Terms

Algorithmic Trading

Algorithmic trading is a process for executing orders utilizing automated and pre-programmed trading instructions to account for variables such as price, timing, and volume. It makes use of complex formulas, combined with mathematical models and human oversight, to make decisions to buy or sell financial securities on an exchange. Algorithmic trading can be used in a wide variety of situations including order execution, arbitrage, and trend trading strategies.

Algorithmic traders often make use of high-frequency trading technology, which can enable a firm to make tens of thousands of trades per second.