“au Kabucom Securities” has changed its name to “Mitsubishi UFJ eSmart Securities” and will start “expanding SOR services and offering algorithmic orders” on March 3, 2025.
It will also be available on “kabu station”, so I feel that the organizational structure has changed and they are serious about entering the stock market! I’m so happy! lol
However, I’m not a big investor, and of course these things could be done by program, so I don’t really feel the advantage.
Structurally, I can imagine that these “algorithmic orders” will be shared by “Mitsubishi UFJ eSmart Securities” and “Morgan Stanley MUFG Securities”, and in some cases, by sharing information between securities companies, it will be quite advantageous in the battle against large investors.
Especially the last dark pool, which is basically “It’s a drinking act, but please place an order with a spot trading designation!”, and the definition of the word is a bit confusing.
To take it to the extreme, I feel that the “algorithmic orders” used by users are a tactic, not a strategy, and do not result in any inherent profit.
In essence, I think an “algorithmic order” is one that “utilizes” users’ depth of market information and order situations like this one, to generate profits for the securities firm.
Ideally, traders and securities firms would like to have a mutually beneficial relationship without any conflicts of interest.
The following is an excerpt from the official website
- Stealth
An algorithm that executes orders without displaying them on the Tokyo Stock Exchange’s order book. Since your orders are not displayed on the order book, you can trade without other investors knowing your trading strategy or order intentions.
https://youtu.be/kfQL_K5VZXY?si=gOR0PKRZf24CoWlR - Iceberg
An algorithm that executes orders by displaying only the specified number or percentage of shares on the Tokyo Stock Exchange order book. Since not all of your orders are displayed on the order book, you can trade while hiding your trading strategy and order intentions from other investors.
https://youtu.be/Ax_dCfPpMoI?si=m8DAAzYdK9l-HhkZ - Reversion
An algorithm that executes orders on a schedule that is deemed optimal depending on the size of the order, the trading situation of the stock, etc. It aims to minimize indirect costs involved in trading, such as market impact, execution timing costs, and opportunity costs.
https://youtu.be/q7r0efjSyo4?si=wCEEF5T4hGbJvwH- - Peg
An algorithm that always executes orders by displaying them at the best bid and offer on the Tokyo Stock Exchange’s order book. It is effective when market orders have the risk of affecting the market price and executing a transaction at an unintended price.
https://youtu.be/h7B6GlN0hN0?si=p3DD3gxkz2YSGb6E - POV
An algorithm that specifies the participation rate based on market volume and executes at a fixed rate. This is effective when trading large amounts and wanting to match trading to market liquidity as much as possible.
https://youtu.be/Cr2H7SSo15Q?si=RCkHjUJey9ByoRxi - TWAP
An algorithm that divides the number of ordered shares equally over time. This is effective when you want to make the average contract price closer to the time-weighted average contract price for the day of the stock when you are making large-scale transactions with stocks whose trading volume is difficult to predict.
https://youtu.be/DMeetvG7TqI?si=nfVLDYjK9Z2GSmAJ - Dark Pool
An algorithm that does not place orders on exchanges (TSE, PTS) and only places orders in dark pools. This algorithm aims to reduce order signals.
https://youtu.be/xgjurA3Y4D0?si=q350BPdFR7BAY1Jv
