When AI Trading Works, You Won't Hear About It
7 hours ago
- #LLM Applications
- #Quant Investing
- #AI Trading
- Current AI trading bots lack a persistent edge and results are random, mainly used by retail investors in markets like crypto.
- Professional quant investing involves complex processes like alpha signal research, portfolio optimization, and transaction cost analysis, unlike simplistic LLM bots.
- Institutional adoption of LLMs in trading is slow due to reluctance to abandon proven methods, creating opportunities for newcomers.
- Hedge funds are likely using LLMs to accelerate research privately, and successful AI trading strategies may remain undisclosed to maintain competitive advantage.
- Alternative data adoption by discretionary funds shows how new approaches can emerge by ignoring traditional constraints, similar to potential LLM innovations.