How Hybrid Symphonies Work

What are hybrid symphonies?

Composer’s hybrid symphonies let you trade stocks, ETFs, and crypto within a single automated trading strategy.

For example, you might want to switch between holding SPY, the S&P 500 ETF, and Bitcoin depending on their recent performance. With a hybrid symphony, you can do exactly that:

What are the advantages of using hybrid symphonies?

Diversify your trading strategy. With hybrid symphonies, you can combine crypto investments with stock and ETF assets that target specific geographies, and industries, or that have leveraged or inverse exposure to your chosen index. You can also incorporate signals from both stock and crypto markets into your strategy.
Invest in crypto directly. Trade cryptocurrencies like Bitcoin, Ethereum, and emerging coins like Solana, without relying on ETFs. This approach eliminates additional ETF fees, and provides access to a broader range of assets.
Run longer historical backtests. Without relying on crypto ETFs, you can access longer historical data for both stocks and cryptocurrencies when modeling your chosen symphony.

What accounts do hybrid symphonies use to trade?

Composer automates hybrid symphony trading across two sub-accounts:

A brokerage account held at Alpaca Securities, which holds stocks and cash.
A crypto account held at Alpaca Crypto, which holds cryptocurrencies.

How does Composer automate trading in hybrid symphonies?

Every day during the trading period, Composer evaluates your hybrid symphony's logic and automatically trades following this logic. To do so, Composer buys and sells crypto in your crypto account and buys and sells stocks in your brokerage account according to your chosen logic.

If the symphony logic determines you should buy a cryptocurrency, money will get moved from your brokerage account to your crypto account and that money will be used to purchase the needed cryptocurrency. If the symphony logic determines you should sell a cryptocurrency and buy a stock, the cryptocurrency will be sold, and the proceeds from the sale will be moved to your brokerage account and then used to buy the needed stock.

Moving from stocks to crypto requires an additional step: a one-day transition in cash to account for T+1 settlement for stock sales. If you’ve previously invested in stock symphonies with Composer, note that this T+1 settlement period is handled differently for stock vs. hybrid symphonies. Symphonies that invest only in stocks are able to sell and buy stocks on the same day by using limited margin. Limited margin cannot be used to purchase cryptocurrencies, so hybrid symphonies must wait overnight for the proceeds of stock sales to arrive before buying crypto. All Composer hybrid symphony backtests and trading mechanics account for this T+1 settlement requirement.

What are the requirements to invest in hybrid symphonies?

You need to be a resident of a state where crypto trading is supported. Currently, Composer supports crypto trading in the following states: California, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nebraska, North Carolina, North Dakota, Ohio, Rhode Island, South Dakota, Utah, Vermont, and Washington.
You need to have a Composer Trading Pass.

What are the costs associated with hybrid symphonies?

Automated trading with hybrid symphonies involves the following costs:

Trading Pass: In order to invest, you need Composer’s Trading Pass, which costs $288 annually or $30 monthly.
Crypto spread markup: There is a 0.2% commission charged per crypto trade.
FINRA & SEC Regulatory fees: Regulatory fees are charged on the sale of stocks and ETFs. Currently, the SEC Fee is charged at $27.80 per $1,000,000 of principal sold, rounded up to the nearest penny per transaction. The FINRA Trading Activity Fee (TAF) is $0.000166 per share sold, rounded up to the nearest penny per transaction, with a maximum of $8.30 per transaction.

Onboarding and account setup for hybrid symphonies

Here’s what you need to do in order to invest in hybrid symphonies:

Set up your account: Open a Stock + Crypto account with Composer to manage all your investments. This encompasses a brokerage account at Alpaca Securities, which holds stocks and cash, and a separate crypto account at Alpaca Crypto, which holds cryptocurrencies.
Get a Trading Pass: Start with a free 14-day trial to invest in hybrid symphonies and try out automated trading.
Fund your account: When you fund your Stock + Crypto account, your funding goes to your brokerage account, with transfers to the crypto account as needed for crypto purchases.

Hybrid symphonies on Composer’s Discover page

Hybrid symphonies trading both stocks and crypto are labeled on the Discover page with a “Hybrid” label. If you’d like, you can choose to filter symphonies shown on this page to see only hybrid symphonies.

Any symphonies that trade stocks – both stock symphonies and hybrid symphonies – require a Trading Pass. All symphonies that require a Trading Pass to trade are labeled with a dollar symbol on the Discover page.

Where are hybrid symphony funds and assets held? Are they protected?

Hybrid symphonies hold assets in two accounts – a brokerage account and a crypto account. The brokerage account, managed by Composer Securities and held at Alpaca Securities, holds stocks and cash. The crypto account, held at Alpaca Crypto, holds cryptocurrencies. Cash is only held in your brokerage account.

Cash is transferred from your Alpaca Securities account to your Alpaca Crypto account to make cryptocurrency purchases and transferred back from your Alpaca Crypto account to your Alpaca Securities account after making cryptocurrency sales.

