Reuters (RTRSY) is about to offer a product that will trade major news events for Wall St. firms. And, it will do the work while the traders are at lunch or sleeping. The new product will look at Reuters news, both past and present to set up trading programs based on specific events.
Reuters told The New York Times: “If an event breaks somewhere in the world, you want to be able to respond to that, or manage the event risks,” said Richard W. Brown, business manager for Reuters NewsScope, as the new program is being called. “At a very simplistic level it’s about speed.”
The problem with the system may be that news events often change quickly and news organizations revise stories and sometimes even reverse themselves when they find out that their reporting was mistaken. That could make for some fairly stupid and costly trades.
Of course, traders can blame the machine.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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