Definitions for "program trading"
Related Terms:
Index arbitrage, Contracts for difference, Traded options, Traded option, Pairs trade, Underlying, At-the-money option, Basket, Conversion arbitrage, Derivatives, Arbitrage, Strike, Strike price, Hammering the market, Collar, Thin market, Active market, Long, Pairs trading, Bull spread, Narrow market, Underlying instrument, At-the-money, Protective put, Long position, After hours trading, Underlying security, Underlying asset, Options , Bear spread, Basket option, Grantor, Index option, Index options, Short, At the money, Exercise price, Out of the money, Married put, Financial market, Price spread, Basis trading, Derivative, Ratio spread, In the money option, Ratio write, Striking price, Short position, Bear put spread, Opening price
Computer-driven, automatically-executed securities trades, usually in large volumes of a set (basket) of 15 or more stocks.
A software program used to analyze stock market trends and to obtain buy and sell recommendations on a minute-by-minute basis.
Institutional buying and selling of stocks included in an index automatically triggered to take advantage of temporary price variations.
The use of computers to detect mispricing in the relationship of derivative contracts to the underlying or other contracts in order to develop arbitrage trading strategies.
a trading technique involving large blocks of stock with trades triggered by computer programs
Any of a variety of trading strategies carried out through electronic means that are executed in a preplanned sequence, usually by a computer.
Trades based on signals from computer programs. These are usually entered directly from the traders computer to the market's computer system. Program trading accounts for an increasingly larger and larger portion of all trades throughout the day. Additionally, these large trades may be hedged by an offsetting position in index futures.
Computer-triggered, simultaneous buying and selling of securities in different exchanges to take advantage of price differences in two or more markets.... read full article
Computer-based trigger points are established in which large volume trades are indicated. The technique is used by institutional investors.
Computer buying (buy program) or selling (sell program) of baskets of 15 or more stocks by index arbitrageurs, specialists, or institutional traders.
Trades based on signals from computer programs, usually entered directly from the trader's computer to the market's computer system and executed automatically.
Stock trades involving the purchase or sale of a basket including 15 or more stocks with a total market value of $1 million or more. Most program trades are executed on the New York Stock Exchange, using computerized trading systems. Index arbitrage is the most prominently reported type of program trading.
A synonym for index arbitrage, or for package trading.
A sophisticated computerized trading strategy whereby a portfolio manager attempts to earn a profit from the price spreads between a portfolio of equities similar or identical to those underlying a designated stock index, e.g. the Standard & Poor's 500 Index, and the price at which futures contracts (or their options) on the index trade in financial futures markets.
Use of a computer-driven program by arbitrageurs and institutional traders for buying and selling baskets of 15 or more stocks. The program monitors various markets and securities and gives buy and sell signals when opportunities for profits arise or when market conditions warrant the accumulation or liquidation of a position.
Institutional buying or selling of all stocks included in an index on which options and/or futures are traded to take advantage of temporary price variations.
Often is associated with derivativesm, program trading typically employs a computer program to find price differences between different markets through sophisticated price analyses. An earlier term is arbitrage, which involves buying a security on one exchange and selling on another where stocks are interlisted. Shares of several Canadian companies are listed in Toronto and New York, so currency exchange value is a factor in arbitraging prices between the two markets. Program trading takes arbitrage a step further by trying to find a profit from pricing differences between cash and futures or options markets. Program trading also can be used to change the asset mix of a portfolio.
use of sophisticated computer software by major institutions to determine trading decisions, usually involving multiple simultaneous transactions
A computerized trading system that allows for large volume securities trading.
The purchase (or sale) of a large number of stocks contained in or comprising a portfolio. Originally called "program" trading when index funds and other institutional investors began to embark on large-scale buying or selling campaigns or "programs" to invest in a manner which replicated a target stock index, the term now also commonly includes computer aided stock market buying or selling programs, portfolio insurance, and index arbitrage.
Program trading is casually defined as the use of computers in stock markets to engage in arbitrage and portfolio insurance strategies. However, the New York Stock Exchange defines the term as "a wide range of portfolio trading strategies involving the purchase or sale of 15 or more stocks having a total market value of $1 million or more" without any direct reference to the use of computers.http://www.nyse.com/glossary/1042235995760.html The word "program" can be interpreted in its earlier, more general meaning of a defined and pre-arranged sequence of steps, rather than specifically a computer program. Some program trading strategies are subject to regulatory restrictions.