Enthusiasm for artificial intelligence (AI) among buy-side equity traders is no longer a whisper but a growing roar. Data from our 2024 Market Structure and Trading Technology Study shows that about a quarter (24%) plan on incorporating internal AI technologies into their trade execution workflow in the coming year, with 15% claiming to do so already. To be clear, AI use in this context is specific to trade execution and excludes third-party tools, such as algo wheels and analytics platforms provided by vendors and brokers.
This eagerness to harness AI’s transformative potential to optimize performance and automate button-clicking is understandable, given the promise of improved trading outcomes and reduced costs. However, as traders seek to leverage AI, they must be mindful of the challenges and pitfalls that lie ahead. Its implementation will require careful consideration of the complexities and nuances of equity trading.
MethodologyFrom July through September 2024, Coalition Greenwich interviewed 40 buy-side equity traders in North America. The study was conducted over the phone, online and in-person. Respondents answered a series of qualitative and quantitative questions about their daily workflow, broker selection and evaluation, technology platforms used, commissions, technology budgets, and business practices in the U.S. cash equity space.