Sunday, February 19, 2012

Stock Trading

Zero Hedge has a piece reporting that due to improvements in computer-assisted data interpretation, it's now possible for a program to take a company's quarterly financial report and turn it into something that looks like an article written by a human.

At the same time, there are word searching programs that can take human interpretation of companies data and turn this into buy or sell recommendations, which the program can then act on.

It's not too hard to see this getting out of hand as both positive and negative feedback mechanisms take over. The smart financial geeks are looking for software that can spot stocks that move more than say 10%/minute and execute buy or sell orders the instant the movement drops below 5%/min. A person quick on their feet could conceivably end up owning General Motors for $100 if your timing was right.

Of course you could just keep an eye out for news that Acme Solar Wind Farms had just gotten a $500 Billion loan guarantee from the government and start shorting the stock

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