How AI is Being Applied to the Stock Market
Hello and welcome to the Today podcast I'm your House Kathleen Mulch. I'm your host Ronald Schmeltzer. So today we're going to spend our. podcast talking about our use case series where we look at the adoption, I in various different industries and today, we're GonNa take a look at the stock market and the training on. Amazing. Other things like the stock market commodities and futures bonds and Blah, Blah Blah. So we talk about stark record. We're talking about the trading floor in general, but basically the stock market and it is the dream. It is the long dream of anybody WHO's in the financial trading industry to find the magical algorithm magical model that can predict the future of the market because if you can do that you basically when everything in life. Right because. If I can tell you the price of Amazon or apple stock or oil, or whatever tomorrow, I can lock in my buy low sell high sell high by. Then you went and you know what? There are very smart PhD mathematicians out there right now, who are working on machine learning models to predict the markets, right? So we should talk about. I think ever since there's been a market, there's been someone trying to figure it out in one way or another. Just. Technology helps but still hasn't cracked it. So like Ron said, we wanted to spend some time today talking about a and how it's impacting the overall stock market trading floor and that whole area recently adoption of AI in financial trading has seen an uptick and more people are starting to look into this wealth managers are using ai to help serve their clients better. Freighters are using AI and also Also, augmented intelligence tools to gain insights and flight market advantages. You know anything that they can get. They really try any slight gain, is worth it to them, and also many people are starting to see some real value from using ai just in general. So we wanted to spend some time to dig deeper into this and talk about how ai is being applied in various ways. So part of getting. Getting an advantage in the stock market, of course, was called Informational advantage. If you have to know something before other people know things. Then you have an advantage just goes all the way back to you. Even Barron Rothschild in London stock markets, how he used the supposedly passenger pigeons ticket information from the battlefields. You know that was like supposedly like one of those big innovations and it kind of carries. Carries through to the high frequency trading. We're like you can engage in micro. Senate? Like not even Microsoft, by Pico Senate seconds of advantage over someone else because you have the man, you could place that trade just before the other people place the trade. Then you have an advantage, right? So having information advantage is a real thing, but you know nobody really knows the future especially machines. So really. So what you can use, you could try to just build better models. You could try to figure out, could try to fill the basically figure out a better cause and effect like when you see something happening in one place, right? What does your model tell you about what will happen somewhere else or maybe something in the same market like when I see, let's see there's oil prices are going up does your Mama. Mama predict something with some high rate of predictability about what will happen in other market, and so this idea of modeling model changes for Stock Market for finance for risk levels, the is really able to really analyze things just a much higher level. It's basically just doing things that skill we talk about that with the idea of hyper personalization is one of the patterns just in general patterns and anomalies and predictive analytics. Systems can read all the news, they can look at all the social media. Posts, you know they could check every stock, it check derivatives on stock options that could check all those things. So companies that are really using a I are using it first and foremost to just be a massive intelligence gathering tool and synthesize all that information together, and basically try to use that to inform and influence their models and use those models to basically help do things at a much faster speed, and of course, is about speed right? The speed is incredibly valuable and so someone getting something just slightly faster getting that insight. Maybe you just haven't inside that nobody else has which is great in. You can act on that and hope nobody else notices, but a lot of time. But the truth of the matter is, is that you never alone there's too many people looking at too many things. So it's really about speed right and there are many many companies that are really building these ai tools to look at the complex patterns in the market and analyze those pens so that that's one big way is hoping right now.