10 Good Reasons For AI To Keep Evolving In Finance

“We can plan for the market and ride the waves, but having a more accurate prediction of market conditions will only help businesses react more effectively when there is a market turn. Being able to capitalize on a good market means more investment. Bracing for a downward trend is effective mitigation against damages, which could mean fewer jobs affected. Things like reporting and analysis of data take so much time when done manually, and there are things in the data even the best analysts might miss. If this were done via AI, the takeaway could be that much more telling and can lead to innovations we have yet to ponder.” – Daniel WesleyCredit Loan, LLC

Read the full article at forbes.com

Millennials Main Users Of Alternative Data

Ignore the hype and focus on machine learning objectives, say buy-side tech experts

Advancements in machine learning and artificial intelligence (AI) may be improving trading strategies, but at the cost of transparency and interpretability, according to panellists at this TradeTech FX Europe.
Ian McWilliams, investment analyst at Aberdeen Asset Management, detailed how the understanding of what machine learning technologies are capable of is being distorted by a lack of understanding and exaggeration.

“I joke that when you are advertising externally you say AI, but inside you say machine learning and actually you are just doing logistic regression and things like that,” he said. “I don’t think that’s disingenuous, maybe it’s a bit of hyperbole, but it’s not wrong in terms of definitions, because when we talk about machine learning it really is anything where you are getting an algorithm to learn from data.”

“We’re taking a lot of market signals and sentiment signals, forecasting what markets are going to do in the future and using those to build trading strategies.”

McWilliams explained that the hype around elements of machine learning such as deep learning, image recognition and natural language processing (NLP) are distorting expectations around what are essentially tools to better model data for trading strategy decisions, particularly when it comes to conversations with fund managers.

“The interesting thing we need to think about as an industry and maybe where attitudes need to change is around interpretability of the models, which is a big question in a lot of areas, not just finance,” he said.

“Whenever we come out with a trade a question we get asked by the traditional fund managers is ‘Why is it making that trade?’ and they generally expect a very causal, A to B explanation, but that often defeats the point of these very complex algorithms. The middle ground is not good enough to just say that the algorithm says to do it, so we are doing it, but there needs to be more conversation between the quant people and more traditional people to understand there is a trade-off there.”

Saeed Amen, founder of trading consultancy Cuemacro and veteran of developed systematic trading strategies for Lehman Brothers and Nomura, extolled the virtues of simplicity when approaching the adoption of trading strategies based on machine learning technologies.

“The question to ask when you are thinking about using machine learning is: What are you trying to achieve, and can you use logistic regression or linear regression, for example, as sufficient for your task?” Amen said. “I would always try to go for the simplest tool necessary. There needs to be a rationale for the complexity involved in the trading strategy.”

Originally published September 13, 2018 by Thetradenews.com

SEC Seeks Software To Monitor Market-Moving Social-Media Posts

The SEC is seeking bids for a software tool that points out important and market moving social media posts.

While astute and savvy traders have known about the market moving power of social media for years now – many independent research shops, bloggers and company executives use Twitter frequently – it seems that only now is the Securities and Exchange Commission getting hip to social media’s close relationship with the stock market.

According to this write up at NextGov, the SEC is seeking a “out-of-the-box tool” that can monitor and flag posts that may have an effect on the financial markets. The description notes what the SEC is looking for:

“…a complete, web-based tool to scrape the major sites for keywords on relevant topics. When a keyword pops, the tool should send an email alerting the appropriate SEC staff.”

Last Thursday, the SEC issued a solicitation for such a tool. They reportedly wanted to spend under $27.5 million for a “finished product ready to use”. The article importantly pointed out that the SEC is “…NOT seeking sources for development of a new solution or customization of a product to acquire/add the required capabilities,” but rather it appears that they are seeking a finished product.

Of course, the most recent prominent example of social media having an effect on the stock market was Elon Musk’s famous go private Tweet, where he proclaimed that the company had “funding secured” for a bid to take itself private at $420 per share.

We reported last month that the SEC was probing whether or not Musk lied in his market moving Tweet.

“…the SEC has inquired with Tesla about Elon Musk’s announcement that he may take the company private ‘and whether his claim was factual’,” we stated last month.

The regulator also wanted to know why the disclosure, which kept people glued to Twitter for hours, was made on the social network rather than in a regulatory filing, and whether the firm believes the announcement complies with investor-protection rules.

The SEC is still in the midst of a formal investigation of Tesla, but it’s easy to make the assumption that this occurrence may be what has prompted this new software contract solicitation.

