141–150 of 192 posts
I don’t understand this constant fascination with having language models trade stocks. Language models are very useful tools but not aligned at all with generating alpha.
I don’t understand this constant fascination with having language models trade stocks. Language models are very useful tools but not aligned at all with generating alpha.
Basically what investment agents used to do in the 80s-90s where the only way to make a trade was to call someone at the broker and explain what you want.
Taking a step back, I see this as what llms are actually useful for. Empowering people to do things they might otherwise need to study and research for a few weeks to do. When ultimately, that research is just unnecessary gatekeeping.
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If that was his genuine concern, then instead of trying to balance a portfolio of 103 stocks... you simply buy QQQ and short Tesla at 3.53% worth of your QQQ holdings.
You pay interest when you short stock. And if we want to talk about "bad financial advice", I think telling people to try and time the market with a short is considerably worse than "buy the same shares that QQQ does".
> I think telling people to try and time the market with a short is considerably worse
Nobody is trying to time the market. If you want QQQ but don't want the Tesla exposure in it, it's a lot cheaper net to simply hedge against your Tesla exposure with a short position counteracting your long position. If you're worried about margin rates interfering with your profits, you can model all of these and come up with the optimal short needed to hedge your risk. This is standard financial practice.
Shorting doesn't have anything to do with timing the market, the reason why pop investing communities think that shorting and timing the market are synonymous is because as a whole asset prices are expected to keep pace with the RFRR assuming they at least hold their value, so taking a short position is going against the "default" market direction.
I suspect that the folks that get it right, will do nicely.
But not everyone will get it right...
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There is a beautiful irony in being condescending about AI simply imitating training data… by repeating a meme you saw on Twitter: https://www.facebook.com/photo/?fbid=772349875124360 (which I guess I will call your training data ;) )
I wonder how much Robinhood will profit from this change. Obviously how much the average user will profit / compile debt from this change is a lot more variable.
I was definitely wondering this. As I understand it they make money on order flow and don't charge for transactions (is that right?). But allowing LLMs to trade dilutes the true information in the order flow. On the other hand maybe it's just chasing trends, like their previous forays into blockchains. It pays because it keeps their name in the news.
Institutional order flow can move the market, or be an indicator that the market is going to move in that direction. So executing against it a worse bet than executing against retail flow.
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The difference is that a human can evaluate the meme against their real world history and experience, and make a judgement.
That sounds like more training data that the human is just regurgitating. Nobody I know has ever had an original thought, just combined existing thoughts that were in their training data, in new combinations.
I don’t understand this constant fascination with having language models trade stocks. Language models are very useful tools but not aligned at all with generating alpha.
I think it comes from decades of fear mongering over how "dangerous" stocks and options are. If you can, instead, explain to an llm what your goals are, it can set up a simple buy-and-hold for you. Basically what investment agents used to do in the 80s-90s where the only way to make a trade was to call someone at the broker and explain what you want. Taking a step back, I see this as what llms are actually useful for…
And it shouldn’t take you weeks to understand how to trade options or any of the myriad of ways you can invest.
Earlier quoted context omitted.
If that was his genuine concern, then instead of trying to balance a portfolio of 103 stocks... you simply buy QQQ and short Tesla at 3.53% worth of your QQQ holdings.
You pay interest when you short stock. And if we want to talk about "bad financial advice", I think telling people to try and time the market with a short is considerably worse than "buy the same shares that QQQ does".