“Artificial intelligence is to trading what fire was to the cavemen.” That’s how one industry player described the impact of a disruptive technology on a staid industry.
In other (less creative) words, AI is a game changer for the stock market.
While humans remain a big part of the trading equation, AI plays an increasingly significant role. According to a recent study by U.K. research firm Coalition, electronic trades account for almost 45 percent of revenues in cash equities trading. And while hedge funds are more reluctant when it comes to automation, many of them use AI-powered analysis to get investment ideas and build portfolios.
AI STOCK TRADING
AI is shaping the future of stock trading. Using AI, robo-advisers analyze millions of data points and execute trades at the optimal price, analysts forecast markets with greater accuracy and trading firms efficiently mitigate risk to provide for higher returns.
“Machine learning is evolving at an even quicker pace and financial institutions are one of the first adaptors,” Anthony Antenucci, vice president of global business development at Intelenet Global Services, recently said.
When Wall Street statisticians realized they could apply AI to many aspects of finance, including investment trading applications, he explained, “they could effectively crunch millions upon millions of data points in real time and capture information that current statistical models couldn’t.”
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