Understanding Symphony Swaps in Automated Trading

When you have multiple symphonies in your Composer account, the platform uses a process called symphony swaps to follow your symphony logic while minimizing the number of trades you need to make.

These automated internal exchanges are a part of Composer’s automated trading process and can save money on transaction fees, improve price execution, reduce wash sales, and minimize exposure to price fluctuations - all without any action needed from you.

What are Symphony Swaps?

Symphony swaps are internal exchanges that occur between your symphonies before market orders are placed. During each Trading Period, Composer first reconciles all the desired position changes across your symphonies through swaps, then places only the necessary market orders for your entire portfolio of symphonies.

Since swaps are internal exchanges within your account, they don't incur any trading fees.

How Symphony Swaps Work

Every day during the Trading Period, Composer uses the following automated process:

1. Each symphony calculates its desired asset allocation
2. Composer identifies swap opportunities–when one symphony wants to buy an asset while another wants to sell it
3. Composer handles these internal exchanges by swapping assets between symphonies
4. Only the remaining net changes are then executed as market orders

Here’s an example:

• Symphony A wants to sell 3 shares of QQQ
• Symphony B wants to buy 2 shares of QQQ

What happens:

• 2 shares of QQQ are transferred from Symphony A to Symphony B through a swap
• Only 1 share of QQQ is actually sold on the market

This process happens automatically during each Trading Period. Composer handles this even if your symphonies have very different trading frequencies, because swaps are made based on each symphony's desired allocations for that particular day.

What Are the Benefits of Symphony Swaps?

Symphony swaps can provide a number of advantages:

• Fewer market orders mean reduced transaction fees
• Smaller market orders typically face better price execution with less slippage
• Fewer orders are processed more quickly
• Smaller orders have less influence on market prices
• Making swaps instead of market orders may reduce wash sales 
• Placing fewer market orders means less exposure to price fluctuations during trading

Viewing Symphony Swap Activity

Look for transactions labeled “Swaps” in your Symphony History and see what assets were swapped between symphonies during the Trading Period.