Q. Which one of the following is correct regarding ‘Algorithmic trading’?

[A] It refers to the use of computer programs and algorithms to execute trades at high speed and volume based on pre-defined criteria.

[B] It is a government-mandated system for regulating stock market transactions.

[C] It executes trades randomly to take advantage of unpredictable market fluctuations.

[D] It is a trading strategy that exclusively involves the use of cryptocurrencies.

Answer: A
Notes:

Explanation – Algorithmic trading, also known as algo trading or automated trading, involves using computer programs and algorithms to execute trades at high speed and volume. These programs follow pre-defined criteria such as price, volume, timing, or other market conditions, ensuring efficiency and precision.

Source: Forum IAS

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