Opening Cross: Why Did the Chicken Cross the Road?
To trade on the other side, of course. No, I’m not giving up my day job. It’s not funny, but it is increasingly true—at least, if you substitute “traders” for “chicken” and “the world” for “the road,” because in this instance, the “other side” could mean the other side of the Hudson River (which separates ECN-turned-exchange Direct Edge from larger rival the New York Stock Exchange) or the other side of the world as traders increasingly look at emerging markets to deliver better returns.
But here’s why I bring up chickens: the chicken-egg debate. Which came first? A certain amount of chicken-egg debating always goes on before entering any new market: Is there sufficient demand? Is the market mature enough? Is it fast enough? Is it too fast, with no opportunities left to exploit? Is sufficient data available to support trading? And if not, how can we get the data? Over the years, a major barrier to trading in far-off regions was that collecting data on the market was a major undertaking. Firms wouldn’t trade without data, and vendors wouldn’t make the investment to add the data without demand from firms.
Over time, as international players expanded their coverage worldwide, including beyond the main market centers in a region to secondary markets—in part driven by firms wanting to exploit new regions and asset classes, a trend exacerbated by the financial crisis hitting Western economies much harder than their emerging counterparts in Asia and beyond, which thrived as established economies lost much of their luster—that tipping point moved, data became more easily accessible, and the egg dared the chicken to cross the road and compete on its home turf.
You can find a discussion of some of the ways that emerging markets are bringing their data to a wider audience through alliances and adoption of international standards elsewhere in this week’s issue, in the first of a series of longer, analysis pieces—the first of which covers this topic.
And now that these markets have broken out of their shell, they are looking for the chicken to bring some of its own data and tools across the road with it. For example, John Waanders, global head of Bloomberg Anywhere mobile, says the vendor was seeing particular demand from emerging market economies for its Bloomberg Anywhere app to be available on Android smartphones and tablets. This is hardly surprising, since Gartner last year predicted that Android devices will ship over a billion units and command almost half the smartphone market by 2015. And much of this demand appears to be coming from Asia, and China in particular, where Android is outstripping rivals.
Of course, Bloomberg isn’t the only vendor recognizing the need to respond to demand from Asian markets: Thomson Reuters has built a version of its Eikon desktop specifically for traders in China, with market-specific data, news, commentary and company data, Chinese-language content and displays, and an interface designed to support the different ways that Chinese-language text is displayed and read.
This is also one of the reasons for NYSE Technologies' alliance with on-demand data provider Xignite: to be able to provide its data to regions that don't have the infrastructure and connectivity to handle high-bandwidth direct exchange datafeeds, for website and mobile application developers.
Meanwhile, traders who want to expand not geographically but into non-listed markets, have faced similar challenges around obtaining data—almost impossible to find in less transparent markets overseas, and sometimes equally difficult to obtain in their home markets—on private companies. To address this—at least in the US—company data provider Edgar Online has allied with over-the-counter equities market OTC Markets to provide data on unlisted private companies and ADRs, to make it easier for traders to locate information on private companies and increase transparency and liquidity in the OTC marketplace.
So as all these datasets become more readily available, the strategies available to traders are becoming wider and more flexible, and they no longer have to choose between the chicken and egg of which strategy to implement, but can create their own scramble, and have it as liquid as they want.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
BNY doubles down on AI investments amid operating model overhaul
The bank’s CEO said he remains convinced of the potential of AI to enhance client offerings and increase the efficiency of employees.
The Waters Cooler: Drink wine and avoid talking to morons
UBS’ narrative alpha ML tool; SS&C fighting a ‘Frankenstein’ perception; why Citadel (and others) aren’t IPO’ing; and even more tape providers emerging. Lots to get to.
UBS embraces ‘narrative alpha’ with new NLP engine
The tool provides a new form of sentiment strategy that traces how stories spread, instead of counting words.
Waters Wavelength Ep. 291: Do you know enough to be dangerous?
Tony and Wei-Shen have a philosophical chat about what “being dangerous” means.
Icy attitudes on internal GenAI usage are thawing—and just in time
Waters Wrap: More and more banks and asset managers are publicly talking about how they are experimenting with generative AI. In the fight for talent, Anthony says this is a necessary step.
Banks must loosen up on ChatGPT use – risk chiefs
’Shadow use’ and inability to attract new hires mean restricting access to GPTs is untenable
Waters Wavelength Ep. 290: Nasdaq’s Valerie Bannert-Thurner
Nasdaq’s EVP and chief revenue officer for the financial technology division joins Nyela on the podcast.
Moral models: The ethics of data management
The IMD Wrap: You may be managing data efficiently, but are you managing it ethically? And is that something you should be concerned about? Yes, says Max, you should.