Algorithm

An algorithm is a sequence of unambiguous instructions to obtain a required output for any legitimate input within a finite amount of time. Algorithms have a defined beginning where the input data is processed using a definite logic and executed systematically using a finite number of steps to produce an output. One can combine several short algorithms and perform tasks of varying complexities while solving problem statements.

Financial companies use algorithms in areas such as loan pricing, asset liability management, stock trading, portfolio management etc. For example, algorithmic trading deploy algorithms to make trading decisions like timing, price, and quantity in the orders.