- Automated process of trading where the software performs buying and selling activities based on pre-defined norms.
- Examples
- Arbitrage, High-frequency Trading (HFT), and Pairs Trading.
- Arbitrage
- Based on the minute price changes on the same securities which are traded on different exchanges.
- HFT
- large volumes of orders which are executed in very fast speeds, take advantage of price variations of fractions of a cent or less.
- Pairs trading
- It is the simultaneous buying and selling of a related pair of assets.
- Legal in India; regulated by SEBI.
