If the AGI can simply double it’s cognitive throughput, it can just repeat the action “sleuth to find an under-priced stock” as needed. This does not exhaust the order book until the entire market is operating at AGI-comparable efficiency, at which point the AGI probably controls a large (or majority) share of the trading volume.
Also, the other players would have limited ability to imitate the AGI’s tactics, so its edge would last until they left the market.
This is true. Keep in mind that the AGI is trying to make money, it’s having to find securities where it predicts humans are going to change the price in a predictable direction in a short time horizon.
Most securities will change their price purely by random chance (or in a pattern no algorithm can find) and you cannot beat the market.
Now there is another strategy. This has been used by highly successful hedges. If you are the news you can make the market move in the direction you predict. Certain hedges do their research and from a mixture of publicly available and probably insider data find companies in weak financial positions. They then sell them short with near term strike prices on the options and announce publicly their findings.
This is a strategy AGI could probably do extremely well.
If the AGI can simply double it’s cognitive throughput, it can just repeat the action “sleuth to find an under-priced stock” as needed. This does not exhaust the order book until the entire market is operating at AGI-comparable efficiency, at which point the AGI probably controls a large (or majority) share of the trading volume.
Also, the other players would have limited ability to imitate the AGI’s tactics, so its edge would last until they left the market.
This is true. Keep in mind that the AGI is trying to make money, it’s having to find securities where it predicts humans are going to change the price in a predictable direction in a short time horizon.
Most securities will change their price purely by random chance (or in a pattern no algorithm can find) and you cannot beat the market.
Now there is another strategy. This has been used by highly successful hedges. If you are the news you can make the market move in the direction you predict. Certain hedges do their research and from a mixture of publicly available and probably insider data find companies in weak financial positions. They then sell them short with near term strike prices on the options and announce publicly their findings.
This is a strategy AGI could probably do extremely well.