Option buyers in India are shifting rapidly towards algo trading because it makes trading faster, more disciplined, and much easier to manage, especially for those who are looking for smart ways to grow their money. Algo trading, short for algorithmic trading, uses computer programs to execute trades automatically based on predefined rules.
The trend is changing how options are bought, with top brokers and new-age platforms making automation simple and accessible. In this article, let’s break down why algo trading is taking off and what it means for anyone thinking about starting option trading in India. Let’s start!
Why Option Buyers are Looking at Algo Trading
The Indian algo trading market is projected to double from USD 1.08 billion in 2024 to USD 2.61 billion by 2032 at a CAGR of 11.65%. But what is sparking this trend? Let’s discuss why option buyers are considering algo trading.
Explosive Growth of Algo Trading in India
The use of algorithms in India’s stock market is growing at a very high rate. In 2025, about 57% of equity cash trades and 70% of derivatives trades, including options, are handled by algorithms. This is a big leap from previous years, and it shows us that automation is the new normal even for small-scale and retail investors.
Technology has made it possible for anyone with a smartphone to automate trades, and many platforms are supporting this shift. Moreover, young investors now make up about 40% of new demat accounts, and they favour easy-to-use, automated trading platforms. This tells us that algo trading is the future of stock trading in India.
Faster, More Efficient, and Reliable Trading
Algo trading strategies are built to react to market changes instantly. Human traders might hesitate or second-guess, but an algorithm executes trades the moment certain conditions are met. For option buyers, speed is crucial because the price of options can change in seconds.
With algos, orders go through exactly when needed, avoiding delays and slippage that might happen manually. So you don’t miss opportunities just because someone didn’t click fast enough.
Avoiding Emotional Mistakes
Many retail traders lose money in options trading due to emotional decisions like revenge trading or chasing losses. SEBI’s own data says over 90% of retail traders lose in the options segment for this reason. Algo trading removes emotions from the process. Trades are made based on set rules, so you don’t feel panic, greed, or fear. This discipline can help option buyers stick to their strategies and avoid costly mistakes.
Democratising Complex Strategies with No-Code Platforms
Gone are the days when only tech experts or institutions could use algorithms. New no-code platforms now make it possible for you or anyone to set up automated strategies without programming knowledge.
Option buyers can try pre-built templates or tweak the pre-existing option buying trading strategies with user-friendly tools. This democratisation means more people can access smart automated trading, not just those with a background in tech.
Lower Transaction Costs, Higher Potential Returns
One reason for the use of algo trading is lower transaction costs. Algorithms can optimise order execution, reduce slippage, and sometimes place trades at better prices than manual efforts. As transaction fees go down, the potential for profit goes up.
Risk Management Gets Easier
Since a high percentage of retail traders lose money in options, better risk management is key. Algo platforms come with built-in risk controls like stop-loss orders, position sizing, and even complex hedging. For someone just starting out, algo trading means they can manage the risk better and learn how to trade without wiping out their account.
Time and Effort Saving
India’s F&O segment has hit record volumes, with reports suggesting the country accounts for as much as 81% of global F&O volume. Algo trading is letting more traders participate, since automation handles the heavy work. Even as market participation rises, you can take part without having to be glued to screens all day.
How Brokers are Making Algo Trading Simple?
In this section, let’s understand what role brokers are playing in enabling algo trading:
Trading Platforms Leading the Charge
Many trading platforms are now offering easy access to algorithmic options trading. The platforms let buyers subscribe to expert strategies, create their own using templates, backtest ideas against historical data, and deploy algorithms in real time. These tools are built for all levels of traders, from complete beginners to market professionals.
Ready-made Strategies and Backtesting
Another feature is the marketplace for strategies. Option buyers can pick algorithms designed by SEBI-registered experts or even test out their own strategies using backtesting tools. With backtesting, you can run your equity or option buying algo strategy on past data to see if it would have worked.
If your strategy passes the tests, you can use it for live trading. This is a big change as buyers no longer have to completely trust their gut; they can let data do the talking.
Comprehensive Data and Professional Tools
Platforms include extra features like integrated margin calculators, live market depth data, and tools for managing risk (like automatic stop-loss settings). These help you stay on top of what’s happening, adjust strategies quickly, and protect yourself from sudden market moves.
Conclusion
Option buyers in India are choosing algo trading for its speed, reliability, and protection from emotional mistakes. Platforms now make automation accessible for everyone, whether new to trading or an experienced investor. With rising volumes and more young people entering the market, automation isn’t just a trend; it’s how smart option buyers are trying to boost returns and manage risk.