Nextgov.com pointed out that bid proposals for this solution were due to the SEC by 2PM on September 11.

Originally published by Zero Hedge Tue, 09/11/2018 – 20:25

Gold mine, or minefield? – Risk.net

“Global exchanges make millions of dollars packaging data about deals taking place across their markets. Data and related services made up a fifth of total exchange revenues last year – the second largest revenue generator behind trading, clearing and settlement services.”

 

Read the full article at: Risk.net

iSentium A Key Player In The AI Social Media Market Along With Microsoft, Google, IBM…

According to a report published by MarketsandMarkets™ (June 2018) iSentium makes the short list of Who’s Who in AI.

We are proud to be in such good company as we have earned it. We’ve been refining our NLP since 2008 and have 3 Patents that recognize and protect our differentiating technology.  To schedule a capabilities demo or answer any questions you may have, call (212) 858-9694.  Or send us an email at: inquiries@isentium.com.

About iSentium
Founded in 2008, iSentium uses patented Natural Language Processing (NLP) to extract sentiment from unstructured social content then instantly transforms it into highly actionable indicators in Finance, Brand Management and Politics. iSentium is proven in the market and is vetted by J.P. Morgan and NASDAQ.  iSentium’s management team brings a wealth of experience from both industry and academia with skills ranging from Big Data, finance, linguistics and signal processing. Our world-class team comprised of linguists, quants and computer scientists has collectively published over 200 papers and 18 books. Knowledge is power. Knowledge is alpha. Knowledge is Edge.

About MarketsandMarkets

MarketsandMarkets™ provides quantified B2B research on 30,000 high growth emerging opportunities/threats which will impact 70% to 80% of worldwide companies’ revenues. Currently servicing 7500 customers worldwide including 80% of global Fortune 1000 companies as clients. Almost 75,000 top officers across eight industries worldwide approach MarketsandMarkets™ for their painpoints around revenues decisions. Our 850 fulltime analyst and SMEs at MarketsandMarkets™ are tracking global high growth markets following the “Growth Engagement Model – GEM”. The GEM aims at proactive collaboration with the clients to identify new opportunities, identify most important customers, write “Attack, avoid and defend” strategies, identify sources of incremental revenues for both the company and its competitors. MarketsandMarkets™ now coming up with 1,500 MicroQuadrants (Positioning top players across leaders, emerging companies, innovators, strategic players) annually in high growth emerging segments. MarketsandMarkets™ is determined to benefit more than 10,000 companies this year for their revenue planning and help them take their innovations/disruptions early to the market by providing them research ahead of the curve. MarketsandMarkets’s™ flagship competitive intelligence and market research platform, “Knowledgestore” connects over 200,000 markets and entire value chains for deeper understanding of the unmet insights along with market sizing and forecasts of niche markets.

 

Wall Street, Hedge Funds Add Social Media to Research Menu

Wall Street is taking another step toward making social media as core to investment research as quarterly sales reports.

M Science LLC, which sells alternative data research to big hedge funds, said last week that it is acquiring TickerTags Inc., a social-media tracking firm startup based in Dallas.

Investment managers are increasingly looking to use technology to generate new trading ideas. Hedge funds in the U.S. and Europe now spend more than $170 million annually on so-called alternative data, according to a survey by Greenwich Associates.

Though small, this deal announced Friday is the latest in a string of consolidation among new financial data providers. Advanced Publications Inc. acquired 1010data, an alternative data provider, for $500 million in 2015. Kensho Technologies, which applies artificial intelligence to stock research, announced this year that it would be bought by S&P Global Inc. for $550 million.

M Science, which didn’t disclose terms of its latest purchase, is among the largest and oldest providers of alternative data reports to Wall Street, publishing company-specific notes based on Information such as purchase data, mobile app usage and web surveys of prices.

The business began as Majestic Research in 2002, before being acquired by Investment Technology Group Inc., and then by Jefferies Financial Group Inc. in 2016. M Science now has 115 employees, more than double the number in 2016.

So far, alternative data has mostly been based on things directly relevant to forecasting sales, including credit-card receipts and tracking the number of customers visiting a business, such as with satellite images of parking lots.

Startups like TickerTags have emerged to mine Twitter and other social media for a variety of signals, including news about public companies.PHOTO: RICHARD DREW/ASSOCIATED PRESS

More recently, a number of startups, such as TickerTags, Dataminr and iSentiumhave emerged to mine Twitter Inc. and other social media for a variety of signals, including news about public companies. Some firms and investors also measure market sentiment through social media.

