SEC Approves Nasdaq’s Groundbreaking AI-Based Trading Tool: Dynamic M-ELO

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The SEC has given Nasdaq the green light for an innovative AI-based trading tool, called Dynamic Midpoint Extended Life Order (M-ELO). This tool can quickly adapt orders in real-time, offering significant advantages for traders. It aims to connect investors with similar goals and improve transaction efficiency. Nasdaq’s tests showed a 20.3% increase in fill rates and an 11.4% reduction in mark-outs, indicating potential benefits.  

How AI Boosts Efficiency

Interestingly, despite the heightened crypto rules, the SEC’s nod to AI is quite amusing as it shows their double standards on innovative technology. In the cloudy air how AI is making waves? All because the new M-ELO will use real-time AI to swiftly respond to market changes. This differs from previous methods, as it constantly adjusts order durations based on real-time data, providing more flexibility. The ultimate goal is to enhance liquidity and execution quality. 

How It Will Help Traders? 

On the top, Traders will now have more tools to navigate potentially in the unregulated crypto markets. It seems doubtful how useful the technology will be for the future market. Notably, this advancement aligns with Nasdaq’s commitment to supporting market participants with innovative solutions.

Importantly, Nasdaq’s focus on innovation extends to other areas as well, such as dynamic multi-exchange link optimization (M-ELO) and predictive AI in US options markets. These upgrades aim to increase efficiency and meet the evolving needs of traders. Kevin Kennedy, Nasdaq’s VP of Trading, is excited to work with market participants and offer top-notch solutions.

The introduction of Dynamic M-ELO is a significant stride in integrating AI within trading systems, with notable increases in fill rates and reductions in mark-outs, signaling a positive impact on trading efficiency and effectiveness. This new feature looks at each symbol individually and checks over 140 different pieces of information every 30 seconds. It uses this data to figure out the best time to make a trade.