Algorithmic Trading

(redirected from Black Box Trading)

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.
References in periodicals archive ?
Shortly they are also coming up with membership for MT4/5, Spider IRIS, Trade Station, custom black box trading systems written in Java, .
This has led former Treasury minister Lord Myners to blame Black Box trading for the increased volatility and to label the practice "corrosive".
In the margins, a few physicist-financiers are working on so-called black box trading schemes (see sidebar).