How to implement T+0 reversal trading
The so-called T of T+0 refers to the date of the stock transaction. Any trading system in which stock and price clearing and delivery procedures are completed on the day of stock transaction is called T+0 trading. In layman's terms, stocks bought on the same day can be sold on the same day. T+0 trading was once implemented in our country, but because it was too speculative, starting from January 1, 1995, in order to ensure the stability of the stock market and prevent excessive speculation, the stock market was changed to "T+1" Trading system, stocks bought on the same day cannot be sold until the next trading day. At the same time, "T+0" is still implemented for funds, that is, the funds withdrawn on the same day can be used immediately.
Swing trading is a trading method established for the implementation of the T+3 settlement system for B shares. It can reduce investors’ position risks and enhance the liquidity of B shares. The Shanghai Stock Exchange introduced the swing trading system in October 1993. In the case of reversal trading, the stocks that investors can sell can be divided into two parts: one part is the stock to fulfill the delivery obligation, and the other part is the stock that has been purchased but has not yet been settled. But no matter when he buys or sells stocks, he can only handle the settlement of these transactions on the third business day after the transaction is completed, and the purchases and sales on the same day cannot be offset.
Characteristics of the "T+0" reversal trading system:
1. The speculative nature is enhanced and the speculative opportunities are increased, which is very suitable for the operation method of short-term speculators.
2. Since the main force can buy and sell at will, it will lead to the prevalence of cross-selling, and the main force will use false trading volume to induce retail investors to change the direction of their operations.
3. As the number of retail transactions increases, transaction costs will increase significantly, which is a big plus for securities companies.
4. The increase in the number of retail transactions and transaction fees will lead to an increase in transaction costs and thus an increase in speculative risks.
5. The retail boat is easy to turn around, and it is easy to follow up or escape in time.
6. After losing the role of "T+1" in helping rise and fall, the amplitude of stock indexes and individual stock prices will intensify.
7. If the "T+0" trading method is implemented, it will have a direct positive effect on small-cap stocks.
With the help of the mechanism of two prices in two markets, ETF can realize T+0 in disguise, realize multiple arbitrage behaviors between the two markets, and improve the efficiency of fund use.
How to achieve it? Cathay Pacific Yibao will tell you in detail.
Just like buying a stock on the same day and selling it on the second trading day at the earliest, ETFs purchased in the primary market on the same day cannot be redeemed in the primary market. Similarly, if you buy an ETF in the secondary market on the same day, you cannot sell it in the secondary market. However, after purchasing Cathay Financial ETF shares in the primary market, you can sell them in the secondary market on the same day. Similarly, after buying 500,000 shares of Cathay Financial ETF in the secondary market, you can redeem it in the primary market on the same day.
This achieves T+0 in disguise. Most people who have done futures have this habit of not leaving a position overnight because they cannot confirm what will happen the next day. Most professional arbitrageurs also have this habit of not leaving positions overnight, so they use the disguised T+0 function of ETFs to clear positions overnight.
Sometimes you can make multiple round trips in a day, because although stocks can only be sold on T+1, the funds are used on T+0, that is, they can be bought into other stocks immediately after they are received. . Therefore, when the T+0 of ETF meets the T+0 of fund use, investors can continue to arbitrage back and forth between the primary and secondary ETF markets within a day without occupying additional funds. Greatly improve the efficiency of use of funds.