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Trade The News – Profiting From Trading With Low Latency News Feeds

Experienced traders recognize the effects of global changes on Foreign Exchange (Forex/FX) markets, stock markets and futures markets. Factors such as interest rate decisions, inflation, retail sales, unemployment, industrial productions, consumer confidence surveys, business sentiment surveys, trade balance and manufacturing surveys affect currency movement. While traders could monitor this information manually using traditional news sources, profiting from automated or algorithmic trading utilizing low latency news feeds is an often more predictable and effective trading method that can increase profitability while reducing risk.

The faster a trader can receive economic news, analyze the data, make decisions, apply risk management models and execute trades, the more profitable they can become. Automated traders are generally more successful than manual traders because the automation will use a tested rules-based trading strategy that employs money management and risk management techniques. The strategy will process trends, analyze data and execute trades faster than a human with no emotion. In order to take advantage of the low latency news feeds it is essential to have the right low latency news feed provider, have a proper trading strategy and the correct network infrastructure to ensure the fastest possible latency to the news source in order to beat the competition on order entries and fills or execution.

How Do Low Latency News Feeds Work?

Low latency news feeds provide key economic data to sophisticated market participants for whom speed is a top priority. While the rest of the world receives economic news through aggregated news feeds, bureau services or mass media such as news web sites, radio or television low latency news traders count on lightning fast delivery of key economic releases. These include jobs figures, inflation data, and manufacturing indexes, directly from the Bureau of Labor Statistics, Commerce Department, and the Treasury Press Room in a machine-readable feed that is optimized for algorithmic traders.

One method of controlling the release of news is an embargo. After the embargo is lifted for news event, reporters enter the release data into electronic format which is immediately distributed in a proprietary binary format. The data is sent over private networks to several distribution points near various large cities around the world. In order to receive the news data as quickly as possible, it is essential that a trader use a valid low latency news provider that has invested heavily in technology infrastructure. Embargoed data is requested by a source not to be published before a certain date and time or unless certain conditions have been met. The media is given advanced notice in order to prepare for the release.

News agencies also have reporters in sealed Government press rooms during a defined lock-up period. Lock-up data periods simply regulate the release of all news data so that every news outlet releases it simultaneously. This can be done in two ways: “Finger push” and “Switch Release” are used to regulate the release.

News feeds feature economic and corporate news that influence trading activity worldwide. Economic indicators are used to facilitate trading decisions. The news is fed into an algorithm that parses, consolidates, analyzes and makes trading recommendations based upon the news. The algorithms can filter the news, produce indicators and help traders make split-second decisions to avoid substantial losses.

Automated software trading programs enable faster trading decisions. Decisions made in microseconds may equate to a significant edge in the market.

News is a good indicator of the volatility of a market and if you trade the news, opportunities will present themselves. Traders tend to overreact when a news report is released, and under-react when there is very little news. Machine readable news provides historical data through archives that enable traders to back test price movements against specific economic indicators.

Each country releases important economic news during certain times of the day. Advanced traders analyze and execute trades almost instantaneously when the announcement is made. Instantaneous analysis is made possible through automated trading with low latency news feed. Automated trading can play a part of a trader’s risk management and loss avoidance strategy. With automated trading, historical back tests and algorithms are utilized to select optimal entry and exit points.

Traders must know when the data will be released to know when to monitor the market. For instance, important economic data in the United States is released between 8:30 AM and 10:00 AM EST. Canada releases information between 7:00 AM and 8:30 AM. Since currencies span the globe, traders may always find a market that is open and ready for trading.

A SAMPLE of Major Economic Indicators
Consumer Price Index
Employment Cost Index
Employment Situation
Producer Price Index
Productivity and Costs
Real Earnings
U.S. Import and Export Prices
Employment & Unemployment

Where Do You Put Your Servers? Important Geographic Locations for algorithmic trading Strategies

The majority of investors that trade the news seek to have their algorithmic trading platforms hosted as close as possible to news source and the execution venue as possible. General distribution locations for low latency news feed providers include globally: New York, Washington DC, Chicago and London.

The ideal locations to place your servers are in well-connected datacenters that allow you to directly connect your network or servers to the actually news feed source and execution venue. There must be a balance of distance and latency between both. You need to be close enough to the news in order to act upon the releases however, close enough to the broker or exchange to get your order in ahead of the masses looking for the best fill.

Low Latency News Feed Providers

Thomson Reuters uses proprietary, state of the art technology to produce a low latency news feed. The news feed is designed specifically for applications and is machine readable. Streaming XML broadcast is used to produce full text and metadata to ensure that investors never miss an event.

