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Isn't this what caused a tizzy in the markets a few months ago? Some news article came out that trigged some of the algos to sell...then the other algos starte

by blhack 16y ago

Isn't this what caused a tizzy in the markets a few months ago? Some news article came out that trigged some of the algos to sell...then the other algos started seeing this and selling...then the news reports started flowing in about something weird going on...the algos thought the sky was falling and started freaking out until somebody hit the scram button?

MrFoof 16y ago
Ultimately what caused the tizzy in the markets was the mid-office of financial institutions not being rigorous enough. Not enough backtesting. Inadequate modeling. Weak correlations. Analyzing news, per se, isn't an issue. There are already plenty of data brokers that provide this information (i.e. Thomson Reuters' Guidance, Significant Developments, and many more). Decreasing the latency also isn't an issue. Models that enter runaway states are the issue. Quantitative finance is about rigor -- eliminate the rigor and it's advantages over qualitative strategies are all but gone.