It takes a person about 10 minutes to read a 2,500-word, front-page feature story in the Wall Street Journal. Computer programmes increasingly being used by investors to parse news stories can process one in about three one-hundredths of a second.
Algorithms -- problem-solving programmes based on mathematical formulas -- are making it easier for investors to filter the massive amount of text produced by news wires, newspapers, industry journals, clinical studies, and legal filings for kernels of information and trade on them in the blink of an eye.
Though the expanding array of news on non-traditional media like blogs and chat pages is a challenge for the robot readers, the speed and efficiency offered by news mining algorithms are helping hedge funds with just a handful of staff generate as many trades as a giant investment bank and becoming a potential boon to the media industry.
"This is a new class of information technology," said John Partridge, vice president of industry solutions with StreamBase Systems, a technology provider that specializes in processing and analyzing real-time streaming data.
High-frequency investors such as hedge funds are using news mining platforms like those offered by StreamBase to troll through thousands of electronic feeds of streaming text to identify key phrases on which to trade.
Popular phrases include "lowers its outlook" or "raises guidance" or even buzzwords like "stellar performance" that could potentially push a stock lower or higher.
Hedge funds, with their rapid-fire trading style, often allow the news mining platforms to make trades on their own, capitalizing on the technology's speed.
However, longer-term investors are less interested in flooding the market with orders after a particular headline. They are using the platforms to keep track of developments that may affect companies in their portfolios or influence their strategies, technology developers said.
Source: http://infotech.indiatimes.com/Pers...ews_and_trades_on_it_/articleshow/2160715.cms
Algorithms -- problem-solving programmes based on mathematical formulas -- are making it easier for investors to filter the massive amount of text produced by news wires, newspapers, industry journals, clinical studies, and legal filings for kernels of information and trade on them in the blink of an eye.
Though the expanding array of news on non-traditional media like blogs and chat pages is a challenge for the robot readers, the speed and efficiency offered by news mining algorithms are helping hedge funds with just a handful of staff generate as many trades as a giant investment bank and becoming a potential boon to the media industry.
"This is a new class of information technology," said John Partridge, vice president of industry solutions with StreamBase Systems, a technology provider that specializes in processing and analyzing real-time streaming data.
High-frequency investors such as hedge funds are using news mining platforms like those offered by StreamBase to troll through thousands of electronic feeds of streaming text to identify key phrases on which to trade.
Popular phrases include "lowers its outlook" or "raises guidance" or even buzzwords like "stellar performance" that could potentially push a stock lower or higher.
Hedge funds, with their rapid-fire trading style, often allow the news mining platforms to make trades on their own, capitalizing on the technology's speed.
However, longer-term investors are less interested in flooding the market with orders after a particular headline. They are using the platforms to keep track of developments that may affect companies in their portfolios or influence their strategies, technology developers said.
Source: http://infotech.indiatimes.com/Pers...ews_and_trades_on_it_/articleshow/2160715.cms