FinTech Magazine August 2024 | Page 124

Walk us through the perks of algorithmic trading for investment managers .

Jamil Jiva , Global Head of Asset Management , Linedata : Algorithmic trading has pros and cons , but the main pro is the speed of decision that algorithmic trading enables . At high frequency , it has an advantage on humans to react to market inefficiencies and to capture gains that would not be possible otherwise .
Additionally , AI has fewer emotional biases in comparison to humans that could increase losses or undermine gains .
Finally , with the capacity to be fed with much more information than any human could , AI can capture signals that could be leveraged by algorithmic trading to make better and faster decisions .
However , it is not a silver bullet as big losses or big misses can also be attributed to algorithmic trading .
124 August 2024