The simultaneous purchase and sale of many different stocks, or of stocks and related futures contracts, with the use of a computer program to exploit price differences in different markets.
Algorithms are a step up from the more familiar program trading, which institutions for years have used to buy or sell bundles of 15 or more stocks worth a combined $1 million.
The SEC has already moved, in conjunction with the New York Stock Exchange, to close down computer program trading on the market, a trade related to stock index futures.
In the most recent week, 45.5 percent of the volume was program trading.
Other tactics involve deep leveraging, programme trading, swaps, arbitrage and derivatives that retail investors find difficult to master.
Think of program trading on Wall Street, for example.