Algorithmic trading
Algorithmic trading
Context:
A major cyber-enabled investment fraud case recently came to light in Delhi, where fraudsters allegedly cheated more than 700 people of over ₹100 crore through a fake “algorithmic trading” investment platform.
Facts for Prelims
Algorithmic trading (Algo Trading) refers to automated buying and selling of financial securities using computer programs and predefined algorithms.
It uses mathematical models, market data, AI systems, high-frequency execution, and automated decision-making.
How Fraudsters Misused This Concept: The accused exploited:
public fascination with AI,
limited financial literacy,
aspiration for quick wealth.
They falsely claimed:
guaranteed returns,
AI-based automated profits,
“secret trading formulas.