Markets Media 04/20/11
Tick data analysis and investor sentiment data are being combined to place retail and institutional investors on a level playing field with large sellside institutions.
Penson Financial Services Inc. (PFSI), the U.S. securities clearing unit of Penson Worldwide, has teamed with Titan Trading Analytics, whose TickAnalyst algorithms analyze historical equities tick data and social media sentiment to generate buy and sell recommendations, to make the service available to Penson’s retail and institutional correspondent brokerage firms.
The agreement enables Penson’s retail brokers to provide customers with quantitative trading signals that incorporate social media sentiment.
“It allows our correspondents access to a sophisticated research tool providing trading ideas that typically is only available proprietarily to the largest banks and funds,” Sean Malloy, senior vice president at Penson Worldwide, told Markets Media.
The service puts PFSI’s correspondents on a level footing with sellside institutions, which have traditionally possessed the know-how and financial resources to develop such algorithms. Recommendations can be streamed via PFSI’s API or Titan’s browser application; orders can be electronically executed through PFSI’s FIX Gateway.
“What Titan has developed over the last five years is extremely difficult and costly for most non-bulge bracket firms to leverage,” John Coulter, president and CEO of Titan Trading Analytics, told Markets Media. “”As the amount of data continues to grow into the billions of data points a day, alpha generation becomes more and more challenging for the average trader; we are breaking down a huge barrier to entry by hosting hard-to-obtain research and technology which to date, only elite brokers and hedge funds have leveraged to their advantage.”
Titan, whose data center contains terabytes of tick data and unstructured data in the form of machine readable news and social media sentiment, runs ten behavioral Trading Models which are effective in all market conditions.
“The models are designed to simultaneously monitor real-time tick data and identify historical matches on up to eight different time series,” Coulter said. “When conditions are ideal–less than 0.5 percent off all the data the system scrutinizes–Titan’s Trade Recommendation Engine streams a signal to either our own TickAnalyst Web client or via an API to any existing trading system.”