Algorithmic trading, or algo-trading, has gained popularity for its ability to process data quickly and execute trades efficiently. In India, it is still in its early stages but is growing rapidly with the rise of electronic trading platforms. Algo-trading offers benefits such as analyzing large amounts of data in a short time and facilitating faster and more efficient trade execution.

“In India, algo-trading is becoming increasingly popular due to the growth of electronic trading platforms and the increasing adoption of technology in the financial sector.”

- Sonam Srivastava, Founder, Wright Research

Here’s the gist:

• Algorithmic trading (algo-trading) involves the use of computer programs to automatically execute trades in financial markets based on predetermined rules.

• Algo-trading has gained popularity in India, especially with the growth of electronic trading platforms and increasing adoption of technology in the financial sector.

• Algo-trading offers benefits such as increased efficiency, speed, accuracy, and cost savings compared to manual trading.

• It makes trading more systematic by reducing the impact of human emotions and errors, and it contributes to market efficiency and liquidity.

• Algo-trading platforms and services are offered by exchanges and brokers in India, including the NSE and BSE, with platforms like Omnesys Nest, NOW, and Tradeplus being popular.

• However, algo-trading also has drawbacks, including potential suboptimal decisions during volatile markets or lack of historical data, and the possibility of errors, malfunctions, market manipulation, and fraud.

• Traders and investors should carefully research and compare different algo-trading platforms and services, considering the fees, features, and associated risks before deciding to use them.

Read the full article here on Mint.

To learn more about Algo Trading check out these articles

1. What are the different types of Algo Trading?
2. Best Algo Trading Platforms in India: Our Recommendations