Why is my symphony holding cash?
Composer’s automated trading tries to align your portfolio holdings as closely as possible to the logic of your chosen symphonies. However, there are a few reasons why your symphony holds cash rather than invested assets at any given time. Here's a detailed breakdown to help you understand the various scenarios:
1. Intentional Cash Buffer
When trading, a small buffer of .001% of each symphony’s value is intentionally left in cash in order to account for any regulatory fees that can get applied later in the day.
2. Minimum Trade Requirements
Our clearing partners, Alpaca and Apex, have minimum trade requirements ($1 and $5 respectively). If your intended trade amount for a particular asset is below these minimums, the funds cannot be invested and will remain as cash.
3. Fractional Share Limitations
Some assets are not fractionable (for example, Berkshire Hathaway’s BRK Class A stock). If your intended trade amount does not reach the market price of a single share or line up closely with a whole number of shares, then excess cash will stay in your symphony until it can be allocated within these constraints.
4. Market Fluctuations and Order Execution
Market conditions can also lead to unexecuted orders. If an asset experiences significant price fluctuations, orders may not execute at the expected prices, leaving uninvested cash.
5. Different Settlement Periods
Automated trading of hybrid symphonies, which trade stocks and cryptocurrencies across accounts, can extend over several days because of the need to respect two different settlement rules. Stocks settle T+1 (one business day after the trade date), while cryptocurrencies settle instantly. If your symphony sells equities to buy cryptocurrencies with the proceeds, your funds will stay as cash during the settlement period until they can be reinvested. For more information about how stocks and cryptocurrency are held and traded in different accounts, please visit *insert help article*.
6. Trading on Non-Market Days
If your hybrid symphony makes trades on days when the stock market is closed (weekends, holidays), only its crypto components can be traded on those days. Any portion allocated for equities will remain in cash until the next stock market day.
7. Liquidation Procedures
When you choose to liquidate a hybrid symphony, the crypto assets can be sold immediately, but the equity portion will only be sold on the next market day, 15 minutes after the market opens. This procedure will result in cash holdings until the equity transaction is completed.