Trading with machine: Algorithms now dominate all parts of financial mkts

Arbitrages of tiny price imperfections, and responses to news flow, such as quarterly results, are now controlled almost entirely by silicon

The data from the National Stock Exchange (NSE) shows that machines now dominate every segment. Algorithmic trading was visible in all categories, including cash equity, where the majority of traders are individuals. By the end of February, algorithms were responsible for roughly 54 per cent of cash trades by value. Cash was the only segment where, until 2023-24, humans traded the bulk of the value. In other segments like derivatives — equity, commodity, currency, and interest rate — silicon has been dominant for the best part of the decade. It is likely that trading via algorithm (algo) will accelerate further