The U.S. Securities and Exchange Commission (SEC) has approved a new artificial intelligence (AI)-powered order type for Nasdaq’s stock exchange. This marks the first AI order type approved for an exchange. Nasdaq says the latest technology aims to improve efficiency and performance on its platform.
Nasdaq’s AI-Powered Trading Mechanism Gets SEC Nod
Nasdaq announced on Friday that it received approval from the SEC to launch its “Dynamic Midpoint Extended Life Order.” This new order type uses artificial intelligence (AI) to match buyers and sellers who plan to hold stocks for longer periods.
Traditionally, Nasdaq matched buyers and sellers using set waiting periods. But the company found using AI to adjust waiting times based on current market conditions improved results. The AI-powered order type increased fill rates by 20% and reduced unwanted trades by 11% in Nasdaq’s tests.
Nasdaq detailed that the technology analyzes over 140 factors in real-time. It then suggests optimal
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