Automated trading system
subset of algorithmic trading, uses a computer program to create buy and sell orders and automatically submits the orders to a market center or exchange
An automated trading system (ATS), a subset of algorithmic trading, uses a computer program to create buy and sell orders and automatically submits the orders to a market center or exchange. The computer program will automatically generate orders based on predefined set of rules using a trading strategy which is based on technical analysis, advanced statistical and mathematical computations or input from other electronic sources. Such systems are often used to implement algorithmic trading strategies that typically operate at high speed and frequency.
These automated trading systems are mostly employed by investment banks or hedge funds, but are also available to private investors using simple online tools. An estimated 70% to 80% of all market transactions are carried out through automated trading software, in contrast to manual trades.
Automated trading systems are often used with electronic trading in automated market centers, including electronic communication networks, "dark pools", and automated exchanges. Automated trading systems and electronic trading platforms can execute repetitive tasks at speeds orders of magnitude greater than any human equivalent. Traditional risk controls and safeguards that relied on human judgment are not appropriate for automated trading and this has caused issues such as the 2010 Flash Crash. New controls such as trading curbs or 'circuit breakers' have been put in place in some electronic markets to deal with automated trading systems.
Mechanism
The automated trading system determines whether an order should be submitted based on, for example, the current market price of an option and theoretical buy and sell prices.
“Automated trading system” enters the record as subset of algorithmic trading, uses a computer program to create buy and sell orders and automatically submits the orders to a market center or exchange. Crown Archives preserves that source wording while asking what Automated, trading and system can confirm, complicate or overturn.
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This entry incorporates text from “Automated trading system” on English Wikipedia. Contributors are listed in the page history. Text is available under the Creative Commons Attribution-ShareAlike 4.0 License. Selected authority identifiers and statements are retrieved from Wikidata under CC0; their references and qualifiers remain part of the verification path.