The Financial Times has a very interesting article about news pieces that are strictly being created for the benefit of machines that can pick them up and trade on them within milliseconds. This isn’t futuristic stuff, it’s happening right now and sources such as Bloomberg and Thomson Financial are leading the way:
“Computers are now being used to generate news stories about company earnings results or economic statistics as they are released. And this almost instantaneous information forms a direct feed into other computers, which trade on the news.”
As of now, this tactic is being used exlusively in the realm of mega-cap stocks and hedge funds but I wouldn’t be surprised to see this kind of technology makes its way into the small-cap world where, unlike the mega-cap space, the majority of investors don’t pour over every headline throughout the day. As such, the utility of such technology would hold even greater importance. I can tell you that I would jump all over this as an investor relations tool if machines were zoning in on the small/micro-cap space.
Thanks to Paul Kedrosky for highlighting the piece.
Best,
George