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Bot makes millions trading options

] by Seth Stevenson @slate.com - A Web-reading bot made millions on the options market. It also ate this guy’s lunch.

] What we’re talking about here are options trades based on breaking rumors
] options traders noticed, that within < 1 minute after announcement, trades for large quantity of options on companies,
] feasibly impossible for humans to make trades as quickly as these are happening,
] Consider that if the purchaser of those Altera options had taken his $110,530 and simply bought regular stock in Altera with it, he would have cleared about a $34,000 profit by the end of the day. Instead, using options, he made $2.4 million.
] Bots that make trades based on news content have been around for years
] There have also been reports about hedge funds that trade based on sentiments expressed in tweets
] In the case of the Altera incident, though, a bot appeared to read a rumor, understand it, and instantly execute an options strategy based on it.
] This is by far the most advanced version of this we’ve ever seen. It’s at a totally different level.”
] To be fair, there is risk for the bot-users, too. “Automated trading on Internet content is a highly competitive business. Things can go horribly awry for the bots. Tetlock pointed me to an example in which a 6-year-old news story about United Airlines’ 2002 bankruptcy somehow reappeared online in 2008. “As algorithms traded on this stale news,” Tetlock explained to me in an email, “United’s stock price plummeted by 76 percent within minutes.”

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DESCRIPTION: ] by Seth Stevenson @slate.com - A Web-reading bot made millions on the options market. It also ate this guy’s lunch.

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