Now forms of social monitoring are being directly integrated into research products already consumed by Wall Street. Goldman Sachs Group Inc., for example, sometimes includes measures of Twitter mentions in stock research reports.

TickerTags has compiled more than a million key words and phrases and mapped them to public companies for which they are relevant. It then monitors online discussions, including Google search terms, for those key words.

TickerTags hasn’t yet taken off as a product sold directly to funds. But Michael Marrale, chief executive at M Science, said that clients had asked him about trying to find a way to integrate the TickerTags system into M Science’s own data and reports on public and private companies.

Data is just a small part of the equation, said Mr. Marrale. “It’s how you map that data to public and private companies in ways you didn’t anticipate.”

For example, Newell Brands Inc.’s shares soared in May 2017 after it reported unusually strong sales of Elmer’s glue. The product is a key ingredient in slime, a gooey homemade toy that surged in social-media popularity last year.

TickerTags co-founder Chris Camillo said that the company’s system noticed a surge in the mention of “slime” in April, because it was often paired with mention of “Elmer’s,” and also “sold out,” all of which had been tagged as relevant to Newell stock.

Originally published June 4, 2018 by THE WALL STREET JOURNAL.

Thank You

MEMORIAL DAY: A MOMENT TO PRAISE, THINK AND REMEMBER

On Monday, May 28, we celebrate Memorial Day.

This is a day when we honor our military and our fallen heroes—brave men and women who fought and died so all of us can enjoy the freedom we too often take for granted.

Never Forget.

The world has changed dramatically in recent years, but Americans in uniform are still on duty doing all they can to preserve peace, balance and fairness in the world.

Of the 1.3 million men and women on active duty, more than 450,000 are stationed overseas, including many in perilous places where we do what no other country does: Afghanistan, Iraq, Syria, Somalia, Niger and more.

Memorial Day was originally called Decoration Day, a day that was set aside to decorate the graves of fallen Civil War soldiers. On the first Decoration Day, General James Garfield made a speech at Arlington National Cemetery, and 5,000 participants decorated the graves of the 20,000 Union and Confederate soldiers buried there.

Our nation has paid a steep price for the freedoms we enjoy.

Roughly 620,000 Americans died in the Civil War, making it the deadliest war in American history. Casualties of U.S.-involved conflicts include:

  • World War I: 116,516 American lives lost
  • World War II: 405,399
  • Korean War: 36,574
  • Vietnam: 58,220
  • Operation Desert Shield/Storm: 383
  • Operation Iraqi Freedom: 4,411
  • Operation New Dawn: 73
  • Operation Enduring Freedom: 2,346
  • Operation Freedom’s Sentinel: 48, as of May 2018
  • Operation Inherent Resolve: 61, as of May 2018

The names of some of those operations may be unfamiliar to you, but the meaning of the casualty figures becomes clear when you know:

The federal government has also used this holiday to honor non-veterans—the Lincoln Memorial, for example, was dedicated on Memorial Day 1922.

On December 28, 2000, President Bill Clinton signed the National Moment of Remembrance Act, designating 3 p.m. local time on Memorial Day as a National Moment of Remembrance.

More than 20 towns claim to be the holiday’s “birthplace”—but only one has federal recognition. In 1966, 100 years after the town of Waterloo, New York, held the first of many celebrations, President Lyndon Johnson signed legislation recently passed by Congress declaring Waterloo the “official” birthplace of Memorial Day.

Red poppies are often worn on Memorial Day. They are known as a symbol of remembrance, and it’s a tradition to wear them to honor those who died in war.

 

Since the late 1950’s on the Thursday just before Memorial Day, soldiers of the 3rd U.S. Infantry Regiment, the oldest active-duty infantry unit in the Army, place small American flags at each of the more than 260,000 gravestones at Arlington National Cemetery. A 24-hour patrol is conducted every day during the weekend to ensure that each flag remains standing. In 1951, the Boy Scouts and Cub Scouts of St. Louis began placing flags on the 150,000 graves at Jefferson Barracks National Cemetery as an annual Good Turn, a practice that continues to this day.

The American flag should be hung at half-staff until noon on Memorial Day, then raised to the top of the staff.

Permit us to wish you a great weekend. As we spend time with family and friends enjoying the great outdoors and warm weather, let us never forget the courageous men and women who have served and sacrificed so much so we could enjoy this holiday, just as we honor those who stand duty today to keep us safe.

On the battlefield, the military pledges to leave no soldier behind.

As a nation, let it be our pledge that when they return home,

We leave no veteran behind.

– Congressman Dan Lipinski of Illinois

 

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