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, 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), best p2p filesharing 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.