Consider the service, called Thomson Reuters News Analytics (TRNA), as a testament to how far we've seen social media expand beyond its original "what's up, where I am, what I like" personal use. Social media's impact is not lost on the financial markets, which have seen "a dramatic rise in the volume and influence of industry blogs, social-networking and commentary Websites," Thomson Reuters noted in a press release announcing the service.
"Investment firms are embracing new data, tools and techniques to help make sense of the massive amounts of unstructured data available on the Internet," said Rich Brown, head of quantitative and event-driven trading solutions at Thomson Reuters, in an official statement. "When properly analyzed and understood, this data can complement a firm's trading and investment strategies and give it a competitive edge.
"This launch will give investors additional capabilities to gauge stock, sector, and market sentiment, and to translate these emerging sources of market insight into data that can be incorporated into both quantitative strategies and as a way to provide a broader context to human analysts."
In other words, this isn't just about reading the news any longer. It's about interpreting it.
Thomson Reuters' machine-readable historical and structured news feeds typically integrate with algorithmic trading systems plus risk management and decision management systems. Now, with TRNA along for the ride, comes "sentiment, relevance, and novelty indicators that capture market opinion," the company says.
For the service, Thomson Reuters uses information delivered by Moreover Technologies, an aggregator of global news and social media. News Analytics provides access to as many as 50,000 news sites and 4 million social media sites. It's available for deployment or via Elektron, Thomsom Reuters' hosted high-performance data and trading infrastructure.
The TRNA engine, powered by Lexalytics text analytics technology, can scan and analyze stories on thousands of companies in real-time and make the results available for quantitative processes. The result, Thomson Reuters notes, is "buy/hold/sell signals within milliseconds."
Plus, it promises, the service will track news sentiment over time for broader, historical perspective on a company's market reputation.
As investment firms and other financial companies seek ways to account for social sentiments in their analysis, having a known player in their corner will no doubt give them some much needed comfort. Wouldn't you agree?