Program Trading

AAA

DEFINITION of 'Program Trading'

Computerized trading used primarily by institutional investors typically for large-volume trades. Orders from the trader's computer are entered directly into the market's computer system and executed automatically.

INVESTOPEDIA EXPLAINS 'Program Trading'

Program trades are usually executed if index prices sink or rise to a certain level. This tends to create very volatile situations. As a result, there are restrictions on times when program trading can be used.

RELATED TERMS
  1. Algorithm

    A set of rules for accomplishing a task in a certain number of ...
  2. Index

    A statistical measure of change in an economy or a securities ...
  3. Fuzzy Logic

    A mathematical logic that attempts to solve problems by assigning ...
  4. Basket Trade

    An order to buy or sell a group of securities simultaneously. ...
  5. Neural Network

    A series of algorithms that attempt to identify underlying relationships ...
  6. Institutional Investor

    A non-bank person or organization that trades securities in large ...
RELATED FAQS
  1. What is the downtick-uptick rule on the NYSE?

    To ensure orderly markets, the New York Stock Exchange (NYSE) has a set of restrictions that it can implement when experiencing ... Read Full Answer >>
Related Articles
  1. Brokers

    Uncovering The Securities Firm

    Learn about the various departments of a securities firm and the professionals who make it work.
  2. Active Trading

    Finding The Right Trading Coach

    If you're looking to master the art of trading, you may think you need an expert trader. What you may really need is an expert teacher.
  3. Active Trading Fundamentals

    The Power Of Program Trades

    Learn how programs make up a significant portion of the volume traded each day.
  4. Fundamental Analysis

    From Beads To Binary: The History Of Computing

    Investing today couldn't happen without the inventions of yesterday. Learn more here.
  5. Retirement

    Electronic Trading Tutorial

    Learn about the systems that run the market. Topics include market makers, specialists, SuperDOT, ECNs, SOES, Level I, II, and III Access, and more.
  6. Stock Analysis

    How Can Broadcom Grow Its Connectivity Business?

    At a recent investor conference, Broadcom CEO Scott McGregor talked about the company's wireless connectivity business.
  7. Stock Analysis

    Does NVIDIA Have Revenue Opportunities With Tegra?

    Investors following NVIDIA know that one of the most buzzed-about parts of the company has been its Tegra mobile processors.
  8. Stock Analysis

    Will MannKind Finally Reach A Solid Ground?

    MannKind Corporation has been plagued by setbacks, but this year has turned into a pivotal one thanks to the launch of its long-awaited inhaled insulin. 
  9. Stock Analysis

    Is Baidu Fighting To Keep Its Leading Position?

    Baidu is still struggling to figure out how to make the most of the mobile revolution without sacrificing its leading position in the desktop business.
  10. Trading Strategies

    Know How To Manage Gaps On Your Trading Strategy

    Gaps generate profitable strategies right after they print, as well as during retracements that test those levels, often months or years later.

You May Also Like

Hot Definitions
  1. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  2. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  3. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  4. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  5. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
Trading Center