Prospect of Algorithmic Trading in India – Reshaping the Stock Field

Algorithmic Trading uses automated pre-programmed trading conditionsexchangeto execute orders in real-time in stock . Since 2008, algorithmic trading has gained prominence in Indian markets and they are efficiently utilising the industry inefficiencies for their own benefit.

In fact, Automation is the natural passage for any tech in tomorrow. Since investment is a process – it will translate better into Algorithmic Trading. Despite Algointrading being in incipient stage India, it comprises to nearly 50 percent of the overall trading. Actually, The amount is highly low, as compared to the US and the UK markets where more than 90 percent of the trades (at much higher volumes) are done using algorithms.

The Indian nicheprovides a decently good opportunity for Algo traders with its

• smart order routing system

• -colocation facilities and sophisticated technology at both the major exchanges

Indeed, • stockthatexchanges are well-established and liquid

in modern times The Indian market is taking on the growing trend of and demand of HFT and Algorithmic Trading by educating its members about the technology. It is also helping them develop skill setstherequired to aid them understand the complications in trading.

For the Indian Algo trading scenario, Mr Richard Gula says, “Expect high sophisticated Algo development, but likely focused on a relatively small number of liquidstocks. Liquidity will define the triumph of the effort. Regulatory issues couldmushroom ”. Mr Gula develops and deploys databases on equities, futures, ETFs, and has built, managed and used financial databases since 1975.

Mr Gula furthershouldstates that the Indian industry should be approached with a separate strategy that consist of:

• Identifying driving right stocks the the field

• field and understand entire Indian Study

Actually, • Understand the ways of previous traders and extract information

As you may know, • Develop specific niche rules to drive the algorithms on the macro scale

• Create tailor-made algorithms per in modern times each stock for the frequently traded stocks

Rate is of the essence where HFT executes trades in sub-milliseconds – traders will require algorithms and solutions that offer low latency and faster computation.

With the further evolving of the niche each day, statistical models.require constant tweaking It is already apparent that algorithmic trading is used by the investors to customize algorithms and automate their trading strategies to manipulate their objectives. There is also the apply of artificialtointelligence solutions with the capacity adapt to changing markets. These systems will be able to apply news, satellite images, social media feeds, etc. to predict market .trends

Algo trading is quickly becoming the tomorrow of the markets, with its minimal cost and danger in executing an order. India can easily launch up to foreign investors they would go for Algo tradingwayin a big . However, the introduction of Algo trading in Indian stock markets – one of the most liquid start markets in the world – is looking to a betterment of the trading niche.