Program trades
Also called basket trades, orders requiring the execution of trades in a large number of different stocks at as near the same time as possible. Related: Block trade
Protective put buying strategy ...
Program trades
Orders requiring the execution of trades in a large number of different stocks at as near the same time as possible. Also called basket trades. Related: Block trade ...
Program trades can have different reasoning behind them. They can be put on to gain exposure to a sector, rebalance a portfolio, or even engage in index arbitrage to take advantage of short term price between the futures and the cash market.
Agency basisA means of compensating the broker of a program trade solely on the basis of commission established through bids submitted by various brokerage firms.
The most popular explanation for the 1987 crash was selling by program traders. Program trading is the use of computers to engage in arbitrage and portfolio insurance strategies.
With the direct connection and the automatic response (i.e. buy or sell order), a program trader can act more quickly than typical floor trades. But automatic trades can be flawed.
A program trade is defined by the NYSE as a basket of stocks from the S&P 500 where there are at least 15 stocks or where the value of the basket is at least $1 million. Such trades are generally automated.
A means of compensating the Broker of a program Trade using Benchmark prices for issues to be traded in determining commissions or fees.
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Basket trades
Related: Program trades.
BD form
An SEC document required of brokerage houses that outlines the firm's finances and officers.
Stock trades involving the purchase or sale of a basket including 15 or more stocks with a total market value of $1 million or more. Most program trades are executed on the New York Stock Exchange, using computerized trading systems.
There is a bullish tendency in the market whenever the Buy/Sell Ratio of program traders rises above 1,20 on a 4-week moving average.
Even with government releases, institutions and funds will be at the point of release and acting upon the news before you receive it. They will typically initiate program trades that act instantly to remove perceived inefficiencies triggered by the ...
They will place bets across all timeframes including daily so bounces can go on for days in what looks like a recovery before it crashes again. The computer program trades will go with them adding fuel to the fire.
 See also: Market, Trading, Stock, Broker, Index
  
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