AI Case Study

Liquidnet assists fund managers in decision making by analysing market and past trading data with machine learning

Liquidnet, the largest “dark pool” operator in the Asia-Pacific region, has introduced artificial intelligence and machine learning tools as customers increasingly turn to new technologies to manage their portfolios, according to its founder and chief executive Seth Merrin.

Industry

Financial Services

Fund And Asset Management

Project Overview

"Called Discovery, the new analysis tool is installed on the computers of fund managers.

It uses artificial intelligence and machine learning to analyse massive amounts of data and past trading records to give automatic alerts if a sudden market event occurs that may affect the portfolio. These might include an interest rate rise or political events.

“Discovery is not a robo-adviser but it uses AI and machine learning technology to analyse market information for the fund managers. The fund managers are the ones to make the investment decision but Discovery can help them to make a better decision,” Merrin said.

The new tool can also help investors to find the stocks they want to trade by searching within Liquidnet’s 46 markets worldwide as well as external traditional stock exchanges and other electronic trading platforms.

Turnover, or principal traded, in the US and Europe year to date, totalled US$608 billion, up to 23 per cent year on year."

Reported Results

Liquidnet reports that the tool has increased its turnover in the US and Europe, while despite the volatile markers as a result of the US-China trade war, Hong Kong trading via Liquidnet has doubled from the same period last year to US$12 billion.

Technology

Function

Operations

Trading

Background

"Dark pools are electronic trading platforms that have emerged in the past decade in advanced markets. They allow traders to buy or sell large blocks of shares without having to disclose their identities, the volumes or prices, unlike traditional exchanges.

They are popular with asset-management companies, pension funds and insurance firms which need to conduct a lot of large transactions, because they are cheaper and easier to carry out via electronic trading platforms.

Merrin founded Liquidnet in 2001 in the US and later expanded into Europe and Asia-Pacific. The platform has seen trading volume in Asia-Pacific of US$42 billion so far this year, up 57 per cent from a year earlier. Hong Kong and Japan, its two largest markets in the region, have both doubled their volume of trade year to date.
In the US and Europe the figure is US$608 billion, up 23 per cent from 2017."

Benefits

Data

market and stock data and past trading records