One of the most important tasks in quantitative investment research is mining new alphas (effective trading signals or factors). Traditional alpha mining methods, either hand-crafted factor synthesis or algorithmic factor mining (e.g., search with genetic programming), have inherent limitations, especially in implementing the ideas of quant researchers. In this work, we propose a new alpha mining paradigm by introducing human-AI interaction, and a novel prompt engineering algorithmic framework to implement this paradigm by leveraging the power of large language models. Moreover, we develop Alpha-GPT, a new interactive alpha mining system framework that provides a heuristic way to “understand” the ideas of quant researchers and outputs creative, insightful, and effective alphas. We demonstrate the effectiveness and advantage of Alpha-GPT via a number of alpha mining experiments. In particular, we evaluated Alpha-GPT’s performance in the WorldQuant International Quant Championship, where it demonstrated results comparable to those of top-performing human participants, ranking among top-10 over 41000 teams worldwide. These findings suggest Alpha-GPT’s significant potential in generating highly effective alphas that may surpass human capabilities in quantitative investment strategies.

Schema induction builds a graph representation explaining how events unfold in a scenario. Existing approaches have been based on information retrieval (IR) and information extraction (IE), often with limited human curation. We demonstrate a human-in-the-loop schema induction system powered by GPT-3. We first describe the different modules of our system, including prompting to generate schematic elements, manual edit of those elements, and conversion of those into a schema graph. By qualitatively comparing our system to previous ones, we show that our system not only transfers to new domains more easily than previous approaches, but also reduces efforts of human curation thanks to our interactive interface.