Implications for the Financial Markets: Using Brain Data from the iBrain.

Above: The Ibrain. Dr. Philip Low, Founder, Chairman, and CEO of NeuroVigil, wearing the iBrain.

I read an article recently on a new product, that uses a single channel EEG, to capture data when you think. It describes an input device that may have concerning implications in many sectors. One of the most worrisome is how such devices are already on the radar of large institutional trading firms like Goldman Sachs. The device, in one iteration called the iBrain, is now a commercially available product, and will soon cost under $100. The company who makes the device is Neurovigil, (maybe it is just me, but having “vigil” as part of this name seems a bit odd). If you know anything about the financial markets, you can’t help but imagine the potential impact of such a device on algorithmic trades, (algo trades, are executed by computer programs), at firms like Goldman Sachs.

Even without this data, programmers create trades that change depending on something as simple as a word change in the news. But with this data, Goldman and others involved in algorithmic trades would have access to market changing data, that would be for the most part, uncontrolled and undetected. I asked a trader, if he thought Goldman was aware of these implications. He said they were already prepared, as they own a large interest in a company named Omneuron, which does research in this area.

Considering the user-friendly name of iBrain, this device has the potential for multitudes of blissfully unaware 401K owners to use it for other purposes and have their data stored in the “cloud”. This data might be able to be mined by programmers at Goldman, to create trades responsive to the thoughts of these users, as Orwellian as this may sound! I doubt this use could be regulated very quickly or easily because of the complexity of forging such regulations when data has become inextricably bound up with an aspect of our physiology.

Since I am imagining scenarios here, lets take this one step further. What if the “fat finger errors ” or flash crashes in the market recently, were just glitches in experiments being performed using such single channel EEG data to control algo trades. As strange as this might seem, it is now something that takes less effort in order to suspend our disbelief.