Algorithmic trading refers to the process of using computer software to buy and sell securities (both stocks and ETFs) on an exchange, without a human trader controlling the transaction. It is used by institutional investors, hedge funds, broker-dealers, market makers, best p2p file sharing program and automated trading programs.
Algorithmic traders execute thousands of trades per second, and some firms have hundreds of thousands of users trading on behalf of a single institution.
Benefits of algorithmic trading include increased efficiency, reduced transaction costs, and risk management.
Algorithmic trading is known as “high-frequency trading” (HFT), and the term has become popular through its association with high-speed stock trading. However, algorithmic trading is a distinct financial instrument class, and is not an HFT technique in and of itself.