading platforms offer a range of features to facilitate trading and provide investors with the tools and information they need to make informed decisions. These features may vary depending on the specific platform, but may include trading functionality, market data and research, education and training, mobile access, customization, account management, and security measures. Next, we'll look at how to create a feature list that will help you build a trading platform that stands out from the rest.

Why starting with a discovery phase is the best idea ever

Starting an online trading platform development project with a discovery phase is a great idea for a number of reasons.

Reason #1:

First and foremost, a discovery phase helps to define the scope and goals of the project. This is especially important for online trading projects, which can be complex and involve multiple stakeholders with different requirements. By taking the time to thoroughly understand the business needs and objectives, the project team can ensure that the development effort is focused on the most important areas and delivers the greatest value.

Reason #2:

A discovery phase also helps to identify any potential challenges or risks that may arise during the development process. This can include technical challenges, regulatory issues, or other factors that may impact the project's success. By identifying these challenges early on, the project team can develop contingency plans and mitigate risks before they become major issues.

Reason #3:

Another benefit of starting with a discovery phase is that it helps to build consensus among stakeholders. By involving all relevant parties in the planning process, the project team can ensure that everyone is aligned on the project goals and understands their roles and responsibilities. This can help to minimize misunderstandings and conflicts later on in the project.

Reason #4:

Finally, a discovery phase can help to optimize the development process by identifying and prioritizing key features and functionality. This can help to ensure that the development effort is focused on the most important areas and delivers the greatest value to the business.

By taking the time to carefully plan and prepare for the project, businesses can increase their chances of success and deliver a high-quality product that meets the needs of their customers.

Choosing the right trading platform development company

Choosing the right software development vendor is crucial for the success of any software project. The right vendor can bring expertise, experience, and efficiency to the project, resulting in a high-quality product that meets the needs of the business and its users. On the other hand, a poor choice of vendor can lead to delays, budget overruns, and ultimately, a product that fails to deliver the desired results.

There are several factors to consider when choosing a software development vendor: 

Industry expertise

One of the most important is the vendor's level of expertise and experience in the specific domain or technology required for the project. It is essential to ensure that the vendor has a proven track record of delivering similar projects successfully.

Delivery approach

Another critical factor is the vendor's development methodology and project management approach. It is essential to choose a vendor that follows a structured and disciplined approach to software development, with clear processes in place for requirements gathering, design, development, testing, and deployment. This will ensure that the project stays on track and meets the agreed-upon timelines and budget.

Transparent communication

You also need to consider the vendor's communication and collaboration skills. The vendor should be able to communicate with the project team and stakeholders effectively and should be open to feedback and collaboration. This will help to ensure that the project stays aligned with the business needs and goals.

Budget and rates

Finally, it is‌ essential to consider the vendor's pricing and licensing model. While it is important to get the best value for money, it is also very important to ensure that the vendor provides the necessary support and maintenance services to ensure the long-term success of the product.

Guess what? We at Yellow meet all the criteria. We value transparent communication, always meet deadlines, and have 7+ years of experience in software development. You can check what our clients say about us on Clutch. 

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Team composition 

The team composition for online trading platform development will depend on the specific needs and goals of the project. However, there are a few key roles that are typically involved in the development of an online trading platform:

1. Project manager: The project manager is responsible for overseeing the development of the online trading platform and ensuring that it is delivered on time and within budget. They may also be responsible for coordinating the efforts of the various team members and managing stakeholder communications.

2. Frontend engineers: Mainly, they are responsible for building the HTML, CSS, and JavaScript code that make up the user interface of the platform, and implementing features such as charting tools and order forms that traders can use to place trades. 

3. Backend engineers: They play a crucial role in the development of an online trading platform. They build the server-side components of the platform, including APIs, databases, and server-side logic; integrate the platform with other systems, such as market data feeds and brokerage APIs; implement security measures to protect against cyber threats and ensure the confidentiality of user data; set up and maintain hosting environments for the platform.

4. Quality assurance (QA) engineers: QA testers are responsible for ensuring that the online trading platform is of high quality and free of defects. They may perform manual and automated testing to identify and fix issues before the platform is released to users.

