What do passive orders in specialized algo strategies primarily aim for?

Passive orders in specialized algorithmic strategies are designed to execute trades without urgency, reflecting a trading approach that does not seek to capitalize on immediate price movements or take on risk associated with quick market changes. This is particularly relevant in various market conditions where traders aim to enter or exit positions over a longer time frame, thereby reducing the likelihood of impacting the market price with large trades.

The rationale for opting for passive orders often emphasizes liquidity and market depth, as these strategies allow traders to take advantage of better prices over time rather than trying to secure the best possible price at a single moment. By prioritizing the execution of trades more leisurely, traders can potentially benefit from less volatile price movements, eliminating the pressure of immediate execution that can sometimes lead to unfavorable trade conditions.

Additionally, while transaction speed, execution costs, or targeting high volatility opportunities are considerations in trading strategies, they do not align with the fundamental purpose of passive orders. Such orders instead focus on stable and non-urgent execution, aligning with overall portfolio strategies that favor long-term investment goals.