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Algorithmic Trading
(redirected from Black Box Trading)

   Also found in: Wikipedia 0.01 sec.
Algorithmic Trading
A computerized trading system that institutional investors use to make large transactions in securities while affecting their prices as little as possible. Algorithmic trading uses complicated mathematical formulas to identify the ideal times to buy and sell securities in large batches. Usually, algorithmic trading involves dividing trading a large number of securities as smaller groups so as not to cause panic buying or panic selling. Algorithmic trading contrasts with program trading, which is also a computerized system but does not attempt to minimize price changes. Algorithmic trading is also called black box trading.


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Getting technical Through many years of experience we’ve learned to be highly suspicious of charts and black box trading systems.
Despite the global financial crisis, the fundamental drivers for the adoption of low latency, namely the fragmentation of liquidity across multiple venues and the inexorable advance of black box trading, continue to exist," said Rik Turner, a senior analyst of financial services technology at Datamonitor.
In the margins, a few physicist-financiers are working on so-called black box trading schemes (see sidebar).
 
 
 
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