Example: there are algorithmic strategies designed to make large trades.
Let's say an institution wants to buy 10K shares of a thinly traded stock (lets say, 100K shares per day). Placing a single order for 10K shares will send a signal to the market that someone wants to buy, and other traders will see it.
There are special algorithms designed to purchase the specified number of shares without making too much of a market impact. For example, in this case, the strategy would send 100 share orders rather than presenting the full 10K interest at once.
for the googlers: there are all kinds of technical terms like implementation shortfall to give more info
Let's say an institution wants to buy 10K shares of a thinly traded stock (lets say, 100K shares per day). Placing a single order for 10K shares will send a signal to the market that someone wants to buy, and other traders will see it.
There are special algorithms designed to purchase the specified number of shares without making too much of a market impact. For example, in this case, the strategy would send 100 share orders rather than presenting the full 10K interest at once.
for the googlers: there are all kinds of technical terms like implementation shortfall to give more info