From the course: AI in Fintech Essential Training (2019)
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Algorithmic trading and finance
From the course: AI in Fintech Essential Training (2019)
Algorithmic trading and finance
- [Instructor] One of the big areas where FinTech is having a huge impact already is in algorithmic trading. The reality is the financial industry is evolving. Computers ever since the '90s have been playing a bigger and bigger role. Algorithmic trading, computer-driven trading, now makes up a large majority of trades. More than 90% of orders on the stock market are computer-driven by some estimates. So, the reality is that that old trope about a human being a stock picker and making those trades, that's something that's relegated to the '80s. The new trader really is a computer and the role for humans is in designing algorithms. Humans play a role in trading by telling computers what to do, what to look for. Now, algorithmic trading essentially comes in two different flavors: market making and data mining. Market making trades attempt to capitalize on the bid-ask spread. This is typically associated with…
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