Some people think that a rise of the machines is just a screenplay for fantastic movies. However, the real danger can be more serious than it seems. Fortunately, robotic vacuum cleaners are not going wild yet, but trading robots have already had a profound effect on the global stock markets. Statistically, about 80% of all deals on the US stocks are conducted by automated trading systems daily. Thousands of machines carry out thousands of trades every day, based on the preset parameters. Emotions, intuition or breaking news have no significance for robots as they keep doing their job dispassionately under any circumstances. Such an approach triggers massive sell-offs in the global stock exchanges with increasing frequency. "Eighty percent of daily volume in the U.S. is done by machines, so what you get is a lack of focus on earnings, a lack of focus on outlooks and you just get short-term movements based on very specific data that is released every day and that creates noise," fund manager Guy De Blonay said in an interview with CNBC.
Having examined the market dynamics this year, experts concluded that trading bots cause stronger sell-offs. Trading based on pre-set algorithms reinforces unloading of assets during a plunge in the market, thus increasing sell volumes and speeding up a decline. Remarkably, the number of bots is rising fast with every passing day, so these algorithms factor in the levels at which a sell-off may be triggered.
