A STUDY ON LOW LATENCY TRADING IN INDIAN STOCK MARKETS

The development of computer technology and the Internet is perhaps the most important progress that shape and characterise the 21st century. The proliferation of computer-based and algorithmic trading breed a new category of traders who trade purely based on technical, probabilities, and statistics without the human emotional aspect. In addition, these machines trade ultra-fast in seconds or even milliseconds buying and selling based on proprietary algos. In this paper we discuss the Low Latency trading how it is impact on Indian Stock markets, specially what are merits and demerits of this trading (HFT) is positively correlated with stock price volatility after controlling for the volatility of a stock's fundamentals and other volatility drivers.