SEBI announced new checks in Algorithmic trading

The Stock market regulator SEBI has announced new checks in algorithmic trading or high-frequency trading, they issued new set of guidelines to avoid the potential risk which can be caused by automated Software’s used by stock brokers to do trading in exchanges. Stock exchanges have to make sure that all algorithmic orders (Automated orders by software) are directed through broker servers located in India and the suitable threat control mechanism to address the risk or issues coming from algorithmic orders during the trades.

What is meant by algorithmic trading?
Nowadays all the stock market firms started using the latest software’s to place an order and those software’s are getting enhanced periodically to speed up the transaction. It used mathematical models and powerful computers to order trades at ultra fast speeds when compared to manually punched trades, these trades are faster which will benefit from quick change in prices during the transaction, This is also called as high-frequency trading.