Has anyone had experience with such things? Do they even exist? In theory it would seem possible – and relatively safe – to buy and sell an ETF in a broad market index like the S&P 500 automatically when it reaches a certain (minimal) difference, i.e. an automated version of limits, stop losses etc. I suppose derivatives do such things but again the question is if there are programs that can it all automatically and that would be available to individual investors (as opposed to hedge funds and the big money that no doubt has all this and more).
It is widely reported that such software exists and is used by major investors. The most common one is arbitrage where prices of stocks traded on multiple exchanges are monitored and when differentials are reported they buy on one exchange and sell on the other.
There also reports of software that monitors news wires (like the Dow Jones broad ticker) for key words like war, recession, etc, etc, and immediately buys or sells a list of stocks that are likely to be impacted.
Major investors are said to maintain mathematical models of many stocks that predict stock values based on expected inputs like sales, margins, etc and then adjusts value for each new piece of news and buys or sells as indicated. That’s the reason for steep rises or decline in share price when earnings are reported. But the numbers also change with interest rates or expected changes etc.
All those are out there but I don’t think individuals get to use those services. Maybe major clients with lots of clout and $$$.
I would not be surprised to learn you can get programs that would buy and sell stocks for you if you like. But risky. You have to get the algorithims right or you can lose lots of money quickly. But when fine tuned it can be a money machine. I think this is the reason quants are hired on Wall Street. Sorting through masses of data to find series that accurately affect stock prices. Nice work if you can get it.
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