The current global market sell-off was driven by computers and not traders' fears over market indicators, a strategist told CNBC on Tuesday.
More and more market transactions are made through algorithm trading — also known as algo trading, it uses advanced mathematical models to make high-speed trading decisions. Therefore, the equity sell-off seen since Friday was greatly driven by technical mechanisms, Salman Ahmed, chief investment strategist at Lombard Odier, said.
"The rise of algorithm-based trading means that there are in these algorithms some levels which trigger sell-off, i.e. sell orders," Ahmed said.
"Yes, I can argue that we needed some kind of correction, given what has happened over the last few months. But the ferociousness of the intra-day sell-off is driven by these pre-set sell orders, which come programmed in these algorithms automatically."