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Speaking for what goes on in Europe (including CIS) bots are a tool usually deployed by market makers in order to balance books when the market maker takes a position.

In Australia there are no offical market makers as the market works by direct access to individual participants.

Consequently individual brokerage firms take on the responsibilities of a market maker from time to time.

In this case rather than say no to an insto client who wants to buy or sell in size the broker will say yes, take on the position either onto its own book or through an undertaking to complete and will use the bot in order to complete at a price that is neutral (or as neutral as possible) to the brokers p&l.

The bot can also be tuned a little bit during the process to allow a little extra profit as and when the market moves.

bots are therefore a tool that brokers use to execute large trades in the absence of individual market making firms. The idea is usually to offer the client the day's VWAP and of course to charge them commission for the trade.

I would find it very unlikely that instos use bots directly they are a brokerage tool.

In case you are wondering I am a market maker trader at a Ukrainian investment bank on the Russian and Ukrainian markets.

I have used bots twice this year to execute large client orders - in each case I was after VWAP on the trades.

EB