Academic warns of systemic risk from AI-powered trading
















































Academic warns of systemic risk from AI-powered trading – Risk.net



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Strategies generated by LLMs exhibit “very strange, correlated trading behaviour”, says Lopez Lira


A man is holding his head in fear as an AI robot gets its maths wrong

Trading strategies generated by large language models (LLMs) are surprisingly effective, but could introduce new systemic risks to financial markets, according to an academic study presented to European regulators last month.

Research conducted by Alejandro Lopez Lira, assistant professor of finance at the University of Florida, found LLMs can “effectively function as sophisticated trading agents

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