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Algo trading by retail investors: Trust back-tested data, not hype

Invest a small amount, observe performance, then scale up gradually

The Securities and Exchange Board of India (Sebi) has proposed measures to regulate algorithmic (algo) trading by retail investors, introducing new checks and balances for stock brokers and exchanges. Currently, algo trading is dominated by instituti
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Reactions to the new norms are divided. Some believe they will improve transparency and security

Himali Patel

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The Securities and Exchange Board of India’s (Sebi) new norms for retail participation in algorithmic (algo) trading will take effect from August 1. Investors looking to adopt this automated approach must first assess the pros, cons and risks of this trading method.
 
Mixed views 
Reactions to the new norms are divided. Some believe they will improve transparency and security. “These norms promote accountability and reduce risk for retail investors,” says Rajesh Ganesh, founder and chief executive officer, TripleInt Trading Systems.
 
Others fear increased entry barriers. “The static IP requirement (a stable internet address) is impractical, especially for traders who use