Stock trading and the injustice of “playing cards to see other people’s cards”?
With self-trading, securities companies will buy and sell securities for themselves through the order-matching and agreement trading mechanism on stock exchanges or decentralized markets. The purpose of this activity is to profit from arbitrage and reserve to ensure market liquidity.
Recently, regarding the parties to buy and sell in the market, there are many investors who think that proprietary trading activities both make recommendations and buy and sell, transaction fees are lower than individual investors, this creates unfairness in the market. Some people even think that stock trading is like “playing cards to see other people’s cards”, and this is not fair to retail investors.
Does self-employment really have many advantages?
Talking about stock trading, Mr. Nguyen Tuan Anh – Founder of FinPeace said that self-trading does not completely have advantages compared to retail investors.
“In the past, I used to do self-trading at a securities company with a large portfolio equivalent to a day’s liquidity. Theoretically, if I press an order by mistake, it may drop to the floor,” said Mr. Tuan Anh. said.
Mr. Nguyen Tuan Anh – Founder of FinPeace said that self-employment does not completely have advantages compared to retail investors.
According to him, many people think that a large portfolio will be favorable, but it is actually quite the opposite. Because the self-trading portfolio is large, but if it is not suitable for the liquidity of the market, the self-trader cannot produce goods.
Meanwhile, individual investors have the advantage with smaller, more flexible portfolios that are easier to move with liquidity in the market.
In addition, Mr. Tuan Anh affirmed that there is no securities company that carries proprietary products to recommend investors. Especially large securities companies will not do this, because it will affect their reputation along with factors related to the law.
The injustice of “playing cards to see other people’s cards”?
Regarding the view that securities trading is like “playing cards to see other people’s cards”, Mr. Pham Luu Hung – Deputy Director of the Center for Analysis and Investment Advisory of SSI Securities Joint Stock Company said that with SSI alone, the automatic rate pure return (investment securities company like a normal investor) is very low. The majority of proprietary trading comes from serving customers, related to the products the company makes.
Mr. Hung emphasized that if you think that trading in securities is like “playing cards to see other people’s cards”, it is a bit “unjust”. According to Mr. Hung, most private-property transactions must be published daily on the Stock Exchange. And a lot of people have the ability to see those transactions.
“If I can see the daily transactions, then based on this information to make profitable trades is very difficult because I also don’t understand why people trade like that,” said Pham Luu Hung. emphasize.
Mr. Pham Luu Hung – Deputy Director of the Center for Analysis and Investment Advisory of SSI Securities JSC, said that even knowing trading information, it is still difficult to grasp market trends.
According to him, behind every buy order is a sell order, it is difficult to understand the market trend, and who will decide the trend.
Right to stop
Talking more about transaction information, Mr. Nguyen Tuan Anh – Founder of FinPeace said that when he was still self-employed, if he had information about self-employed A, B or C doing anything, he did not need to see it.
“If you say that you can see other people’s cards, then the viewing will be delayed by one beat (when people place an order, they will only see it), like walking behind. I don’t believe those who follow can succeed. Going ahead in terms of thinking: Knowing what to buy for and what to sell for will bring success to self-employed people”, Mr. Tuan Anh affirmed.
He also said that no securities company would naturally hand over money to someone who “can do it themselves” and buy whatever they like. The transaction must come from the internal process of the company.
FinPeace’s founder believes that the greatest power of retail investors is the right to choose to stop at any time.
FinPeace’s founder takes another example between gamblers and casino owners. Mr. Tuan Anh believes that gamblers have an advantage because there is a very important right, but very few users have the right to choose to stop at any time.
“Casinos or big players do not have the right to stop, they have to first provide liquidity and be constantly present in the” market,” Mr. Tuan Anh affirmed.
According to Mr. Tuan Anh, the power of small investors is the right to stop. Big investor power is creating trends. When these two powers are balanced, a market will be created
A few days ago, responding to the view that only in Vietnam, securities companies can manage accounts, advise and invest comfortably in securities, the Ministry of Finance said in accordance with international practices. , securities companies are allowed to conduct securities trading, securities underwriting, securities brokerage and securities investment consulting.
“Clause 1, Article 72 of the Law on Securities stipulates that a securities company may be licensed to conduct one, several or all securities business operations, including: Securities brokerage, securities proprietary trading, and issuance underwriting. securities and securities investment consulting”, the Ministry of Finance cited legal regulations.
According to the Ministry of Finance, during its operation, a securities company licensed to conduct proprietary trading, manage customer accounts and advise on securities investment may have conflicts of interest with customers.
Therefore, in order to prevent, the Law on Securities (Article 89) and guiding documents (Circular No. 121/2020/TT-BTC of the Minister of Finance on securities company activities) have regulated regulations to limit conflicts of interest between customers and securities companies (Articles 4, 13, 22), whereby, securities companies are obliged to prioritize interests and protect customers’ assets”, the Ministry of Finance emphasized. strong.
Regarding management and supervision, the Ministry of Finance said that the State Securities Commission conducts regular and continuous supervision through reports or on-site inspection of the activities of securities companies to ensure that securities companies securities operating in compliance with the provisions of the law.
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