Definition of Program trading

Program trading

Trades based on signals from computer programs, usually entered directly from the trader's
computer to the market's computer system and executed automatically.

Day trading

Refers to establishing and liquidating the same position or positions within one day's trading.

Direct stock-purchase programs

The purchase by investors of securities directly from the issuer.

Guarantor program

Under the Freddie Mac program, the aggregation by a single issuer (usually an S&L)
for the purpose of forming a qualifying pool to be issued as PCs under the Freddie Mac guarantee.

Insider trading

trading by officers, directors, major stockholders, or others who hold private inside
information allowing them to benefit from buying or selling stock.

Integer programming

Variant of linear programming whereby the solution values must be integers.

Last trading day

The final day under an exchange's rules during which trading may take place in a particular
futures or options contract. Contracts outstanding at the end of the last trading day must be settled by delivery
of underlying physical commodities or financial instruments, or by agreement for monetary settlement
depending upon futures contract specifications.

Linear programming

Technique for finding the maximum value of some equation subject to stated linear constraints.

Mathematical programming

An operations research technique that solves problems in which an optimal
value is sought subject to specified constraints. Mathematical programming models include linear
programming, quadratic programming, and dynamic programming.

Planned capital expenditure program

Capital expenditure program as outlined in the corporate financial plan.

Planned financing program

program of short-term and long-term financing as outlined in the corporate
financial plan.

Program trades

Also called basket trades, orders requiring the execution of trades in a large number of
different stocks at as near the same time as possible. Related: block trade

Tandem programs

Under Ginnie Mae, mortgage funds provided at below-market rates to residential
mortgage buyers with FHA Section 203 and 235 loans and to developers of multifamily projects with Section
236 loans initially and later with Section 221(d)(4) loans.

Trading

Buying and selling securities.

Trading costs

Costs of buying and selling marketable securities and borrowing. trading costs include
commissions, slippage, and the bid/ask spread. See: transaction costs.

Trading halt

trading of a stock, bond, option or futures contract can be halted by an exchange while news is
being broadcast about the security.

Trading paper

CDs purchased by accounts that are likely to resell them. The term is commonly used in the Euromarket.

Trading posts

The posts on the floor of a stock exchange where the specialists stand and securities are traded.

Trading range

The difference between the high and low prices traded during a period of time;
with commodities, the high/low price limit established by the exchange for a specific commodity for any one day's trading.

Zero-one integer programming

An analytical method that can be used to determine the solution to a capital
rationing problem.

Planning, programming and budgeting system (PPBS)

A method of budgeting in which budgets are allocated to projects or programmes rather than to responsibility centres.

integer programming

a mathematical programming technique in which all solutions for variables must be restricted to whole numbers

linear programming

a method of mathematical programming used to solve a problem that involves an objective function and multiple limiting factors or constraints long-term variable cost a cost that was traditionally viewed as a fixed cost

mathematical programming

a variety of techniques used
to allocate limited resources among activities to achieve a
specific objective

program budgeting

an approach to budgeting that relates
resource inputs to service outputs

Entitlement Program

A program, such as social security, under which everyone meeting the eligibility requirements is entitled to receive benefits from the program, so that costs are not known in advance.

Detailed Program

Design In software development, a detailed step-by-step plan for completing the software.

Trading Security

A debt or equity security bought and held for sale in the near term to generate income on short-term price changes.

Upstairs market

A network of trading desks for the major brokerage firms and institutional investors that
communicate with each other by means of electronic display systems and telephones to facilitate block trades
and program trades.

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