Algorithmic Trading

nikhiljaco · #1 22nd September 2010, 05:46 PM

Hi

I was thinking of automating by trading.

What I was thinking is given below:

1. Analyse the current market.
2. Algorithmically generate buy/sell signals.
3. Automatically submit the trades to my broker without human intervention.

I have a web interface with the broker and the program will access the web and submit trades to the terminal.

I like to know whether this is legal or illegal in India ? If illegal can I do it both in NSE and BSE or only NSE.

Heard automated trading is allowed but does not know whether an individual like me can analyze and submit trade to my broker automatically. I was pretty confused!

Any links to SEBI or market circulars or anything is appreciated.

Thanks
Nikhil

Alchemist · #2 22nd September 2010, 07:09 PM

Algorithmic trading is allowed at Indian exchanges, but I am not sure if it's available to retail investors.

Institutions are definitely allowed to use algorithmic trading.

You broker needs to take permission of the exchange before he can offer algorithmic trading.

You will have to ask your broker about it.

Quote:

To facilitate algorithmic trading, in June 2008 National Stock Exchange of India (NSE) permitted its members to offer such decision support tools. Under the system, the orders can be placed for execution in the Capital Market segment as well as the Futures & Options segment. Members can use their own software running on any suitable hardware/software platform of their choice and hence customize the software to meet their specialised needs such as provision of on-line trade analysis, risk management tools, integration of back-office operations etc. NSE members have been permitted to offer the facility only after prior approval of the Exchange.

Source.

nikhiljaco · #3 28th September 2010, 02:43 PM

Thanks Alchemist

Any feedback on which all brokers provide algorithmic trading support for retail investors?

UniyalS · #4 16th May 2011, 09:30 PM

At present there are no brokers providing platform for retail investors, apparently some think that business model would not be profitable due to regulations by different bodies.