What is Algorithmic Trading ?
Indian traders and investors are quickly catching up with
algorithmic trading, a gift of technical advancement to the stock market.
Professional traders and arbitrageurs use modern technology tools to increase
speed of execution in order to keep up with changing times. And algorithmic
trading has proven to be useful. It has played an immense role in the
development and growth of Indian share market as traders have gained a lot of
knowledge, exposure and confidence with regards to trading and investing.
Initially, algorithmic trading was used to speed up the most
basic tasks, such as buying something on one exchange and selling it on
another, and profiting from the difference as an arbitrage profit. They became
more sophisticated after that by using futures or options, to produce
profitable trades that entered and exited in milliseconds.
On the client side, Algo trades account for about half of all
orders (more than 50%) at both the NSE and the BSE. SEBI, the market regulator,
recently strengthened the framework for algorithmic trading, making it more
widely accepted and unobtrusive.
Indian stock market is filled with enthusiastic traders and
investors who are keen to explore every inch of the market in order to exceed
in their trading journey. Algo-trading gave such traders an opportunity to
explore different stocks and markets with ease and providing assistance in
opening and closing positions spontaneously by responding to the volatilities.
Algorithmic trading is widely used by traders and investors
as it helps save time on trades, especially in the market where time has a lot
of value. Complex Algo-trading is expected to take over the manual trading
system in stock market soon as technology and its use is upgrading every single
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