Composer Securities is a member of SIPC, which protects customers of its members for securities worth up to $500,000 (and including $250,000 for cash claims). Cryptocurrencies are not securities and are not FDIC insured or protected by SIPC.

Hybrid symphony trading mechanics

Composer's hybrid symphonies execute automated trades within specific trading periods. Your symphony will automatically trade during these times:

Stock trading period: 3:45 to 4:00 PM eastern on market days.
Crypto trading period: 3:45 to 4:15 PM eastern every day.

After you invest in a hybrid symphony, Composer starts trading to match its logic during the next trading period. Hybrid symphonies can take multiple days to make a full investment. If you invest in a hybrid symphony on a weekday before the trading period, then both stocks and crypto can typically be bought during that day’s trading period. If you invest on the weekend, for example, on Saturday morning, then the symphony will buy any assets available during the very next trading period (in this case: only crypto during Saturday’s crypto trading period), and hold the remainder of its holdings in cash until it can make needed purchases.

Hybrid symphonies can take multiple days to move between stocks and crypto. There are two reasons for this:

Crypto can be traded any day of the week, but stocks only on market days. If the symphony logic dictates switching from crypto to stocks during a weekend trading period, only the required crypto sales can be made because the U.S. stock market is closed. The remainder of the symphony will stay in cash until needed purchases can be made.
There is a T+1 settlement requirement when moving from stocks to crypto. Stock sales require T+1 (overnight) settlement, but this settlement period only applies to subsequent crypto purchases. Limited margin in your brokerage account allows stock sale proceeds to be used immediately to purchase other stocks. Limited margin cannot be used to purchase cryptocurrencies. After selling stocks, hybrid symphonies need to wait overnight for the proceeds of stock sales to arrive before purchasing crypto. Crypto sales settle instantly, so funds from crypto sales can be deployed to make crypto or stock purchases immediately.

Hybrid symphony trading on non-standard days

Hybrid symphonies can trade every day of the week. Any needed crypto purchases or sales can be completed every day, but stocks can only be bought and sold on stock market days.

Let’s go through different possible scenarios:

If you invest in a hybrid symphony on Saturday, at 9 AM eastern: The symphony will trade during the next trading period on Saturday afternoon (starting 3:45 pm eastern for crypto). If the symphony logic dictates buying crypto, crypto purchases will be made. If the symphony logic dictates buying stocks, the money allocated for stocks will remain in the symphony until a purchase can be made.
If you invest in a hybrid symphony on Sunday, at 10 PM eastern: The symphony will trade during the next trading period on Monday afternoon (starting 3:45 pm eastern for both stocks and crypto). If the symphony logic dictates buying crypto, crypto purchases will be made. If the symphony logic dictates buying stocks, stocks will be bought.
If you liquidate your hybrid symphony on Saturday, at 9 AM eastern: Any crypto assets the symphony holds will be sold right away. All of the stock sales will be scheduled for 15 minutes after the stock market next opens.
If you sell part of your hybrid symphony on Saturday at 9 AM eastern: The sale will be scheduled for the next trading period on Saturday afternoon (starting 3:45 pm eastern for crypto). Let’s say you want to sell $50 from a hybrid symphony worth $1000. The symphony logic will be evaluated during Saturday’s trading period and $50 worth of sales will be initiated based on this logic. If the symphony logic dictates selling crypto, crypto sales will be made. Any remaining sales will be pending. If still pending, the symphony logic will be evaluated again during Sunday’s trading period and Monday’s trading period and sales will be initiated until the full $50 sale is complete. It is possible that the full sale will complete on Saturday, Sunday or Monday.

On early market close days (e.g., the day after Thanksgiving, the day before Christmas), the stock and crypto trading periods begin at 12:45 pm eastern (15 minutes before the market closes) and automated trading happens during these periods.

What happens to hybrid symphonies if you cancel your Trading Pass?

If you cancel your Trading Pass and the pass expires, then automated trading in any symphonies that trade stocks – both stock symphonies and hybrid symphonies – will be paused. You will still be able to liquidate these symphonies and withdraw your funds.

Building hybrid symphonies in the editor

You can add both stock and crypto assets into a single symphony. Asset selection is broken up into “stocks” and “crypto” sections since tickers are not unique across stocks and crypto (e.g., BTC is the ticker used for Bitcoin but also the Grayscale Bitcoin Mini Trust ETF).

The available symphony trading settings depend on the kind of symphony you build:

Stock symphonies and crypto symphonies can be traded with a daily, weekly, monthly, quarterly, yearly frequency or with a threshold setting.
Hybrid symphonies can only be traded with a daily or threshold setting. The reason for this more limited selection is because hybrid symphony trading can expand across multiple trading periods. Daily and threshold trading prevents a hybrid symphony from remaining in cash indefinitely.

