Automated trading system

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An automated trading system (ATS) is a computer trading program that automatically submits trades to an exchange. Automated trading systems are often used with other forms of electronic trading, such as electronic communicationoinitons networks, "dark pools" and algorithmic trading.[1] As of the year 2010 more than 70% of the stock shares traded on the NYSE and NASDAQ are generated from automated trading systems. [citation needed] They are designed to trade stocks, futures and forex based on a predefined set of rules which determine when to enter a trade, when to exit it and how much to invest in it.


Trading system designers / programmers often test their automated trading systems on historical or current market data in order to determine whether the underlying algorithm guiding the system is profitable or not. Backtesting software are special trading platforms which enable trading system designer to develop and test their trading systems on historical market data while aiming to produce optimal historical results. Program trading is one form of automated trading system.[2]

See also

Notes

  1. ↑ Lemke and Lins, Soft Dollars and Other Trading Activities, §§2:25 - 2:29 (Thomson West, 2013-2014 ed.).
  2. ↑ Lemke and Lins, Soft Dollars and Other Trading Activities, §2:35 (Thomson West, 2013-2014 ed.).


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