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ARTICLE · 20 FEBRUARY 2023

Trade Talk: The Future Of Algo Trading

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Securities and Exchange Board of India (SEBI) proposed a framework for algorithmic trading by retail investors on December 09, 2021,

IndiaFinance and Banking
Sandeep Parekh
Sandeep Parekh
Parker Karia
Parker Karia
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Originally published December 22, 2021

Securities and Exchange Board of India (SEBI) proposed a framework for algorithmic (algo) trading by retail investors on December 09, 2021, seeking to address the rise in the use of Application Programming Interface (API) access allowing automation of trades. Algo trading refers to orders generated using automated execution logic. Simply put, algo trading systems monitor stock prices in real time and upon the occurrence of pre-defined criteria, initiate an order without any manual intervention.

API access, or tech jargon for a pipe which connects one system to another, is used to establish a connection between the trader and the broker in order to obtain real-time quotes and pricing data; it also enables traders to use a third-party application to place orders in the market which may or may not be based on an algorithm. Currently, algos submitted by brokers have to be approved by the stock exchange, but those which come via

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