Indian Institute of Technologi Madras Researchers are studying the impact of Algorithmic Traders (ATs) on the stock market.
This research is the first-of-its-kind to investigate the impact of Proprietary Algorithmic Traders’ (PATs’) and Buy-side Algorithmic Traders’ (BATs)’ trading on market quality and vice versa.
This has significant welfare implications for the securities market as in algorithmic trading, computer programs trade faster than human traders.
The Research focused on processes that happen when computer programs predict market order flow and take over the trading process.
This research was led by Professor. P. Krishna Prasanna, Department of Management Studies, IIT Madras and Devika Arumugam, Fulbright Fellow and a PhD Scholar, Department of Management Studies, IIT Madras. It examined the impact of ATs on the National Stock Exchange (NSE).
Professor. P. Krishna Prasanna, Department of Management Studies, IIT Madras, said, “Existing studies consider ATs as a homogenous group, which is far from reality. ATs use different algorithms based on their source of funds.”
(With inputs from IANS)
