Share of volumes through computer-generated algorithmic orders rising fast, but smaller players still trying to catch up in technology stakes

An increasing proportion of the volumes driving the Sensex rise has come from algorithmic trading. Automated trading strategies have risen to nearly a fifth of the overall market turnover, according to exchange data. Volumes from the segment crossed Rs 32,000 crore in April this year, according to an analysis by Business Standard.

Sector officials say the increasing investor preference for algorithmic or algo trades has been brought about by the high levels of optimism in the market.

“The overall sentiment has improved and volumes have gone up. With that, the level of interest among quant traders has also moved up, which has resulted in increasing algo-trading activity,” said Vinay Menon, managing director – equity capital and derivatives markets, JPMorgan.

“The demand from institutions and FIIs for routing trades through the direct-market-access route and algo logic has been on the rise. Considering the current market performance and the improvement in the market sentiment, the number of clients opting for algo trading is expected to go up further,” said Yagnesh Parikh, chief technology officer, ICICI Securities.

Algorithm-based trading refers to the practice of computer-generated orders using mathematical models for taking transaction decisions in the securities market.

For more visit: Business Standard

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