GuShiio.com ① Currently, more than 20 securities firms have deployed T0 algorithm services for general investors;
② Ordinary investors can also use the T0 algorithm to trade on an equal footing, which plays a role in helping long-term holding, reducing costs, and increasing returns;
③ For brokerages, the T0 algorithm is a useful tool to deal with the decline in commissions, improve customer experience, and revitalize customers.
Financial Union, February 22 (Reporter Wang Chen)Let T0 algorithm trading accompany ordinary investors. In recent years, more brokerages have been trying this. The development of this business has also attracted the attention of more A-share investors. On social platforms where investors such as Snowball gather, more voices are discussing this topic and there are more controversies.
In the past, quantitative trading only served institutional investors, but in recent years, with the popularity of quantitative tools such as T0 algorithm services, this convention has been broken and “achieving equal rights in transactions” is also the evaluation of this business by many professionals. “Let ordinary investors also share the immediate benefits brought by stock price fluctuations and increase the benefits, thereby making the market more active.” Industry people interviewed expressed optimism about the business prospects.
The reporter learned that more than 20 securities firms have launched or are planning to launch T0 algorithm services for general investors.
For ordinary investors, what convenience can the T0 algorithm bring? What issues should securities firms pay attention to when carrying out this business? What are the regulatory concerns? Reporters further promoted interviews.
The T0 algorithm may be an easily misunderstood formulation. What exactly is the T0 algorithm? It is actually a simplified term for “intraday trading algorithm” and an automated trading tool based on quantitative models. The core logic is to analyze market data (such as prices, trading volumes, market information, etc.) in real time, capture the spread caused by intraday fluctuations of stocks in a very short period of time, and perform “buy low and sell high” operations, thereby helping investors reduce their positions. Cost or increase earnings.
The T0 algorithm is a type of quantitative trading. The decline of this technology marks the first time that retail investors have stood at the same starting line as institutions at the transaction execution level. For brokerages, the T0 algorithm is applied to general investors and is a tool to deal with declining commissions and improve customer experience and competitiveness; for the market, after investors determine the investment target, the T0 algorithm tool will be added, which will play a role in long-term holding and enhancing returns. The concept of inclusive finance involved in the “five major articles” of finance has also been implemented through the T0 algorithm.
Question 1: What is the value of the T0 algorithm?
The core logic of the T0 algorithm is: first, real-time data analysis. The algorithm identifies price fluctuations and trading opportunities by monitoring market data; second, preset rules trigger trading. For example, when the stock price reaches a preset support level, buy and reach resistance. Sell when it reaches the level; third, high-frequency trading, completing multiple transactions in a short period of time to spread risks and capture the benefits of price spreads.
According to the reporter’s comprehensive understanding, the core value of the T0 algorithm is to reduce the cost of holding positions and increase profits.
Increase in earnings: This is determined by the T0 algorithm’s logic to earn spreads by capturing intraday fluctuations. A number of securities firms revealed that historical data shows that the annualized market value return of the T0 algorithm can reach more than 6%, which is especially suitable for volatile markets. For ordinary investors who hold shares for a long time, the algorithm dilutes costs by “buying low and selling high” without changing their positions, improving the trading experience and potential returns. “My statistics are that using the T0 algorithm can increase the revenue by 10 points.” Some industry people also introduced it to reporters.
transaction equality: The relatively common perception in the industry is that quantitative investment tools such as T0 algorithm and grid transactions have broken the previous disparity in transaction speed and algorithm use between institutions and retail investors, and achieved “transaction equality”, allowing ordinary investors and Institutions can use the same algorithm, improving the fairness and efficiency of the market.
diversify risks: Ordinary investors are prone to falling into unilateral markets due to information lag and operation delays. The T0 algorithm has a built-in risk control module that can monitor price changes in real time and trigger stop losses. For example, when the stock price breaks through a predetermined fluctuation range, the system automatically suspends trading to avoid losses in extreme markets.
Whether it is an ordinary investor or an institution, stock selection and trading are key links in the investment process. Quantitative tools such as the T0 algorithm have brought significant assistance to ordinary investors in the trading process. Stock selection tests investors ‘own abilities and perceptions. Ordinary investors can tap potential stocks based on their own abilities or with the help of AI. Trading matters can use trading tools. This is what the T0 algorithm solves.
The advantages of the T0 algorithm are rapid response, accurate execution, risk diversification, etc. However, it cannot be ignored that extreme market prices may lead to losses, such as rapid ups and downs. At the same time, the T0 algorithm is not guaranteed to make profits, and market fluctuations may lead to strategy failure.
Generally speaking, quantitative tools such as the T0 algorithm have controllable costs and lower thresholds. Compared with the high back-end charges for private equity quantitative products, the brokerage T0 algorithm usually only charges basic commissions and no additional shares, which reduces the cost of use for ordinary investors. At the same time, compared with becoming a qualified private equity investor to purchase quantitative private equity products, the threshold for using quantitative tools such as T0 is lower.
