Comment by solotronics
5 hours ago
The part people are missing here is that if the trading firms are all doing something, that in itself influences the market.
If they are all giving the LLMs money to invest and the AIs generally buy the same group of stocks, those stocks will go up. As more people attempt the strategy it infuses fresh capital and more importantly signaling to the trading firms there are inflows to these stocks. I think its probably a reflexive loop at this point.
They could have the AI perform paper trading: give it a simulated account but real data. This would make sense to me if it was just a research project. That said, I imagine the more high-tech trading firms started running this research a long time ago and wouldn't be surprised if there were already LLM-based trading bots that could be influencing the market.