Jessica Powers | Jul 21, 2022
Parul Pandey | Sep 02, 2022

Artificial intelligence is to trading what fire was to the cavemen.” That’s how one industry player described the impact of a disruptive technology on a staid industry. 

In other words: AI is a game changer for the stock market.

AI Stock Trading

AI stock trading uses robo-advisors to analyze millions of data points and execute trades at the optimal price. AI traders also analyze forecast markets with greater accuracy and trade firms efficiently which mitigate risks and provide higher returns.

While humans remain a big part of the trading equation, AI plays an increasingly significant role. According to a study by U.K. research firm Coalition, electronic trades account for almost 45 percent of revenues in cash equities trading. And while hedge funds are more reluctant when it comes to automation, many of them use AI-powered analysis to get investment ideas and build portfolios.


What Is AI Trading?

AI trading companies use various tools in the AI wheelhouse — machine learning and algorithmic predictions, for example — allowing brokers to customize exchanges and secure stocks. One benefit of AI stock trading is that it can be executed on ordinary networks and PCs. 

When Wall Street statisticians realized they could apply AI to many aspects of finance, including investment trading applications, Anthony Antenucci, vice president of global business development at Intelenet Global Services, had insight to share. 

“They could effectively crunch millions upon millions of data points in real time and capture information that current statistical models couldn’t,” he told ITPro Today. “Machine learning is evolving at an even quicker pace and financial institutions are one of the first adaptors.”

Of course, Antenucci isn’t the only one to recognize AI’s stock potential. Online trading is expected to reach a market value of approximately $12 billion by 2028. Much of this anticipated growth will be thanks to AI. 

As the global online trading market grows, so will the demand for AI tools that make trading easier. Here are several AI trading companies changing the game.


AI Trading Companies

Location: Chicago, Illinois 

Through its 2017 acquisition of Neurensic, Trading Technologies has an AI platform that identifies complex trading patterns on a massive scale across multiple markets in real time. Combining machine learning technology with high-speed, big data processing power, the company provides clients with the ability to build their own algorithm trading platforms. This allows users to automate the entry and exit of positions and reduce the market impact of large orders as well the risk of manual errors.


Location: London, United Kingdom

GreenKey, which was acquired by VoxSmart, uses speech recognition and natural language processing technology to save traders time searching through conversions, financial data and notes. With the company’s platform, financial professionals are using AI to sift through, and access, notes, market insights and trending companies in real-time.


Location: Seattle, Washington

Kavout’s “K Score” is a product of its intelligence platform that processes massive diverse sets of data and runs a variety of predictive models to come up with stock-ranking ratings. With the help of AI, the company recommends daily top stocks using pattern recognition technology and a price forecasting engine. Its model portfolios are enhanced by AI algorithms.


Location: San Francisco, California 

Numerai uses machine learning to predict stock market trends and manage a new kind of hedge fund. The firm is a unique player in the market, as it uses encrypted data sets to crowdsource stock market models predicted by AI. The models are sourced from anonymous data scientists who are awarded Numerai’s cryptocurrency, NMR, for providing better models.


Location: London, United Kingdom

Auquan’s data science competition platform democratizes trading by allowing data scientists to produce algorithmic trading strategies that help solve investment challenges. The platform works by users supplying a raw data set that Auquan’s tools then create within a structure and analyze. These revised and structured data sets allow users to predict opportunities and risks. Auquan strives to help investment clients reap the benefits of data science without the need for in-house expertise.


Location: Miami, Florida 

IntoTheBlock uses AI and deep learning to power its price predictions for a variety of crypto markets. IntoTheBlock’s models are trained on spot, blockchain and derivatives datasets and allow users to access historical data to better inform their trade decisions.


Location: San Diego, California

Overnight, Trade Ideas’ AI-powered self-learning, robo-trading platform “Holly” subjects dozens of investment algorithms to more than a million different trading scenarios to increase the alpha probability in future sessions. Each night the AI assistant platform will select the strategies with the highest statistical chance to deliver profitable trades for the upcoming trading day. On average, Holly enters between 5 and 25 trades per day based on various strategies.


Location: Stamford, Connecticut

Composed of experienced traders, analysts and engineers, Imperative Execution builds “efficient financial exchanges” with the help of its product IntelligentCross, which uses AI to optimize the trading of U.S. equities. The platform works with a variety of brokers and receives over 200 million orders from investors per day, according to its website.


Location: San Francisco, California

Sentieo provides a host of financial solutions with the help of AI. The company’s AI-powered financial search engine collects internal and external content into a single shared workspace. Analysts can use its natural language processing to identify the latest news on key financial searches, while individual investors can use its platform to research companies and markets.


Location: New York, New York

Two Sigma uses machine learning in its tech-centric trading, as it invests in public equity, fixed income and alternative investment markets. Two Sigma’s AlphaStudio is a data science competition platform that seeks to provide an outlet for investors and researchers to use the scientific method for insights and predictions.

An earlier version of this story was written by Mike Thomas.

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