5. Data scientists: Data scientists may be involved in the development of an online trading platform if it includes artificial intelligence (AI) or machine learning functionality. They are responsible for analyzing and processing data to train and improve the performance of the AI model.

6. User experience (UX) designers: UX designers are responsible for creating a user-friendly and intuitive interface for the online trading platform. 

7. Technical writers: Technical writers may be responsible for creating documentation and help materials for the online trading platform. This may include user manuals, online help resources, and release notes.

Design requirements: How an online trading platform must look and feel 

Design is an important factor in the development of an online trading platform, as it can have a significant impact on the user experience and overall success of the platform. When designing an online trading platform, there are a few key requirements that should be taken into consideration:

1. Functionality: The platform should be easy to use and navigate, with clear and intuitive controls and features that allow traders to place orders and access market data quickly and efficiently.

2. Usability: The platform should be user-friendly, with a clear and concise layout that makes it easy for traders to find the information they need. This includes things like the placement of buttons, menus, and other controls, as well as the use of clear and legible text and graphics.

3. Responsiveness: The platform should be responsive, meaning that it should work well on different devices and screen sizes, including smartphones, tablets, and desktop computers.

4. Customization: The platform should allow traders to customize certain aspects of the interface, such as the layout and color scheme, to suit their preferences.

5. Aesthetics: The platform should be visually appealing and use appropriate design elements, such as colors, fonts, and graphics, to create an overall cohesive and professional look.

All of these design requirements should be taken into account when developing an online trading platform (mobile or web-based trading platform), and they can have a significant impact on the overall cost of development. Working with experienced designers and developers who have expertise in creating user-friendly and visually appealing online trading platforms can help to ensure that the platform meets these requirements and delivers a positive user experience. Below, we’ll give you the estimate of the cost of each stage. All data about the average hourly wage is provided by Salary.com and Glassdoor. 

The design process for an online trading platform typically involves several stages, including:

1. Research and planning: This stage involves gathering information about the target audience and their needs, as well as researching the competitive landscape and identifying any unique features or functionality that the platform should offer. We’ll never get tired of emphasizing the importance of this stage as it sets the overall direction and goals for the design process.

This stage can take anywhere from a few days to several weeks, depending on the complexity of the project and the amount of research required.

2. Wireframing and prototyping: During this stage, designers create rough sketches or wireframes of the platform layout and functionality, which can be used to get a sense of how the platform will look and work. This is typically done using specialized software tools, such as Figma.

This stage can also take anywhere from a few days to several weeks, depending on the complexity of the project and the number of wireframes that need to be created. When we last developed a Forex trading platform, this stage took us approximately 150 hours, so we’ll use this number as a benchmark to compare the cost of wireframing and prototyping in different regions. 

3. Visual design: In this stage, the focus shifts to the visual appearance of the platform, including the layout, colors, fonts, and graphics. Designers may create multiple design concepts and iterate on them until they arrive at a final design that meets the goals and requirements of the project.

This stage usually takes about 30 hours to complete. 

Frontend requirements and features: Making the interaction flawless

Frontend features are the elements of the user interface (UI) and user experience (UX) of an online trading platform that users interact with and engage with directly. These features are designed to make the platform easy to use and navigate, and to provide users with the tools and functionality they need to trade effectively. The development of these features usually involves a combination of technologies and tools, such as HTML, CSS, JavaScript, React, Angular, and Vue.js.

Here are some examples of frontend features that you may want to consider when developing an online trading platform:

1. Dashboard: A dashboard is a central hub that provides users with an overview of their accounts, market data, and trading activity. This may include charts, graphs, and other visualization tools that help users understand and analyze market trends.

It usually takes about 60 hours to complete. 

2. Order entry forms: These are the forms that users use to place trades, including options for buy, sell, or short orders. These forms may also allow users to set stop-loss and take-profit orders, and to choose from different order types such as market, limit, and stop orders.

It usually takes about 20 hours to complete. 

3. Account management tools: These are the tools that users use to manage their accounts, including options for depositing and withdrawing funds, updating personal information, and reviewing account history and activity.

This feature takes about 40 hours to complete. 