Metric calculations for assets:

If you’re building a symphony using metrics calculated based on a certain number of days (e.g., 10 day cumulative return, 20 day RSI), the number of days used to calculate a metric is the number of trading days for that asset. Since crypto trades every day, while stocks only on market days, the 10 day cumulative return for a stock would be calculated on the previous 10 market days (i.e., weekdays), and the 10 day cumulative return for a cryptocurrency would be calculated on the previous 10 calendar days.

Metric calculations for weighted asset groups (including filters):

A group made up entirely of stocks or groups of stocks: When your symphony group is made up entirely of stocks, any computed metric values are kept flat during non-market days. For example, the standard deviation of returns remains constant over weekends because there are no price movements in stocks during these times.
A group made up entirely of crypto or groups of crypto: When your symphony group is made up entirely of cryptocurrencies, any metrics are computed daily, including weekends and holidays. This reflects the non-stop market for cryptocurrencies and allows metrics like the standard deviation of returns to fluctuate based on market activity.
A mixed group made up of stocks and crypto: Adding even a single cryptocurrency asset to a group of stocks changes how metrics are computed for non-market days. In this case, metrics are calculated daily, including weekends and holidays. While the overall value calculated for the group can change during these non-market days, it can only do so through changes to its crypto components. Since only the cryptocurrency components can change in price on those days, and so only that percent of the group’s value can change on those days, metrics reflecting the volatility of the group’s value or its average daily returns over a short period can differ significantly and unexpectedly from that of a similar stocks-only group.

Backtesting hybrid symphonies

There are many ways to backtest and view performance metrics when comparing across asset classes. Here are the key details on how Composer backtests work for different symphony types.

Backtesting stock symphonies:

Calendar: Backtesting is conducted based on the market day calendar, reflecting only the days the stock market is open. The accompanying backtest graph shows only the days when the stock market is open.
Metrics: Performance metrics, including annualized return and Sharpe ratio, are calculated using an average of 252 trading days per year.
Comparison: When comparing a stock symphony against any benchmark—whether it's a stock, a stock symphony, a cryptocurrency, a crypto symphony, or a hybrid symphony—the same market day calendar is applied to calculate all performance metrics. Non-market day performance data from individual cryptocurrencies, crypto symphonies and hybrid symphonies will be removed so that data points can be aligned for comparison. This standardization is kept even if the stock symphony uses cryptocurrency metrics for decision-making.

Backtesting crypto symphonies:

Calendar: Backtesting is conducted based on a full calendar that includes all days, reflecting the fact that crypto can be traded every day. The accompanying backtest graph similarly displays all days.
Metrics: Performance metrics, including annualized return and Sharpe ratio, are calculated using an average of 365.25 trading days per year.
Comparison: When comparing a crypto symphony against any benchmark—whether it's a stock, a stock symphony, a cryptocurrency, a crypto symphony, or a hybrid symphony—the same all-day calendar is applied to calculate all performance metrics. Non-market day performance data for stock symphonies and individual stocks will be added in (using the value on the last market day) so that data points can be aligned for comparison.

Backtesting hybrid symphonies:

Calendar: Backtesting is conducted based on a full calendar that includes all days, reflecting the fact that hybrid symphonies can be traded every day. The accompanying backtest graph similarly displays all days.
Metrics: Performance metrics, including annualized return and Sharpe ratio, are calculated using an average of 365.25 trading days per year.
Comparison: When comparing a hybrid symphony against any benchmark—whether it's a stock, a stock symphony, a cryptocurrency, a crypto symphony, or a hybrid symphony—the same all-day calendar is applied to calculate all performance metrics. Non-market day performance data for stock symphonies and individual stocks will be added in (using the value on the last market day) so that data points can be aligned for comparison.

As explained above in the trading mechanics section, hybrid symphonies can take multiple days to make a full investment, a full sale, and to move between stocks and crypto. Cash held during transitions will be reflected in a full or partial cash ($USD) balance in the symphony holdings table section of the backtest.

Hybrid symphony backtests model the costs associated with trading hybrid symphonies: Composer’s Trading Pass, regulatory fees, and slippage. See the full details about estimated trading costs in backtests.

Your Stock + Crypto portfolio

To give you an overview of all your holdings with Composer, your portfolio page shows you all the symphonies you’re invested in–hybrid symphonies, stock symphonies and crypto symphonies. You can see key information about all of your symphonies and all of your holdings.

Your overall portfolio metrics reflect the performance of all your holdings – both stocks and crypto.

Hybrid symphonies can take multiple days to make a full investment, a full sale, and to move between stocks and crypto, so you may notice periods where your hybrid symphonies hold a larger cash remainder. See more details about all the reasons why a symphony can hold cash.

Taxes and documents

You’ll receive separate monthly statements and tax documents for your Alpaca Crypto and your Alpaca Securities accounts. Monthly statements are available approximately a week after the end of the month. Tax documents for the previous year are available by the end of March.