Retail algo: The good, the bad and the ugly

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Editor's note: Utsav Kapoor, a 28-year old IIT graduate and resident of Chandigarh, was hit by a double whammy during the first phase of the pandemic last year. He lost his high-paying job and his bet on quick gains from the stock market went horribly wrong; his entire savings of Rs 25 lakh got wiped out on the new stock market fad of retail algorithmic trading, or retail algo.  His account and subsequent complaints to the markets regulator and exchanges were widely circulated on WhatsApp groups. They were met with equal parts outrage and ridicule. The proponents of retail algo called them blatantly false, sponsored by the big boys (read: institutional investors); the more circumspect found merit in the concerns that had been flagged.  Clearly, the blooming market trend had retail investors divided. The ones with a slightly better understanding of retail algo or those who had made money during the bull run (still on, by the way) were all praise for it and the not-so-lucky ones were looking at it with suspicious eyes.  But first things first. Retail algo allows retail …