4. Market data feeds: These are the real-time data feeds that provide users with information about market prices, volume, and other key metrics. These feeds may be displayed in the form of charts, tables, or other visualization tools.

It usually takes about 50 hours to complete.

5. Alerts and notifications: These are the alerts and notifications that users can set up to receive updates about market events, account activity, and other important information.

This usually takes about 20 hours to complete.

6. Mobile access: The cost of mobile access development depends on a range of factors such as design complexity, features and functionality, number of platforms, and developer rates. As a rough estimate, it can take up to 350 hours. 

Developing these frontend features can be a complex and time-consuming process, and the cost will depend on the specific requirements and features of the platform. Factors that can affect the cost include the complexity of the design and functionality, the use of custom graphics and visual elements, and the need for specialized technical expertise.

Backend requirements: It’s all about security and algorithms

Backend features are essential for the smooth operation of an online trading platform. They include algorithms that enable the platform to process and execute trades, as well as security measures to protect user information and financial transactions.

Algorithms play a crucial role in online trading platforms, as they allow the platform to quickly and accurately process and execute trades based on market conditions and user input. These algorithms can be complex and require significant development time to create and fine-tune.

Security is also a top priority for online trading platforms, as they handle sensitive financial information and transactions. This includes measures such as secure authentication, data encryption, and fraud detection. These features also require significant development time to implement and test.

Some common backend features for online trading platforms include:

1. Trade execution algorithms: These algorithms enable the platform to process and execute trades based on market conditions and user input. These algorithms can be complex and require significant development time to create and fine-tune.

There are several technologies and frameworks that are commonly used to develop trade execution algorithms:

• Programming languages: Trade execution algorithms are typically developed using programming languages such as C++, Java, or Python. These languages are chosen for their performance and capabilities in handling complex data analysis and decision-making tasks.

• Data management technologies: Trade execution algorithms require access to large amounts of data, including market data and user information. Technologies such as database systems and data processing frameworks are used to manage and analyze this data.

• Machine learning frameworks: Some trade execution algorithms use machine learning techniques to improve their performance over time. Popular machine learning frameworks such as TensorFlow or scikit-learn can be used to develop these algorithms.

• Application frameworks: Application frameworks such as Spring or Django can be used to build the overall architecture of the trade execution algorithm and provide useful tools for developing and deploying the system.

It may take around 150 hours to develop these algorithms. 

2. Security measures: Online trading platforms handle sensitive financial information and transactions, so security is a top priority. This includes measures such as secure authentication, data encryption, and fraud detection. These features require significant development time to implement and test.

It may take up to 100 hours to develop them. 

3. Notifications and alerts: These allow users to receive updates and alerts about important events or changes within the application.

There are several technologies that can be used to develop the backend for notifications and alerts:

• Server-side languages: Server-side languages such as Java, Python, or PHP are often used to build the backend of an application and handle tasks such as data management and integration with external services. These languages can be used to create the backend logic for generating and sending notifications and alerts.

• Data management technologies: Notifications and alerts often require access to data such as user preferences, event logs, and market data. Technologies such as database systems and data processing frameworks are used to manage and analyze this data.

• Notification delivery technologies: There are various technologies and platforms that can be used to deliver notifications and alerts to users. These include push notifications, SMS messaging, and email.

• Integration with external services: It may be necessary to integrate the notification and alert system with external services such as email servers or SMS gateways to deliver notifications to users.

It may take up to 40 hours to develop notifications and alerts.

4. Historical and real-time data: These features allow users to access data about past and current market conditions, as well as to track the performance of their investments.

There are several technologies and frameworks that are commonly used to develop historical and real-time data features for online trading platforms:

• Data visualization tools: To make the data accessible and easy to understand for users, it is often necessary to use data visualization tools such as charts, graphs, and tables. There are many libraries and frameworks available for creating data visualizations, including D3.js, Chart.js, and Highcharts.

• Real-time data technologies: Real-time data features require the ability to access and process data in near real-time. This can be achieved using technologies such as websockets, which allow for bidirectional communication between the server and client, or by using a streaming API provided by a third-party data provider.

• Integration with external data sources: Many online trading platforms rely on external data sources to provide historical and real-time data to users. Technologies such as APIs (Application Programming Interfaces) and ETL (Extract, Transform, Load) tools are used to integrate with these data sources.

