Tech Innovation

Using Algorithms to Create News Out of Data in Sec Lending Market

Traders are increasingly relying on using computers -- and algorithms -- to develop high-speed complex trading strategies so why can't securities borrowing and lending experts do so.

A new alliance between Data Explorers and Chicago technology upstart Narrative Science apparently aims to to let them do just that. Data Explorers, well known for its data and benchmarks on securities lending and borrowing deals, says it will create editorial content in the securities borrowing and lending market using robo-journalists. Narrative Science's artificial intelligence system will simply take the raw data provided by Data Explorers to generate immediate stories, insightful business reports and tweets.

Launched in 2010, Narrative Science's authoring engine is based on algorithms developed by Northwestern University electrical engineering and computer science professors; the University's Medill School of Journalism fine-tuned the process. Initially writing game recap articles from sports statistics, Narrative Science has turned its attentions to business. Narrative Science claims that it doesn't want to replace reporters for indepth news analysis but can generate up to 20 percent of a newspaper's less complex content electronically; its latest client is Forbes.

How does it work? The platform will ingest data and look for inflection points. It identifies those points to build a collection of possible angles, which are ranked to create a structure. It can then generate up to 1,000 words of copy.

"Our global financial clients are sophisticated users of big data who also want to see stories revealed by the data," says Jonathan Morris, chief operating officer of Data Explorers in a statement. "Narrative Science will amplify the output to highlight really interesting stories about short selling and institutional investor holdings identified by the three million intraday transactions in our database."

Narrative Science isn't unique in its concept. MarketBrief also automatically converts filings with the Securities and Exchange Commission into stories, just seconds after they are released. Narrative Science claims that it can generate 20 percent of a newspaper's content. (This article and all those appearing on ISS-Mag.com were not written by a computer).

Written by Chris Kentouris, Editor-in-chief (Chris can be contacted through Chris.Kentouris@hotmail.com).

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