In its new report Aite Group examines the rapid growth of unstructured data in trading strategies. It also profiles Dow Jones, Need to Know News and Thomson Reuters as vendors of unstructured data, and examines their offerings.
According to Aite Group in 2009 the firms will spend US$75 million for unstructured content used in algorithmic trading and US$141 million in 2011. The firms are increasingly incorporating new sets of unstructured data into their trading strategies to either enhance or circumvent electronic trading’s technology race.
Unstructured data is information not traditionally read or interpreted by computers to make decisions, and includes news, SEC filings and Web content. This data is now receiving the necessary structure and/or context to be leveraged by algorithmic trading.
“While few firms currently use unstructured data in their electronic trading strategies, Aite Group anticipates solid growth in this area, despite – or even because of – current market conditions,” says Adam Honor, senior analyst and author of this report, Aite Group. “Firms will be looking for any competitive advantage they can find, and unstructured data offers an untapped reservoir of new ideas waiting to be discovered.”
L.D.