Are trading bots legal in the US?
What is legal, and what is regulated
Automated and algorithmic trading has been a normal part of US markets for decades — most volume on US exchanges is machine-driven. Retail traders are allowed to automate their own accounts, and brokers like Robinhood now publish official agentic APIs as the sanctioned front door for software agents.
Regulation focuses on conduct. Manipulative strategies (spoofing, layering, wash trading) are illegal whether a human or a bot executes them. Selling advice or managing other people's money triggers registration requirements. And marketing a bot with invented performance claims can be securities fraud even when the software itself is legal.
- Automating your own account through an official broker API: legal.
- Manipulative order patterns (spoofing, wash trades): illegal, human or machine.
- Managing other people's money without registration: illegal in most cases.
- Marketing with fabricated results: actionable fraud regardless of the underlying software.
Why the broker's terms matter as much as the law
Even where the law is silent, your broker's terms of service govern what automation is allowed. Screen-scraping bots that log in with your password typically violate those terms and can get your account closed — apart from being a security nightmare.
This is why official agent APIs matter: they define what software may do, keep the broker's own compliance checks in the loop, and give you a revocable connection instead of a shared password. Our desk connects only through Robinhood's official Agentic Trading API, and every order still passes the broker-side review step. Robinhood does not endorse or sponsor EB28 — we simply use the public front door they built.
First-party data — from our own desk
More questions people ask
Do I need a license to run a trading bot on my own account?
No license is required to automate trading in your own personal account. Licensing and registration questions arise when you trade other people's money or sell personalized investment advice.
Are trading bots regulated by the SEC or FINRA?
The bots themselves are not licensed products, but the trading they do falls under the same SEC, FINRA, and exchange rules as human trading, and brokers must supervise the order flow reaching the market.
Can a broker ban my bot even if it is legal?
Yes. Brokers set their own automation terms, which is why using an official API — rather than a password-based workaround — is the difference between a supported setup and a banned one.
Regulator resources and sources
Independent, official reading — not affiliated with EB28:
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