Another Thomson Reuters news feed features macro-economic events, natural disasters and violence in the country. An analysis of the news is released. When the category reaches a threshold, the investor’s trading and risk management system is notified to trigger an entry or exit point from the market. Thomson Reuters has a unique edge on global news compared to other providers being one of the most respected business news agencies in the world if not the most respected outside of the United States. They have the advantage of including global Reuters News to their feed in addition to third-party newswires and Economic data for both the United States and Europe. The University of Michigan Survey of Consumers report is also another major news event and releases data twice monthly. Thomson Reuters has exclusive media rights to The University of Michigan data.

Other low latency news providers include: Need to Know News, Dow Jones News and Rapidata which we will discuss further when they make information regarding their services more available.

Examples of News Affecting the Markets

A news feed may indicate a change in the unemployment rate. For the sake of the scenario, unemployment rates will show a positive change. Historical analysis may show that the change is not due to seasonal effects. News feeds show that buyer confidence is increasing due the decrease in unemployment rates. Reports provide a strong indication that the unemployment rate will remain low.

With this information, analysis may indicate that traders should short the USD. The algorithm may determine that the USD/JPY pair would yield the most profits. An automatic trade would be executed when the target is reached, and the trade will be on auto-pilot until completion.

The dollar could continue to fall despite reports of unemployment improvement provided from the news feed. Investors must keep in mind that multiple factors affect the movement of the United States Dollar. The unemployment rate may drop, but the overall economy may not improve. If larger investors do not change their perception of the dollar, then the dollar may continue to fall.

The big players will typically make their decisions prior to most of the retail or smaller traders. Big player decisions may affect the market in an unexpected way. If the decision is made on only information from the unemployment, the assumption will be incorrect. Non-directional bias assumes that any major news about a country will create a trading opportunity. Directional-bias trading accounts for all possible economic indicators including responses from major market players.

Trading The News – The Bottom Line

News moves the markets and if you trade the news, you can capitalize. There are very few of us that can argue against that fact. There is no doubt that the trader receiving news data ahead of the curve has the edge on getting a solid short-term trade on momentum trade in various markets whether FX, Equities or Futures. The cost of low latency infrastructure has dropped over the past few years making it possible to subscribe to a low latency news feed and receive the data from the source giving a tremendous edge over traders watching television, the Internet, radio or standard news feeds. In a market driven by large banks and hedge funds, low latency news feeds certainly give the big company edge to even individual traders.

News programmes have suddenly become hot property and are vying for attention with other popular programmes telecast in different channels. All major television broadcasters are including at least one news channel to their bouquet. The biggest headache for launching a satellite channel is programme software for round the clock. In this juncture, newsgathering is a major task for the 24-hour news channels. To cater this task, the emerging electronic channels have always made an attempt to cover all the incidents irrespective of position, location and time. These channels not only revolutionized the concept of news on Indian television but also changed the news formats. Before 1990s, Doordarshan had monopolized newscast on Indian television and also turned the news programs into a dowdy exercise. Now the private channels made the news an essential commodity like food, cloth and shelter. The strong point of all today’s news bulletins is their topicality, objectivity, glossy editing and high-quality visuals. News has traveled a long way from the DD era. From Local events to International events, breaking news to news analysis, television soap to page3 news, every happening comes under purview of news. In this article, we have covered some significant changes in news broadcasting in India before and after the Gulf War.

