What is Algorithmic Trading?
Algorithmic Trading The automated execution of trading orders by computer algorithms based on pre-programmed criteria, designed to optimize execution cost, speed, and timing. Used by institutional investors and regulated by MiFID II, SEC, and CFA Institute standards.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Algorithmic Trading” Used in Practice?
Algorithmic trading systems can execute thousands of orders per second, enabling portfolio managers to efficiently access liquidity and minimize market impact.
Certification Exam Relevance
Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Algorithmic Trading?
The automated execution of trading orders by computer algorithms based on pre-programmed criteria, designed to optimize execution cost, speed, and timing. Used by institutional investors and regulated by MiFID II, SEC, and CFA Institute standards.
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