Learn how top Wall Street funds catch market moving events
With the rise of High-Frequency Trading, Market Makers, and Systematic Strategies, some investment professionals believe that there is no alpha to be found in short-term market volatility. They anchor their strategies in fundamental analysis, reacting only to long-term market adjustments. However, a new class of event monitoring solutions is emerging, narrowing the gap between discretionary investment and robo-trading.
In this article, we will explore the emergence of a new breed of event and risk monitoring systems, their deployment at the world’s most successful hedge funds, and how investment professionals from smaller operations can compete without massive resource expenditures.
Traditional discretionary trading relies on compiling a holistic market overview and reacting to new press releases, revenue reports, KPIs, expansion announcements, and other relevant signals. Ticker coverage is distributed among analysts responsible for timely report checks. However, since subscription services, RSS feeds, and Bloomberg cannot capture everything, time becomes the most limited resource. Consequently, analysts must compromise between the breadth of their coverage and the timeliness of manual report checks.
The competition for alpha is intense. The most successful hedge funds deploy specialized solutions to automate the manual process of tracking report updates. These tools enable analysts to cover more ground while reducing delays significantly. Being first certainly pays off.
Major players establish specialized intelligence departments to manage report alerts for investment teams. While this strategic capacity enhances their competitive edge, it comes at the cost of maintaining a dedicated team of professionals, who are in short supply.
Continuous data monitoring requires specialized tools. The first step is sourcing data directly from websites. While fetching content might seem straightforward, challenges such as bot detection, CAPTCHAs, and website instability can arise.
The second step involves parsing the acquired content from various formats, including HTML, XML, PDF, Excel, JPG images, or even audio/video files. A robust ETL (Extract, Transform, Load) skillset is essential.
The final step is detecting changes and dispatching alerts via internal systems (e.g., Email, Symphony, Slack). Managing alert criteria and evolving distribution lists is a complex yet critical task.
Surprisingly, the investment industry lacks a targeted, comprehensive event and risk monitoring solution. Through our experience working with top Wall Street funds, we identified this gap and founded Hermes Intelligence’s Event and Risk Monitoring division.
Our mission is to democratize what only the biggest funds can afford and bring it to investment professionals at firms of all sizes—regardless of strategy, geographic focus, or capital managed. We believe cutting-edge event monitoring should be accessible to everyone.
Join us in our mission!
Begin by assembling a collection of data source links you want to monitor. Classify and group them for efficient management. Define the specific sections of each website that are relevant to your investment strategy.
Choose an in-house, vendor-provided, or off-the-shelf solution for alert collection. Carefully weigh the pros and cons of each approach.
Run your monitoring tools continuously and proactively address any issues. Regularly refine and expand your strategy to align with changes in your investment process. Ensure swift resolution of any technical problems.
Visit our website: Hermes Intelligence to explore how we can enhance your investment process.
Contact us today for a consultation and discover how we can transform your event monitoring into a competitive advantage.
We look forward to partnering with you in navigating the data-driven future.
Operations Manager
Hermes Intelligence Team
LinkedIn Profile: Albion Begaj