Indian Television – Flash Back

Television in India is undergoing significant changes in the current liberalized environment. To understand these changes, one needs to have some brief idea of the road covered by the television channels so far. The journey started as an experimental basis with a financial grant from UNESCO in 15th September 1959. The makeshift studio at Akashvani Bhavan in New Delhi was chosen for location of the experiment. The experiment started with one-hour program, broadcast twice a week, on community health, citizen rights, education and traffic sense etc. As far as news is concerned, it was launched exactly six years after the inception of television broadcasting. Daily one-hour program with a news bulletin was served to the Indian viewers. But one major drawback of television was that you could not enjoy the original colour of the objects because of black and white transmission. First multi-color programme was the Prime Minister’s address to the nation from Red Fort in Delhi on India’s 35th Independence Day. In the same day, DD National channel was launched. The aim of launching the National channel is nurturing national integration, and inculcating a sense of pride in Indians. Indian viewers also enjoyed the colored version of the Asian Games hosted by New Delhi in their drawing room. The coverage of major events and different occasions lend a big hand behind the infiltration of television signals to the nook and corners of the subcontinent. Indian Government had taken all possible steps to expand the television broadcasting demographically and geographically. In 1983 television signals were available to just 28% of the population, this had doubled by the end of 1985 and by 1990 over 90% of the population had access to television signals. In 1984, DD Metro channel was added to provide an exclusive entertainment for the urban viewers. In the beginning, this channel was confined to metropolitan cities.
As a public broadcaster, Doordarshan presented the news in naturalized manner. All controversial issues were pushed under the carpet. The ruling government had a strong hold on the television broadcasting. Doordarshan news bulletins were unable to provide the international news to the national viewers. Objectivity had been the first casualty as news was invariably slanted to suit the party in power. The news was liberated from the confines of the DD newsroom and gained in objectivity and credibility when New Delhi Television (NDTV) produced ‘The World This Week’ in 1988. Everyone was waiting for the Friday night to watch ‘The World This Week’. This was the only India-based programme, which looked out at the rest of the world. The World This Week was the best current affairs programme on the international scenario and carried good stuff of news, which the regular DD news was failed to carry out. This program is ranked as one of the country’s finest and most popular television shows. In 1989, NDTV produces India’s first live televised coverage of the country’s general elections. The critical and commercial success of the coverage sets a new standard for Indian television. After the Gulf War the media panorama has changed forever.

Golf War – The Catalyst

Post-1990 satellite television in India has become transnational in nature. It coincided with the entry of multinational companies in the Indian markets under the Government policy of privatization. International satellite television was introduced in India by CNN through its coverage of the Gulf War in 1991. In August 1991, Richard Li launched Star Plus, the first satellite channel beamed the signal to Indian subcontinent. Subhash Chandra’s Zee TV appeared in October 1992. It is India’s first privately owned Hindi channel to cater the interest of Indian viewers. This ignition followed by Sony and a little later by domestic channels such as Eenadu, Asianet and Sun TV. Entertainment programs had begun to occupy center stage in the organization’s programming strategies and advertising had come to be main source of funding. Doordarshan’s earlier mandate to aid in the process of social and economic development had clearly been diluted. Doordarshan had faced a stiff competition in news and public affairs programming with international channels like BBC and CNN. Doordarshan planned to sell some slots for news programme under sponsored category. In February 1995, NDTV becomes the country’s first private producer of the national news ‘News Tonight’, which aired on the country’s government-owned Doordarshan set a new landmark for Indian television because of its on-the-spot reporting with pertinent visuals. In the same year, TV Today Network occupied a 20 minutes slot in DD Metro channel and aired a Hindi and current affairs programme ‘Aaj Tak’. This programme became popular for its comprehensive coverage and unique style presentation by Late S. P. Singh. Still we remembered the sign-up message “Ye Thi Khabar Aaj Tak, Intizar. Kijiye Kal Tak”. Large number of viewers across India had been watching Aaj Tak as a daily habit because of its innovative style of news presentation. Besides that Nalini Singh’s five-minute fast paced, condensed daily news capsule Ankhon Dekhi, TV Today Network’s Business Aaj Tak and Newstrack was aired on the Metro channel of Doordarshan. This is the period when satellite channels concentrated on entertainment programmes for their respective channels. Doordarshan was still ruled the most wanted area ‘news’.

