{"id":29988,"date":"2025-06-10T07:45:57","date_gmt":"2025-06-10T02:15:57","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=29988"},"modified":"2025-06-10T16:35:12","modified_gmt":"2025-06-10T11:05:12","slug":"algorithmic-trading","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/algorithmic-trading\/","title":{"rendered":"Algorithmic Trading"},"content":{"rendered":"<h2>Algorithmic Trading Latest News<\/h2>\n<p>The Securities and Exchange Board of India (SEBI) recently announced a settlement scheme for stockbrokers currently under regulatory scrutiny for collaborating with unregulated algorithmic (algo) trading platforms.<\/p>\n<h2>About Algorithmic Trading<\/h2>\n<ul>\n<li>Algorithmic trading (also called\u00a0<strong>automated trading, black-box trading<\/strong>, or\u00a0<strong>algo-trading<\/strong>)\u00a0<strong>uses a computer program\u00a0<\/strong>that\u00a0<strong>follows a defined set of instructions<\/strong>\u00a0(an algorithm)\u00a0<strong>to place a trade.\u00a0<\/strong><\/li>\n<li>It combines computer programming and financial markets to\u00a0<strong>execute trades at precise moments.<\/strong><\/li>\n<li>The trade, in theory,\u00a0<strong>can generate profits at a speed and frequency\u00a0<\/strong>that is impossible for a human trader.<\/li>\n<li>The defined sets of\u00a0<strong>instructions are based on timing, price, quantity,\u00a0<\/strong>or any\u00a0<strong>mathematical model.\u00a0<\/strong><\/li>\n<li>Algo trading is already\u00a0<strong>prevalent in India<\/strong>\u00a0among both institutional and retail investors.<\/li>\n<li>Apart from profit opportunities for the trader, algo-trading\u00a0<strong>renders markets more liquid\u00a0<\/strong>and<strong>\u00a0trading more systematic<\/strong>\u00a0by\u00a0<strong>ruling out the impact of human emotions<\/strong>\u00a0on trading activities.<\/li>\n<li><strong>Black Swan Events:<\/strong>\n<ul>\n<li>Algorithmic trading\u00a0<strong>relies on historical data<\/strong>\u00a0and\u00a0<strong>mathematical models to predict\u00a0<\/strong>future\u00a0<strong>market movements.\u00a0<\/strong><\/li>\n<li>However,<strong>\u00a0unforeseen market disruptions,<\/strong>\u00a0known as\u00a0<strong>black swan events,<\/strong>\u00a0can occur, which\u00a0<strong>can result inlosses for algorithmic traders.<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Algorithmic Trading FAQs<\/h2>\n<p><strong>Q1<\/strong>. What is algorithmic trading primarily based on?<\/p>\n<p><strong>Ans<\/strong>. A set of defined instructions or algorithms.<\/p>\n<p><strong>Q2<\/strong>. What is another term commonly used for algorithmic trading?<\/p>\n<p><strong>Ans<\/strong>. Black-box trading<\/p>\n<p><strong>Q3<\/strong>. In the context of algorithmic trading, what are &#8220;black swan events&#8221;?<\/p>\n<p><strong>Ans<\/strong>. Sudden and unpredictable market disruptions.<\/p>\n<p><strong>Source<\/strong>:\u00a0<a href=\"https:\/\/www.thehindubusinessline.com\/markets\/sebi-to-offer-settlement-window-for-stock-brokers-in-algo-trading-violation\/article69675487.ece\" target=\"_blank\" rel=\"nofollow noopener\">HB<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Algorithmic Trading is a method of executing trading orders by providing a predefined set of rules to a computer program.<\/p>\n","protected":false},"author":5,"featured_media":29989,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[782,21,22,23],"class_list":{"0":"post-29988","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"tag-algorithmic-trading","9":"tag-prelims-pointers","10":"tag-upsc-current-affairs","11":"tag-upsc-prelims-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/29988","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=29988"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/29988\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/29989"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=29988"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=29988"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=29988"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}