A Study on Algorithmic Trading Practices in India

Abstract

Algorithmic trading has emerged as one of the most significant technological innovations in modern financial markets by enabling automated trade execution through predefined computer algorithms. This study examines algorithmic trading practices in India by analysing their adoption, operational efficiency, market liquidity, execution speed, risk management, and regulatory framework. Primary data were collected from investors, traders, finance professionals, and market participants using a structured questionnaire, while secondary data were obtained from books, research journals, SEBI publications, NSE and BSE reports, and financial databases. The findings indicate that algorithmic trading significantly improves execution speed, trading accuracy, market liquidity, price discovery, and operational efficiency while reducing human errors and transaction costs. The study concludes that continuous technological innovation, robust regulatory oversight, and effective risk management are essential for the sustainable growth of algorithmic trading in the Indian capital market.