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“ The vernacular and nomenclature that is used is different for trading swaps versus trading bonds . Every single market already has its own existing syntax of how people do business and that ’ s obviously a challenge when it comes to automating via AI . It ’ s going to require a lot of data and training ,” asserts Cheung .
Speaking about LTX ’ s OpenAI GPT-4 powered application BondGPT specifically , Kwiatkowski explained that in developing the tool , LTX quickly realised the importance of exactly that , working on incorporating training on the end users ’ vernacular to deliver a usable product .
“ In our market , traders expect to be able to speak the minimum required to be understood , so we ensured that the model understands bond market jargon common to trading desks .”
Another relevant facet in fixed income specifically is the reliance on OTC , linked to the slower pace of electronification , and the prevailing mathematics side of trading processes – bond maths is a key ing from the generative aspect of GPT and creating hallucinations .”
But while trading teams remain wary and continue to understandably poke holes in the current state of AI there is often something to be learnt from technology even when it goes “ wrong ”, suggests To .
“ The performance of AI improves over time and AI hallucinations may discover unknown unknowns which were previously nonsensical to human . It ’ s a paradigm shift to go from suspicious to opportunistic about newfound onset signals – liquidity among chaos .”
Demonstrably , potential AI issues are only magnified within the context of the financial markets , where complexity and niche knowledge is always the order of the day . Not only is the literal language used amongst traders complex , but these also differ firm to firm and asset class to asset class - easily understood among those in the know but otherwise a mystery .
“ The vernacular and nomenclature that is used is different for trading swaps versus trading bonds . Every single market already has its own existing syntax of how people do business and that ’ s obviously a challenge when it comes to automating via AI .”
MATTHEW CHEUNG , CHIEF EXECUTIVE OF IPUSHPULL
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