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Algorithmic Trading , Bots or , to me , a "expletive" way of...

  1. mdc
    276 Posts.
    Algorithmic Trading , Bots or , to me , a "expletive" way of manipulating markets .
    It is estimated that 80% of all trading executed on the major exchanges is done this way .

    I see over the weekend the Indian Securities Regulators have put in place some small but long overdue measures to confront this Trading .
    Let's hope this spreads to all markets & stops this disease of manipulation .

    All we want is a transparent & fair market for all.

    Algorithmic Trading :

    Impact and Upside: Like automated marketmaking, algorithmic trading helps provide liquidity and lowers spreads and commissions. It also affects how markets function: drop a large rock into a bucket of water, and there's a good chance the water will slosh around and spill over the sides; drop pebbles into the bucket and you can add just as much rock without any spills.

    Downside: Algorithmic trading can hide the identity of large buyers and sellers to prevent speculators from guessing the overall size of the trade and getting in front of it. The speculators, in turn, use a series of baits and cancellations to test the market, looking for patterns and weaknesses. The result is a lot of complicated, high-speed, game-theoretic duels and micro-volatility, all of it in the name of hiding information.
 
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