Source: The Wall Street Journal (paywall)
Retail traders are using Claude and Codex to build AI agents that execute trades autonomously based on natural language instructions—effectively outsourcing portfolio decisions to LLMs without requiring traditional programming skills. This lowers the barrier to algorithmic trading infrastructure that was previously available only to expensive quant funds and institutional traders, but introduces acute risks: retail investors lack the compliance frameworks, risk controls, and capital buffers that institutional traders maintain, and AI hallucinations in financial decision-making carry real money consequences. Consumer-grade AI tooling is enabling retail participation in strategy automation at scale, and regulators have barely begun to address it.