AI Jargon Buster
AI news and the language around it, simplified.
What is Algorithmic Trading?
Algorithmic trading is the use of computer programs to execute financial trades at speeds and frequencies that are impossible for a human. The system follows a set of pre-defined instructions, or algorithms, to buy or sell assets based on specific market conditions like price, timing, or volume. By removing human emotion and manual error from the process, these systems can process vast amounts of data and execute orders in fractions of a second. This approach allows firms to capitalize on tiny price differences that appear and disappear almost instantly across global markets.
Why this matters to you
It allows financial institutions to react to market changes in milliseconds, which can influence stock prices and your personal investment returns. For professionals, understanding this helps explain why markets sometimes move in ways that seem disconnected from traditional news or human decision-making processes.
How you might hear this
The firm switched to algorithmic trading to manage their portfolio with more consistency during high-volatility periods.
AI Jargon Buster
Search any AI term, explained in plain English.
Type a term below and search. You will be taken straight to the tool.
Related terms
See how your CV performs against the ATS algorithms that screen candidates before a human ever reads your application.
Try the CV Optimiser →How AI job displacement actually works, what it means for your career, and what to do about it. Written by someone who has been in recruitment for 25 years.
When the Ground Shifts →