Execution Algorithms
Execution algorithms are systematic methods used in computer science and finance to carry out tasks or processes efficiently. They determine how a specific operation, such as trading a stock or processing data, is performed. These algorithms help optimize performance by minimizing time and resource usage while ensuring accuracy.
In the context of trading, execution algorithms, like VWAP (Volume Weighted Average Price) and TWAP (Time Weighted Average Price), are designed to execute orders at the best possible prices. They analyze market conditions and adjust strategies in real-time to achieve desired outcomes, reducing the impact of large trades on market prices.