A trading algorithm that is used by electronic traders to execute orders at a constant participation rate in sync with actual market activity for both illiquid and liquid securities. In order to reduce average cost, the algorithm applies a user-specified percentage rate of the market volume (say 10%, 20%, etc). It also attempts to opportunistically lag the target rate to get a better price, using proprietary short-term indicators in the process. The algorithm also avails advanced profiling techniques to prevent sharp increases in participation price and watchfully monitors movement to pause exceptional activity to limit market impact.

Typically, the parameters of a participate algorithm are start time, end time, maximum percentage volume, minimum percentage volume, limit, would MAQ, would limit, and share count venue. For example, limit, minimum and maximum participation rates can be manipulated to minimize market impact and avert unwanted fills. Likewise, would levels can be manipulated in order to terminate the order should the market move in the desired direction.