However, the specific technologies and frameworks used to develop historical and real-time data features for an online trading platform will depend on the specific requirements of the platform and the preferences of the development team.

It may take up to 120 hours to develop this feature. 

5. Risk management tools: These tools can help users identify potential risks and make informed decisions about their trades.

There are several technologies and frameworks that are commonly used to develop risk management tools for online trading platforms:

• Data management technologies: Risk management tools often require access to large amounts of data, including market data, trade history, and user information. Technologies such as database systems and data processing frameworks are used to manage and analyze this data.

• Risk calculation algorithms: Risk management tools typically include algorithms that are used to calculate and analyze risk metrics such as volatility, Sharpe ratio, and value at risk (VaR). These algorithms can be complex and may require significant development time to create and fine-tune.

• Data visualization tools: To make the risk management tools accessible and easy to understand for users, it is often necessary to use data visualization tools such as charts, graphs, and tables. There are many libraries and frameworks available for creating data visualizations, including D3.js, Chart.js, and Highcharts.

• Integration with external data sources: Many online trading platforms rely on external data sources to provide market data and other information for risk management tools. Technologies such as APIs (Application Programming Interfaces) and ETL (Extract, Transform, Load) tools are used to integrate with these data sources.

It may take up to 100 hours for risk management tools development.

6. Graphics and charting tools: These tools can help users to make informed decisions about their trades.

There are several technologies and frameworks that are commonly used to develop graphics and charting tools for online trading platforms:

• Data management technologies: Graphics and charting tools often require access to large amounts of data, including market data, trade history, and user information. Technologies such as database systems and data processing frameworks are used to manage and analyze this data.

• Data visualization libraries and frameworks: There are many libraries and frameworks available for creating graphics and charts, including D3.js, Chart.js, and Highcharts. These tools allow developers to create interactive and visually appealing charts and graphs that can be embedded in web applications.

• Integration with external data sources: Many online trading platforms rely on external data sources to provide market data and other information for graphics and charting tools. Technologies such as APIs (Application Programming Interfaces) and ETL (Extract, Transform, Load) tools are used to integrate with these data sources.

• Web development frameworks: Online trading platforms are typically accessed through web browsers, so web development frameworks such as Angular, React, or Vue.js are often used to build the user interface and handle client-side tasks. These frameworks can be used to integrate ‌graphics and charting tools into the platform's user interface.

It may take up to 40 hours to develop them. 

Third-party integrations for online trading platform

Third-party integrations are an important aspect of online trading platform development, as they allow platforms to connect with other systems and services that are necessary for their operation. Some common examples of third-party integrations that may be needed to develop a trading platform include:

1. Payment gateways: These are used to process transactions and facilitate the transfer of funds between buyers and sellers. Some popular payment gateways include Stripe and PayPal. 

Setting up a Stripe account is free, it doesn’t charge a monthly or annual fee for its services and does not have any hidden fees. The company's pricing is based on a per-transaction model, and businesses are charged a percentage (2.9%) plus a flat fee (30 cents) for each online sale processed through Stripe. 

Source: Stripe

Setting up a PayPal account is free, and the company charges a percentage fee (ranging from 1.9% to 3.5%) and a fixed fee (ranging from 5 cents to 49 cents) for each transaction processed through the account.

Source: PayPal

2. Financial data feeds: Online trading platforms often require real-time data on financial instruments such as stocks, currencies, and commodities. This data is typically provided by third-party data providers, such as Bloomberg or Thomson Reuters. Prices for financial data feeds can vary widely, but can be several hundred dollars per month or more.

3. Trading APIs: Many online trading platforms allow users to trade directly from their platform using APIs (Application Programming Interfaces) that connect to external exchanges. Some examples include: 

• Market data APIs: These APIs provide real-time or historical data on financial instruments such as stocks, futures, and options. Alpha Vantage ($249.99/mo for 1200 APIs requests per minute) and Twelve Data ($999/mo for Enterprise plan) are examples of these APIs. 

• Risk management APIs: These APIs enable the platform to monitor and manage risk, including checking for margin violations and implementing risk controls.

