“ The size becomes a lot more significant in terms of how people will price if you ' re too free with the information .”
[ B U Y - S I D E C O V E R I N T E R V I E W | S H A R O N R U F F L E S ]
Ruffles explains , bringing artificial intelligence ( AI ) to fixed income for the first time . Several AI-focused initiatives - in particular those related to liquidity analysis and sourcing - have been brought to market in recent months as available data sets have expanded ( see page 32 for a deep dive into the role of AI in fixed income ).
“ To a certain extent we ' re already using AI . Composite + is taking in streaming prices and historical prices and it ' s overlaying the positive factors and then it ' s putting a predictor in there ,” Ruffles explains . “ Then it ' s coming up with a ‘ composite price ’.”
“ That ' s probably been the biggest evolution . When I first started trading , I would be picking up the phone and asking people for prices . The best I had to go by would be maybe where I last traded a bond and then potentially some information on Bloomberg . We ’ ve gone from that point to today where most bonds have got a liquidity score that we can look up some of these MTFs . We can see those streaming prices contributing to the composite pricing . What AI can ’ t do in finance , any more than a human can do , is predict the future .”
“ The size becomes a lot more significant in terms of how people will price if you ' re too free with the information .”
26 // TheTRADE // Q3 2023