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Wednesday, 8 August, 2001, 19:35 GMT 20:35 UK
Robots beat humans in trading battle
A robot mixes cocktails PA
Not bad at trading pork bellies, either
In the first ever test of its kind, a team of robots has beaten humans in simulated financial trading.

Computer giant IBM pitted robotic trading agents, known as "bots", against humans in trading commodities such as pork bellies and gold.

The bots made 7% more cash than the humans, according to a report in New Scientist magazine.

Researchers say the successful experiment presages increased use of artificial intelligence in financial markets, where computerised trading already plays an important role.

But since none of the humans were investment professionals, traders will argue that it is too early to consider replacing them with machines.

Battle of the bots

In IBM's test, six bots and six people traded against each other - half were buyers and half sellers.

Buyers were given an upper spending limit, while sellers had a minimum sale price. Their goal was to maximise their profit at the end of trading.

The situation was designed to mimic the kind of market where buyers and sellers have a fixed amount of time to trade in a single commodity.

Although the tasks performed by the bots were extremely simple, Jeffrey Kephart, from IBM's research centre in New York, said that this was the first step to automating many of the basic trading decisions made in financial markets.

"We see agents being down there in the frenzy of the trading pit while humans are elevated to a more managerial role," he said.

IBM has invested heavily in the development of artificial intelligence.

The firm was behind Deep Blue, the chess computer that took on - and beat - grandmaster Gary Kasparov.

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