Wednesday, September 10, 2008

Automated Trading and CEP on News Feeds

Something for us all to think about if we ever use automated news in systematic trading or CEP.

Wall Street Journal article here.

“The damage was exacerbated by the growing use on Wall Street of automated programs that trigger stock trades without any human interaction,”

This caused a drop of $1B in the market share of United Airlines.

I wonder if the sentiment engines (like Reuters Sentiment, SemLab, Corpora) would have caught this?

©2008 Marc Adler - All Rights Reserved.
All opinions here are personal, and have no relation to my employer.

1 comment:

Josh Kunken said...

If the dramatic drop in UAL share price is indeed a consequence of automated trading, it is a surprise something like this took this long to finally occur. Highly unlikely it was solely automated trading that led to such a substantial drop, but it sheds light on how easy it could be for anyone to "hack" things for personal financial gain or otherwise, just by fiddling with web-based news stories. The trickle down effect could be devastating.