In an unprecedented approval from the United States Securities and Exchange Commission (SEC), Nasdaq, a global technology company, has been given the green light to employ artificial intelligence (AI) in the execution of trade orders. The novel system in question is the dynamic midpoint extended life order (M-ELO) and represents a significant leap from automation to AI in the realm of financial markets.
The traditional form of automation has been commonplace in the digital currency markets for some time and involves executing specific trade pairs when certain market pricing thresholds are reached. However, this revolutionary AI-driven order will use real-time reinforcement learning AI to handle orders. This technology presents an exciting advancement where software instructions are empowered to recalibrate themselves in reaction to current market conditions.
This improvement carries the potential to substantially quicken the pace of orders made through the system. It uses an impressive 140+ data points analyzed every 30 seconds to discern the optimum holding period before a trade executes. The technology’s decision-making process is dynamic, continuously updating based on market conditions.
On the flip side, there may be sceptics who question the reliability of the system, as they prefer tried-and-true automated systems over novelties. There could also be concerns about the potential impact of this technology on human control over financial transactions, and there may be possible regulatory hurdles for the widespread implementation of this sort of artificial intelligence in financial exchanges.
In the end, the approval of Nasdaq’s request brings the future of financial markets closer than ever. The emphasis on incorporating AI stands to enable substantial advancements in efficiency and speed of trade execution. But, just as the case with any technology, the key lies in being mindful of potential risks and ensuring proper checks and balances are in place to guarantee the integrity of the whole system. A close watch shall be kept on how this new technology unfolds and impacts the financial markets landscape, with attention paid to the interplay between AI, human control, and regulations.
Source: Cointelegraph
