Algo City

Example Uses of Algorithmic Trading

Arbitrage

Some stocks are traded on multiple exchanges in one or more countries. If a computer program sees that a stock’s sell price on one exchange is lower than the stock’s buy price on another exchange (after adjustment for exchange rates and transaction costs), the program can buy the stock at the exchange with the low sell price and sell at the exchange with the high buy price, thus making a small profit. This process is called “arbitrage”.       <<< Previous      Next >>>