India is warming up to share-trading by computers. The technology has had a chequered past. Remember 1987?
October 19, 1987, later known as Black Monday, saw the biggest single-day crash on Wall Street. The general theory is this happened because computers around the world, programmed to execute trades automatically, reacted to pre-set signals and executed sell orders en masse. And a number of puritans who valued human judgements over machines in the financial market swore off computers.
More than two decades later, algorithmic trading (also known as program trading) is making inroads into India. A number of brokerages are launching services to enable machine execution of orders.(This story appears in the 31 July, 2009 issue of Forbes India. To visit our Archives, click here.)