Question 2: Is the T0 algorithm discretionary?
With the promotion of T0 services, a dispute over whether the use of T0 algorithm services is “discretionary”(the whole committee) has surfaced. In this regard, the truth needs to be clarified from technical principles.
Reporters learned from multiple interviews that ordinary investors have autonomy when using T0 algorithm services. In T0 business, customers need to clearly authorize brokers to execute transactions under certain conditions, but account ownership and password are still controlled by customers. When a customer chooses to enable the T0 algorithm for a certain open stock, only the trading rights of the subject are opened, rather than full account entrustment.
The manufacturer providing the algorithm serves as a supplier of securities firms and only provides strategy models and does not touch customer account data. Trading instructions are executed by the client authorized brokerage system to ensure information isolation.
Some industry insiders explained that this is essentially a kind of authority management carried out by securities firms. When a client performs T0 operations, it uses relevant algorithm tools provided by the broker to manage the transaction in the client’s own account based on his own clear trading behavior needs (such as intraday trading operations on stocks held). However, during the trading process, clients can no longer manage their own accounts to avoid conflicts. This is similar to a conditional order operation and does not completely delegate the account to an external vendor for operation.
Question 3: Is the T0 algorithm compliant?
Is it compliant to provide T0 algorithm services to general investors? This is another major controversy currently existing.According to the understanding of many securities firms, this business is compliant.
Brokers have set corresponding opening thresholds when providing services, including funds, risk tolerance, trading experience and compliance requirements. They have clear regulations on customers ‘net assets, risk levels, investment periods, average daily assets, etc., and provide customers with adequate risk warnings,Meet regulatory requirements for the appropriateness of complex financial instruments.
According to brokerage compliance sources, T0 is a brokerage service. On the premise of appropriate management and risk warnings, T0 is provided to customers as an algorithm tool. Customers use the tool to trade their own stocks. When to open and when to close, and set some trading parameters are all decided by the customer.
In addition, there is currently a relatively mature reporting mechanism for quantitative transactions. Trading behaviors that meet certain conditions (such as more than 10 transactions in one second, such as the Double Ten Recognition Standard), whether they are institutions or ordinary investors, need to be reported, and securities firms are responsible for screening and implementing the reporting process. This reporting mechanism helps regulatory authorities grasp the scale and risks of market procedural transactions and enhance the transparency and controllability of the market.
Question 4: How does the T0 algorithm affect the market?
According to brokerage sources, the core essence of the T0 algorithm is to carry out intraday round-down trading operations for customers ‘bottom stocks. During this process, whether the algorithm implements a strategy of buy first and then sell, or sell first and then buy, the number of positions held by the customer at the end of the trading day remains unchanged.
At the market level, the T0 algorithm service is effective enough to curb frequent trading and chasing gains and killing losses common to ordinary investors. Frequent buying and selling operations not only increase their own transaction costs, but also intensify market volatility. The existence of the T0 algorithm helps such investors reduce unnecessary trading behavior,Encouraging investors to pay more attention to the intrinsic value of stocks rather than just being influenced by short-term price movements.In turn, the stability of the market and stock price will be significantly enhanced.
In terms of investor protection, T0 algorithm services create a fairer trading environment for small and medium investors. In the past, small and medium-sized investors were at obvious disadvantages compared with large institutional investors in terms of trading speed, information acquisition and trading tools. Tools such as T0 break this imbalance and enable small and medium investors to enjoy efficient trading methods. From a macro perspective of financial policies, such quantitative trading tools are highly consistent with the concept of inclusive finance in the “five major articles” of finance.
Question 5: How does the T0 algorithm help brokers?
For brokerages, the T0 algorithm is not only a product of technological innovation, but also a strategic tool to revitalize customer assets, cope with declining commissions, and improve competitiveness.
In recent years, the brokerage industry has faced the dilemma of declining commissions, prompting it to transform wealth management. However, there are obvious problems in past transformations, such as over-reliance on sales products and neglect of their own core capabilities. At present, many market views believe that securities firms should return to their main business of improving customers ‘trading experience and service capabilities, and use quantitative investment tools and other means to help customers better trade, rather than simply transforming into sales organizations, banks, and third parties. competition.
T0 algorithm services usually bring higher trading frequency, and the increase in the number of transactions will significantly increase the total commission income of brokers. A relevant person in charge of a brokerage firm revealed: “More and more investors are opening up and using the T0 algorithm function, which has indeed brought a considerable increase in the company’s purchase revenue.”
In addition to the T0 algorithm, brokers can provide a variety of quantitative investment tools, such as grid transactions, condition sheets, etc., as well as related investment services, to meet customer needs and improve customer activity and revenue. These tools can help customers be more scientific and efficient in their trading decision-making and execution processes.
