Nasdaq Receives SEC Approval for the Stock Exchange's First AI-Based Order Type

Nasdaq (NDAQ.O) said that it has obtained approval from the US Securities and Exchange Commission to launch the first order-type exchange based on artificial intelligence, a step that, if successful, may lead to increasing the efficiency of the stock market.

The exchange added that approving the dynamic mid-life extended order (M-ELO) would speed up the pace of order matching and reduce market impact, which could lead to better trading results for investors.

The dynamic version of this will use artificial intelligence technology known as reinforcement learning to monitor market behavior and make real-time adjustments to that waiting period to improve the quality of execution and the percentage of the order filled in the market.

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