Humans Top Bots in Covid Crisis Electronic Bond Trading Test
- Algorithms failed in volatile markets, then people stepped in
- Market knowledge still needed despite push for coding skills
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It turns out the corporate bond market still needs traders.
The algorithms that dealers use to buy and sell bonds with their customers failed in March at the height of extreme volatility from the coronavirus pandemic, according to investors and price data. The nimble analysis of flesh-and-blood traders was suddenly needed to price bonds, edging out machines that normally can trade large portions of the market without any human input.