SEBI is all set to tighten algorithm trading rules to minimise instances of flash crashes. Algorithm trading in financial markets refers to transaction orders generated by using advanced mathematical models that involves automated execution of trade.

• This is a more mechanised mode of trading based on computer software and algorithms.
• They give undue advantage to its users over slow manual trading by involvement of humans.
• Algorithmic trading is a hot topic under debate across the world with factions supporting it as well as opposing it.

Flash crashes: Flash crashes is the phenomenon in which there is rapid decline in the price of one or more commodities or securities caused by algorithmic trading.