“Algo Trading”

While financial markets hope for a Presidential winner by the opening bell, a disturbing report today from Bloomberg takes a closer look at a growing trend toward replacing traders.. with machines. The recent spurt in lumber marketing memos and policies might naturally lead some wholesalers to read between the lines. So far as we can tell however, there are no plans afoot to automate the wholesale function. Still, if computer algorithms can now “respond” based on market liquidity, can robotic firms be far behind?
“It’s natural to push away from humans.. it’s been gaining momentum” said Peter Tchir, the founder of New York-based TF Market Advisors. Adds Bonnie Baha, head of global developed credit at Los Angeles-based DoubleLine Capital LP: “I don’t think it’s driven by a desire for efficiency as much as a desire to control costs. The cost of a major trading error which could possibly be avoided by having a real human person sitting and thinking about things will far outweigh the personnel costs they save by firing all these guys.”

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