• Trading algorithms and strategies APIs: These APIs enable the platform to execute trading strategies and algorithms developed by the user or third parties. 

It is important to carefully consider which third-party integrations are necessary for your online trading platform, as they can significantly impact the overall cost of development.

Testing: Making sure the platform is ready for release 

Testing is an essential part of the development process for any trading system. It helps to ensure that the platform is reliable, efficient, and user-friendly and that it meets business and technical requirements. 

There are several stages of testing that are typically involved in the trading software development:

1. Unit testing: This is the first stage of testing, and it involves testing individual units or components of the platform to ensure that they function as expected. Unit testing helps to identify defects at an early stage when they are easier and cheaper to fix.

2. Integration testing: This stage involves testing how different units or components of the platform work together. Integration testing helps to ensure that the different parts of the platform are compatible and work seamlessly together.

3. System testing: This stage involves testing the platform as a whole to ensure that it functions as intended. System testing includes functional testing, which tests the platform's features and functionality, and non-functional testing, which tests the platform's performance, security, and other non-functional aspects.

4. Acceptance testing: This stage involves testing the platform from the perspective of the end user to ensure that it meets their needs and expectations. Acceptance testing includes usability testing, which tests the platform's usability, and user acceptance testing, which tests whether the platform meets the business and technical requirements.

All testing phases usually take about 100 hours. 

By following a structured testing approach that includes unit testing, integration testing, system testing, and acceptance testing, businesses can ensure that they deliver a high-quality and user-friendly online trading platform that meets the needs of their users.

Compliance requirements for online trading platform 

To create an online trading platform that is legal, product owners must obtain the necessary licenses and approvals from regulatory bodies in the countries where it operates.

In the United States

In the United States, online trading platforms are typically regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). In order to offer trading services to customers in the US, an online platform must register with the SEC and become a member of FINRA. To obtain these licenses, an online trading platform must submit an application and provide detailed information about its business operations, financial stability, and compliance with relevant laws and regulations.

In the European Union

In the European Union, online trading platforms are regulated by the European Securities and Markets Authority (ESMA). In order to offer trading services in the EU, an online platform must obtain an authorization from the relevant national regulator in the EU country where it is based. The process for obtaining this authorization will vary by country, but typically involves submitting an application and demonstrating compliance with EU financial regulations.

In addition to regulatory licenses, trading apps and platforms may also need to obtain other types of licenses, such as a money transmitter license, in order to legally operate in certain jurisdictions.

It is important for online trading platforms to comply with all applicable laws and regulations in order to protect their customers and maintain the integrity of the financial markets.

The cost of online trading platform development: Total calculation

The total cost of developing an online trading platform can vary significantly depending on a variety of factors, including the complexity of the platform, the technologies and frameworks used, and the size and experience of the development team.

Some of the key factors that can impact the cost of online trading platform development include:

• Scope of the project: The complexity and size of the platform will have a significant impact on the development cost. A simple platform with a limited set of features may be less expensive to develop than a more complex platform with a wide range of features and integrations.

• Technologies and frameworks used: The specific technologies and frameworks used to develop the platform will also affect the cost. Some technologies and frameworks may be more expensive or time-consuming to work with than others.

• Size and experience of the development team: The size and experience of the development team will also impact the cost of the project. A larger team with more experienced developers may be able to complete the project more quickly and efficiently, but may also be more expensive.

Overall, it is important to keep in mind that online trading platform development is a complex and time-consuming process that requires significant resources and expertise. As such, it is important to carefully consider the budget and timeline for the project and to work with experienced developers to ensure the success of the platform.

However, we can make an approximate estimation cost, depending on the region of the development team. 

Please note that we didn’t add the cost of third-party integrations, the work of technical writers, and the legal team fees here. That said, it may cost from $30,000 to $150,000 to build a trading platform. 

Wrapping up

As we’ve already seen, it's difficult to provide an exact cost for frontend development without more information about the specific requirements of the project. However, with the trusted and reliable software development partner by your side, it’s always a smooth and transparent process. At Yellow, we have 7+ years of experience in FinTech and trading solutions development. You can take a look at your portfolio here and book a consultation with us in case you’ve some ideas regarding your future product.