How Algorithmic Trading Shapes ETF Prices: 7 Key Impacts Investors Must Understand
The financial markets have undergone a profound transformation, driven largely by the advent and proliferation of algorithmic trading. This sophisticated approach involves the use of computer algorithms—sets of predefined rules—to execute trades with minimal market impact while ensuring optimal execution through automation.
Algorithmic trading processes millions of data points per second, executing trades in milliseconds, far surpassing human capabilities. Its influence is particularly pronounced in the ETF market, where efficiency and precision are paramount.