In the US, about 70 percent of overall trading volume is generated through algorithmic trading. The overall trading volume of algorithmic trading estimated in emerging economies like India is roughly 40 percent.

So, it’s no surprise that of all the trades that happen at NSE today, more than 46 percent are placed by trading algorithms! The global algorithmic trading market is expected to grow significantly between 2018 and 2026. And that’s because cloud-based services for algorithmic trading will start to emerge in the markets

Algorithmic trading is mainly used by institutional investors and big brokerage houses to cut down on costs associated with trading. According to research, algorithmic trading is especially beneficial for large order sizes that may comprise as much as 10% of overall trading volume. Typically market makers use algorithmic trades to create liquidity.

Algorithmic trading also allows for faster and easier execution of orders, making it attractive for exchanges. In turn, this means that traders and investors can quickly book profits off small changes in price. The scalping trading strategy commonly employs algorithms because it involves rapid buying and selling of securities at small price increments.

The speed of order execution, an advantage in ordinary circumstances, can become a problem when several orders are executed simultaneously without human intervention.