Artificial intelligence (AI)’s cheeky little brother or sister, machine learning, is shaking up the market like a caffeine-fueled squirrel. It’s making it possible for trading programs to learn and change faster than a chameleon at a color party. “Machine learning lets market makers fine-tune their strategies on the fly, like a chef adjusting a recipe based on the whims of a particularly picky diner,” Reitberg says. Machine learning models can read fortunes by looking at huge amounts of historical data and keeping a close eye on what’s going on in the market. They can predict how prices will move, improve bid-ask spreads, and change trading strategies like a skilled chef making changes to a recipe for the perfect soufflé. Don’t use those old programs that do nothing but sit around. In the world of technology, machine learning systems are the overachievers. They are always noticing changes in the market and working out to get better results while keeping risks in check. This flexibility is like a chameleon at a disco—it’s a must in markets that change quickly, where the lights can go out and the beat can drop at any time! AI and machine learning are like the dynamic team of finance. They give market makers the power to change their strategies at any time, which increases profits and keeps liquidity as smooth as a Saturday night jazz saxophonist! As these amazing pieces of technology keep getting better, they’ll be the key to the future of automated trade and market making. Think of them as the wizards behind the curtain, but without the pointed hats.
