Algorithmic trading, or algo trading, is the use of computer programs to automatically place and manage trades based on predefined rules. These rules can be based on technical indicators, price movements, statistical models, or even news events. Once programmed, the algorithm can monitor markets in real-time and execute orders far faster than a human could. This helps traders remove emotions, improve consistency, and trade with precision at scale. Algo trading is widely used by hedge funds, proprietary firms, and even retail traders through platforms and APIs.

Low latency in trading means minimizing the time it takes to receive market data, process it, and send an order to the exchange. In fast-moving markets, even a 1-millisecond delay can mean missing out on a favorable price or execution. For HFT firms, low latency is the difference between being first in the queue or getting filled last — which directly impacts profitability. Whether it's capturing arbitrage, reacting to news, or placing market-making quotes, speed is a competitive edge.