algorithms take control of wall street

Quote from 'Algorithms Take Control of Wall Street'

Dow Jones launched a new service called Lexicon, which sends real-time financial news to professional investors. This in itself is not surprising. The company behind The Wall Street Journal and Dow Jones Newswires made its name by publishing the kind of news that moves the stock market. But many of the professional investors subscribing to Lexicon arent humantheyre algorithms, the lines of code that govern an increasing amount of global trading activityand they dont read news the way humans do. They dont need their information delivered in the form of a story or even in sentences. They just want datathe hard, actionable information that those words represent.

Lexicon packages the news in a way that its robo-clients can understand. It scans every Dow Jones story in real time, looking for textual clues that might indicate how investors should feel about a stock. It then sends that information in machine-readable form to its algorithmic subscribers, which can parse it further, using the resulting data to inform their own investing decisions. Lexicon has helped automate the process of reading the news, drawing insight from it, and using that information to buy or sell a stock. The machines arent there just to crunch numbers anymore; theyre now making the decisions.

Link to the article

http://www.wired.com/magazine/2010/12/ff_ai_flashtrading/all/1