News Analytics for Electronic Trading

In an article “Sentimental education” published in the The Trade, Issue 24, April to June 2010, Professor Gautam Mitra, Director of OptiRisk Systems, was interviewed and argued that “ News data can give alternative investment managers advantages of speed, scope and better risk control than models driven purely by market data. Portfolio models essentially can take more factors into account and respond more reliably with this additional perspective to drive correlations. The usage of news in trading is likely to grow for both low and high-latency strategies.” 

Professor Mitra’s view is based on the OptiRisk Systems Publication “News Analytics in Finance Handbook”, which will be published by John Wiley in 2010. In this handbook, Professor Gautam Mitra and Dr. Leela Mitra reviewed the news analytics and its applications in finance in the first chapter, in particular the multiple facets of current research and some of the major categories of applications. It is widely recognised news plays a key role in financial markets. The sources and volumes of news continue to grow. New technologies that enable automatic or semi-automatic news collection, extraction, aggregation and categorisation are emerging. Further machine learning techniques can be used to process the textual input of news stories to determine quantitative sentiment scores. Various types of news available and how these can be processed to form inputs to financial models are considered. Applications of news, for prediction of abnormal returns, for trading strategies, for diagnostic applications as well as the use of news for risk control are also reported in this review chapter.

To download the content page of this handbook, please click  Download Contents page.