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What is Algorithmic Trading?

1 min read
RBI Grade BNABARD ESISEBI
In one line

Also read: Securities and Exchange Board of India (SEBI)

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  • 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.
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