> minimally affect the price of said stock by the sale. [snip] I'm not sure I seed (sic) the point of the latter This generally affects sales involving large

> minimally affect the price of said stock by the sale. [snip] I'm not sure I seed (sic) the point of the latter This generally affects sales involving large quantities. Say you want to sell 10000 of IBM. The current order book at the exchange looks like: 165.55 - 10 165.54 - 20 165.53 - 200 165.52 - 500 165.51 - 100 As you can see, the current market is 165.55 and you decide to place a SELL order for your 10000 IBM. You have two options - place a limit order or a market order. Market Order: As soon as you place your order, you are going to sweep the order book above. End of those 5 transactions, the market has moved to 165.51 while you've only liquidated 830 of your 10000! Worse, people are noticing a lot of sell activity so the folks who wanted to buy start placing bids at lower & lower prices. By the time you liquidate all your 10000 stocks, the average price you end up getting would be 165 or 164 or lower! You've moved the market by virtue of your sale & made less money as a result. Limit Order: If you place a limit order for SELL 10000@165.55, then you sell the first 10 to the current highest bid. After that, everyone knows there's a seller looking to offload 10000 units. So they lower their bids. You are worse off! By now, I hope it is clear why you should care about not moving the market by your sale. The way to solve this problem is to sell in small chunks periodically in ways that does not signal to the market what your actual quantity is. As you can imagine, computers are pretty good at doing this kind of grunt work. Hence Algorithmic trading :-) Specific examples would be VWAP, TWAP, etc. Just Google for them. PS: this has nothing to do with HFT algos.