All The News A Machine Can UseAll The News A Machine Can Use

Computers are great at making trading decisions based on tiny fluctuations in share prices. Decisions based on events, such as typhoons, coups d'état, and corporate shakeups, are more difficult. Enter Reuters with its machine-readable news feeds.

Called Reuters NewsScope, the product comes in two flavors: real time and archived. The real-time newswire lets subscribers scan live feeds from Reuters' global news coverage, monitoring for events that affect companies they're trading in. The archive lets the machines make sense of that information: When the tsunami devastated Southeast Asia in December 2004, for instance, here's how stocks X, Y, and Z moved.

"There's already an immense amount of content that explains price movements such as a stock split," explains Kirsti Suutari, global business manager for algorithmic trading at Reuters' enterprise trading division. "What's more difficult to do, on a machine-only basis, is to correlate price movements to something like Hurricane Katrina."

With NewsScope, high-frequency algorithmic traders such as major hedge funds can factor unpredictable events into their trading models, programming their computers to issue buy or sell orders in split seconds based on historical patterns. Because the news feeds are provided in a low-latency format, the machines can respond instantaneously. Subscriptions start at a few thousand dollars a month, according to Reuters, which has been offering the products for several months.

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