Computers placing orders automatically according to preset rules
Algorithmic trading builds conditions such as price, size and timing into a program, which then places orders automatically. Some systems split a large order into small pieces so it draws less attention; others, known as high-frequency trading, buy and sell many times a second. A large share of orders in today's markets is said to come from such systems, and they are sometimes cited as one reason prices can lurch within moments.
Splitting an order to buy 100,000 shares into 200 orders of 500 shares across one day is one form of algorithmic trading.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.