Arbitrage Trading Program - ATP

Ever run into a pricing mistake at a grocery store? You bought your favorite name brand item super cheap because the store made a mistake. Later in the week, you notice the same item at another store for a different, and higher price.

In the world of finance, this is what arbitrage trading programs do. Only with 10,000 times more configurations. Think: bundles of sugar, wheat and frozen concentrated OJ packaged against call options on natural gas which correlates prices with these foodstuffs...Algo programs keeps an eye on the market to find assets that are mistakenly priced or priced differently in different places.

Arbs then profit by buying at the lower price and selling at the higher price at the same time. Speed is important because these mistakes are picked up VERY quickly. The computer is much faster than you are (obviously), thus giving you the chance to take advantage of opportunities that will be gone in a matter of moments.