Acceptances of Algorithm Trading and Online Trading

Abstract

The purposes of this research were to (1) construct model in explaining acceptance of algorithm stock trading of investors in Stock Exchange of Thailand (SET) and (2) compare this model with the acceptance model of online trading. Based originally on technology acceptance model (TAM), theory of reasoned action (TRA), and concept of perceived risk and trust, the proposed model was constructed as acceptance of algorithm trading model and acceptance of online trading model. The study employed both quantitative and quality methodologies. Sample of 327 investors who use online stock trading and 146 investors who use algorithm stock trading were observed and analyzed using structural equations model (SEM) and generalized linear regression model using Logit. The results confirmed the proposed models supporting that attitudes toward stock trading (online stock trading or algorithm stock trading), subjective norm on stock trading, perceived risk of stock trading, and trust on stock trading were factors determining intention to use and decision to use such stock trading. However, attitude toward online stock trading, which was heavily determined by perceived ease of use online trading, played important role in determining intention and decision to using online trading while trust of investors on algorithm stock trading as trading strategy was major factor in deciding whether to invest using such algorithm trading. Therefore, in order to promote online trading, Thai regulator should motivate broker to design simple and user friendly online trading system while promoting algorithm trading can be done by building trust on algorithm trading as profitable trading strategy.