Program Trading

This Issue in United States

Concept of Program Trading in Futures Trading

In this context of financial law, the following is a definition of Program 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 that replicates a target stock index, the term now also commonly includes computer-aided stock market buying or selling programs, and index arbitrage.