Which type of specialized algo strategy aims to seek liquidity?

Hunter strategies are specifically designed to seek liquidity in the market. These strategies focus on identifying and executing trades that can capture liquidity that may not be easily accessible through traditional trading methods. Hunters often aim to exploit transient price differences and take advantage of participants who may not be actively seeking the most favorable trading conditions at a given time.

Market-on-close strategies are intended to execute trades at the end of the trading session, focusing on price determination rather than actively seeking liquidity throughout the trading day. Passive orders typically seek to minimize market impact by entering orders at specified prices, which may not necessarily prioritize maximizing liquidity. Investment arbitrage strategies concentrate on exploiting price discrepancies between related assets and do not inherently focus on liquidity-seeking behavior.

By targeting liquidity, hunter strategies can effectively navigate complex market conditions and are particularly valuable in environments where access to liquidity may be variable or restricted.