Accumulate/Distribute Algorithm Order

An accumulate/distribute algorithm is used to implement relative orders as algorithmic orders. This order type gives investors a great deal of flexibility in deciding how they want stocks to be accumulated through a purchase.

Investors can choose whether they want their bid or sale to be relative to the price at which the security was last traded, the bid price, the ask price, the moving average, the prevailing bid price, the exponential moving average, or the volume-weighted average price.

Orders can be broken up into multiple segments which are sent to securities exchanges as individual orders. The investor can choose the sequence and timing of these individual orders, allowing multiple small orders to be sent to exchanges randomly to avoid negatively influencing rates.

See also: Algorithmic trading explained

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