"AI Buys Stocks for Me"...But Can It Really Boost Returns?
Robinhood Opens Up Chatbot Trading
Robinhood is launching a feature that enables stock trading using artificial intelligence (AI) chatbots.
On May 27 (local time), Robinhood announced that investors with new "agent-based trading accounts" will be able to freely utilize AI programs such as Anthropic's Claude and OpenAI's ChatGPT. With this feature, investors can build portfolios, automate trading strategies, and place orders through AI.
This announcement from Robinhood comes just two months after rival platform eToro introduced agent-based trading functionality to its app, and Public, backed by Tiger Global, launched an agent that executes trades on investors' instructions.
Steven Mackintosh, Chief Investment Officer (CIO) at Sui Group Holdings, said, "This year, securities firms will engage in intense competition to provide agent-based trading services to users."
However, the Financial Times (FT) pointed out that there is still a lack of research on whether investment recommendations made by AI actually lead to improved returns.
In October last year, Nof1 entrusted $10,000 to each of six major large language models (LLMs) and had them trade on Hyperliquid, a cryptocurrency platform for derivatives trading. The goal was clear: maximize profits through medium-frequency trading, making buy and sell decisions on an hourly basis.
The experiment showed that the models generated profits in only 6 out of 32 instances. Some models displayed clear differences in bias, such as a preference for short-term bets. It was also found that these models were "extremely sensitive to seemingly minor prompt changes."
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CIO Mackintosh said that for these models to become truly advanced and function properly, they also need access to traditional datasets used by trading firms such as Jane Street, Hudson River Trading, and Citadel Securities for model training. He warned, "A base LLM is not suitable for generating profits; it is merely a general probability model."
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