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Peek ahead: Dazed by data

Published in Automated Trader Magazine Issue 27 Q4 2012

Peek Ahead grapples with a variety of topics, from sarcasm to cheese fondue to swords. For good measure, we've thrown in a handy guide to some of those troublesome acronyms.

Dazed by data

Yeah right, whatever

In the quest to grapple with unstructured data, Peek Ahead decided to do some sleuthing. Wikipedia describes unstructured data as 'not having a pre-defined data model'. The site cites Merrill Lynch back in 1998 as claiming that '80 percent of potentially usable business information originates in an unstructured form' - in and of itself a perfectly structured 80:20 rule.

Despite being adept at drawing logical and actionable conclusions from reading data, it transpires that these clever data interpretation models do have some points of weakness. They are flummoxed by any language containing sarcasm. Sexual innuendo, we expect, would be similarly problematic. So presumably an indication of interest offering to meet big blocks in the dark to find a match is incredibly confusing … Nice bid, shame about the offer … Yeah right, whatever.

From cheese to caipirinhas

The fondue rush to Switzerland has swamped Geneva to the extent that local politicians declared the city full. If Switzerland is full, where to next? BRIC? But of course, why not follow the Olympic road to Rio or Sao Paulo? Brazilian markets are opening up, rich natural resources offer commodity trading opportunities and connectivity links are going in. What of the tax? Perhaps not as appealing as some offshore centres, but with an upper level rate of 27 percent, getting in early to secure the best seats in the stadium may not be such a crazy idea after all.

Heads up!

For many of you in the algo world peering up to see the Damaclean sword of regulation hovering just above, it's understandable that you may be a little nervous. Debate abounds, generously sprinkled with references to deluges of orders, torrents of activity and blizzards of trades; all curiously choice expressions when discussing market liquidity. Should reactionary decisions prevail, perhaps arid, parched, desiccated liquidity may become the more common descriptions. Beware the oxymoron.

Talk is creep

Despite concerns of liquidity, trading scepticism and HFT debate, can it be that Peek Ahead has overheard some industry people talking positively about markets? To what degree can a good story talk up a turnaround? Or is this simply painting a false veneer? Cynics may consider veneer to be all it is. Others - maybe in desperation, maybe with intention - are encouraged. Is this is what we need to get us through to the end-of-year holidays - positivity to buoy liquidity?

Algobabble

We can't compete with the marketing genii who devised names such as Nighthawk, Crossfinder and Cobra, but Peek Ahead can offer a guide to a few of the lesser-known algos...

Crossmeet - matching algo designed to book a
meeting room

Taramasalata dip - algo that predicts impact of Greek economy on global market

Fuzzy logic trend filter - determines what to wear on dress down Friday after big night Thursday

And for the uninitiated, a guide to some of those confusing acronyms you keep seeing.

LOL - "Lots o' latency". Pejorative.

SNAFU - "Situation normal, arb finally unwound". To get out of a trade gone horribly wrong.

LMAO - "Left my algo on". Avoid. Can result in large losses.