ALGHORITHMIC TRADING

A form of trading in which the decision to trade, its timing or terms (e.g. as to price) are determined by conditions specified in an algorithm. The objective is to enable market participants and investors to respond quickly (normally in an automated manner) to new information or market trends which are relevant for the price of financial instruments. It is a technique that is often used in high-frequency trading (HFT, see below).

 

©2012 Editor: Camera dei Lords