Can human market investors beat the algorithms?
Are the algorithms something that people in the know could game? If insiders see specific things happening and they know some sort of action is soon to follow because the algorithms are programmed a certain way, could they try to beat the market by reacting in front of that surge or decline?
Algorithms are now responsible for a majority of market trades.
In theory, yes, you could get ahead of these algorithms if their trading behavior is obvious. But firms can make algorithms trade in a way that obscures what they’re doing, explained Alejandro Lopez-Lira, an assistant professor of finance at the University of Florida’s Warrington College of Business.
Read more from Lopez-Lira in this story from Marketplace.