Algorithmic Trading has been kept a tightly held secret for too long. The recent situationhas been that everyone does it, yet no one wants to talk about what they are doing.
Outside this secretive world of algorithmic traders, very few noticed the facts mentioned in a 2016 SEBI Discussion Paperon Algorithmic Trading. The regulatory watchdog mentioned that more than 80% orders placed on exchanges are generated by algorithms. The contribution of algorithms in the total numbers of trades was approximately 40%.
The recent results of a survey done by an independent private company, AlgoJi are even more surprising. As per that survey, algorithms contribute approximately 90% of all orders submitted, and 75% of all trades executed on exchanges. The survey details many facts about technology and strategies used by traders.
Saurabh Lohiya, the co-founder of AlgoJi explains these results. “An intraday algo trader sends more orders in a single day, then a passive investor may do in his lifetime. Even though the algo traders may be small in number, they dominate all the trading volumes and price action in markets. Also, even a lot of manual traders use algorithms to generate Buy and Sell signals. Everyone is making use of technological advancements for less dependence on hunches and emotions.”
The secrecy in algorithmic trading is finally sinking away in the limelight of conferences and seminars. Industry bodies such as Commodity Participants Association of India are supporting AlgoJi’s conferences. The next such conference will be organized at Constitution Club of India on 8th December, 2018.CaClubIndia is a media partner in this conference to spread awareness on latest technological advancements in the field of investment management through algorithms.
CAclubindia
