The win in the best alliance or partnership category goes to FlexTrade and Dataminr and it’s easy to see why, as the alliance ticks two important boxes: big data and artificial intelligence (AI).
In September 2017, FlexTrade—which also won the best sell-side automated trading platform award—announced that it was teaming up with Dataminr to create a global macro news alert feed within the FlexTRADER execution management system (EMS). Dataminr’s platform uses machine-learning techniques to filter through approximately 500 million public tweets on Twitter. It breaks these tweets into categories such as financial services, geopolitical commentary and market insights. Within their Dataminr accounts, traders can create customized watchlists. From there, alerts are generated based on the traders’ criteria and these alerts are fed into FlexTRADER in real time. These alerts can then be used to automatically trigger actions and be coupled with information from other data sources. The framework also identifies deviations from a trade plan so that a trader may change course when necessary.
As an example of the global macro news feed in action, on September 23, 2017, reports were circulated by CNBC that Tesla was working with Advanced Micro Devices (AMD) to manufacture an AI chip for self-driving cars. The platform produced an alert at 3:53 pm EST when AMD was trading at $13.18. By 4:15 pm EST, the stock had risen by 4.2 percent and in after-hours trading jumped to a price increase of 10.9 percent from the original Dataminr alert.
For traders who have orders in the EMS who are employing an algo-driven strategy over the day, if a Dataminr alert comes in that indicates that a significant change in price might be coming, it alerts the user and can automatically pull or replace the order without any human intervention.
FlexTrade reviewed a number of different social media aggregation platforms—some of which use proprietary sentiment analysis and AI to infer which tweets are most relevant and might have a direct impact on price, according to a spokesperson. “There are plenty out there at varying degrees of maturity, but what struck us about Dataminr was their unique partnership with Twitter and robust analysis and screening tools to provide actionable intelligence into the blotter, rather than noise,” says the spokesperson.
Data analytics and AI have been popular drivers for winners in this category. Last year, Nasdaq and AI specialist Digital Reasoning won this award thanks to improvements made to Nasdaq’s Smarts trade surveillance platform with the incorporation of Digital Reasoning’s machine-learning tools.
The founder and CEO of Imperative Execution looks at how trade execution is changing and what that means for the buy side.Subscribe to Weekly Wrap emails