In the next five years, big data analysis is poised to become one of the most important and competitive skill sets around. Portfolio analysis in particular is where pension funds are focusing their big data investments. Big data is a set of techniques embedded in the latest, most sophisticated technologies: social media analytics, digital video recognition, 5G cellular technology and much more. The capabilities of big data are incredibly powerful and extend far beyond traditional systems. Supported as a spying technology in the World War II and later, the Cold War, core big data techniques were developed in the 1940s, 1960s and 1980s and areRead More →

By Irene Aldridge The history of Finance is full of Mathematical and technological revolutions. With the expansion of computer technology, mathematical innovations are not only abstractly interesting, but also very fast and profitable. Most recently, mathematical innovations in Finance first generated opportunities in quant techniques that were followed by the revolution of high-frequency trading, Now, the opportunity expands as Big Data techniques are implemented within Finance. Many people are still puzzled by what is so special about Big Data. After all, Econometrics and other data processing tools have been used in Finance for decades. It is true that Econometrics comprises a part of Big DataRead More →

By Irene Aldridge The word on the street is that no indicator is more reliable about one’s beliefs of future economic conditions than one’s trading activity. It is fascinating to observe institutional investor activity immediately before and after the announcement that the U.S. Senate has conditionally passed the proposed new tax law in the context of understanding the thoughts and beliefs of institutional investors as expressed by their often billion-dollar investing decisions. The new tax regime slashes corporate tax rates from 35% down to 21%, potentially resulting in direct increase in after-tax earnings, and, therefore, stock prices in 2018. From a cursory analysis, it wouldRead More →

This article first appeared in the European Financial Review, http://www.europeanfinancialreview.com/?p=17446 By Irene Aldridge With all the changes happening to the markets the past several years, author Irene Aldridge discusses how technology has significantly shaped the execution quality for portfolio managers. The article emphasises the realities of a data-driven industry wherein better information means better success.   Investment managers are increasingly concerned about the quality of their execution. Indeed, how you execute the orders in today’s markets may make or break investment profitability. Changes to the markets over the past several years place execution quality at the top the priority list for investment managers. Most ofRead More →

Real-Time Risk: Why we all need to study Big Data By PlanetCompliance, July 28, 2017 Everything changes. Financial Services. Markets. Risk. Technology and innovation transform an entire industry and if you want to survive, you need to change, too. In order to change though, a profound understanding of the new technologies is necessary. PlanetCompliance spoke to Irene Aldridge, the author of the bestseller “Real-Time Risk” about what investors and finance professionals need to know about Fintech and the way Big Data is transforming the world we live in. There are without doubt not enough women in finance. Not in traditional banking, nor in Fintech. However,Read More →

By Irene Aldridge Adapted from Real-Time Risk: What Investors Should Know About Fintech, High-Frequency Trading and Flash Crashes, by Irene Aldridge and Steve Krawciw (Wiley, 2017)   Recently, a frenzy to delay orders consumed exchanges. First came IEX, whose innovation was to delay all orders by 350 microseconds. Following IEX market share gains, reported here, many venues are competing to provide a similar offering to traders. This article looks at the mechanics of the delay and how it really helps trading venues gain market share, and at whose expense. In a nutshell, execution delay can be very risky and costly to investors. In all fairness,Read More →

Interview with Prof. Marco Avellaneda of NYU Courant, world-recognized expert in Financial Mathematics, Big Data, and Volatility, Quant of the Year, Chair of Big Data Finance Conference (May 19, 2017, NYU Center for Data Science, 60 5th Ave., New York, NY). In discussion with Irene Aldridge (IA), IA: What is new in data, and Big Data in particular, in comparison with last year? MA: This year, Big Data Finance is becoming very serious. More and more financial institutions are applying Big Data Analytics and Blockchain technology in the real world of finance. The three key trends pertaining to Blockchain that we observe are: 1) theRead More →

By Irene Aldridge Recent proclamations (see Forbes, ZeroHedge and others) that high-frequency trading in equities has become too competitive and unprofitable for many firms has prompted exits and fire sales of assets.  The recent mergers and consolidations in the HFT industry are indeed real.  And as described in our new book, “Real-Time Risk: What Investors Should Know About Fintech, High-Frequency Trading and Flash Crashes” (Wiley, 2017), the technologies required to successfully trade at high frequencies have indeed become increasingly sophisticated.  However, the reports of death of HFT may be highly premature.   Our firm, AbleMarkets, tracks the participation of a specific group of high-frequency tradingRead More →