SEC Greenlights Nasdaq's First AI-Powered Order Type

Nasdaq announced recently that it received approval from the U.S. Securities and Exchange Commission (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 holding periods to reduce the impact of trading on stock prices. This benefits longer-term investors by finding them matches more efficiently, the company's announcement explains.

Nasdaq President Tal Cohen said the new AI order type shows the exchange's "commitment to delivering innovative products and tools."

The company also recently implemented AI in its options markets. The technology analyzes potential new options contracts and predicts which are likely to trade. This allows Nasdaq to improve liquidity while keeping total contracts listed the same. 

(Source: Bitcoin.com News)