Hedge Funds Are Training Their Computers to Think Like You

  • Deep learning, once hyped by firms, returns with modest aims
  • WorldQuant trades with neural networks; Man AHL may follow

Hedge funds have been trying to teach computers to think like traders for years.

Now, after many false dawns, an artificial intelligence technology called deep learning that loosely mimics the neurons in our brains is holding out promise for firms. WorldQuant is using it for small-scale trading, said a person with knowledge of the firm. Man AHL may soon begin betting with it too. Winton and Two Sigma are also getting into the brain game.

The quant firms hope this A.I. — a kind of machine learning on steroids — will give them an edge in the escalating technological arms race in global finance. If they’re right, neural networks could help propel the transformation of finance, pitting machine against human and threatening old-school investing jobs. But today’s researchers are careful not to oversell the technology — it’s just another potential arrow in their quiver — after an earlier round of promotion and disappointment…

Hedge Funds Are Training Their Computers to Think Like You

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