Major Players

Doordarshan’s monopoly was broken in 1992, when private television channels infiltrated into the Indian boundaries and entertain the viewers as much as possible. In the beginning of 1990s, the private channels offered only entertainment programmes. The entertainment programs include family drama, comedy serials, children programmes, cartoons, movies, talk shows, recipe shows, musical concerts, non-fiction programmes etc. Private entertainment channels added some infortainment programmes to their Fixed Point Charts (FPC). Keeping the demand of infotainment programmes in mind, the media houses started to produce news magazines, entertainment magazines and news programmes for different channels. India’s premier business and consumer news broadcaster and a leading media content provider, Television Eighteen India Limited (TV18) started India’s first ever entertainment magazine ‘The India Show’ on Star Plus in 1993. This emerging media powerhouse provided prime time television content to almost all leading satellite channels in India including BBC, Star Plus, Sony Entertainment Television, Zee, MTV and Discovery. After The India Show, TV18 produced a weekly business news program India Business Report for BBC World. Indian viewers had very limited options (like public service broadcaster Doordarshan, BBC and CNN) for watching the television news. For televised news, the viewers had to watch Dordarshan and some international news channels like BBC or CNN. In this race to provide more news, more information, Zee Television jumped into the battlefield by launching the news channel Zee News in 1995. This News and current affairs channel revolutionized the way news was delivered to the viewers. Since its inception Zee News has endeavoured to be the fastest to provide news, working towards a single goal of Sabse Pahle (Always First). The other round-the-clock news channel, the Murdoch-owned Star TV beamed its exclusively 24-hour news channels, Star News in 1998. Star made a contract of five year with Prannoy Roy-owned NDTV (New Delhi Television Company) to provide news content for this news channel.
The untiring exhaustive coverage of the Kargil war between India and Pakistan gained more publicity and attracted more viewers towards the electronic channel. This televised conflict also sets a news benchmark for wartime journalism. During the Kargil war, common citizens witnessed how their brave Jawans fought despite in hostile conditions and watched the war front live by the exclusively news channels, Star-TV and Zee-News. The live coverage of the battlefield helped to create a euphoria of patriotism among the Indian masses, which later facilitated into collecting huge funds for the welfare of the families of Kargil martyrs. Every news programme draws the attention of large number of viewers but Kargil war attracts private broadcasters to invest more money in the broadcasting business by launching a news channel. In November 1999, TV18 entered into a 49:51 joint venture with CNBC Asia to launch CNBC India. TV18 is the sole program provider to CNBC India, and produces 12 hours of local content per day on this 24-hour satellite channel.
After the huge success of news programme ‘Aaj Tak’, TV Today group launched a 24-hour Hindi news channel with the same name ‘Aaj Tak’, in December 2000, which covers India with insight, courage and plenty of local flavour. Within 11 months of its launch, Aaj Tak emerged as India’s number one news channel and was awarded Best News Channel award from Indian Television Academy Awards. Some mega events apart from regular interesting items (such as Kandhahar hijack, September 11 attacks, Afghanistan war, attack on Parliament, Iraq war, Godhra carnage and riots) have driven up the viewership. As time passed, NDTV’s five years contract with Star group for outsourcing of news and related programming expired on March 2003. With the expiry NDTV forayed into broadcasting business by simultaneously launching two 24-hour news channels; NDTV 24X7 – English news channel and NDTV India – Hindi news channel, which targets the Indian diaspora across the world. News crazy Indians received more news at faster speed from different channels. Any unusual happening can be caught by the television camera anywhere form Rastrapati Bhawan to bedroom. The power of TV journalism was become more visible by the major sting operations like Operation West End and Shakti Kapoor Case. This style of investigative journalism has brought about a change in the way we look at news, amidst new notions of editorial freedom. The world’s largest family ‘Sahara India Parivar’ launched a 24-hour national Hindi news channel, Sahara Samay, in March 28, 2003. It is the first ever city-centric satellite news channels covering 31 cities in India with their own city news bulletins. Keeping the demand of news in mind, the Union cabinet approved the proposal to convert the DD Metro to DD news in a meeting held on 3 October 2003. Consequent to these decisions, DD-News channel was launched on 3 November 2003. You might have noticed that the news channels are language specific. But DD’s news channel contains the round the clock news bulletins in Hindi/ English are also telecast twice a day on the National Network of DD National.
‘Aap Ki Adalat’ fame Rajat Sharma, Sohaib Ilyasi, the man behind the highly successful ‘India’s Most Wanted’ and Taun Tejpal, editor-in-chief of Tehelka roped together and launched a free-to-air Hindi news and current affairs channel India TV on May 20, 2004. Indian viewers had more expectations from this channel. The much-awaited news channel hopes to set itself apart from the existing ones by setting new benchmarks of responsible journalism. Speaking on the occasion of the launch, Rajat Sharma, chairman, India TV, said, “We aim to change the way broadcast news reporting is being conducted in the country. India TV will set new benchmarks by maintaining international standards of responsible and credible news reporting. We will stay away from graphic depictions of violence and sensationalism of news. We will uphold the viewer’s right to correct information and their right to truth and verity. India TV is not just a news channel, it is a movement.” NDTV as a pioneer in Indian television news, set to create a fresh revolution in high-quality business news with the launch of NDTV Profit. NDTV launched this 24-hour business channel on January 17th, 2005.
There is no saturation point in launching of news channel, just booming like sky as the limit. Entertainment channel to infotainment channel, infotainment channel to news channel, news channels to business channel and Business channel to lots more. Now the satellite channels become more topicality with international standard. When we are talking about topicality, CNBC TV18, the only business channel, continues to be the medium of choice for India’s decision makers, affluent audiences across the country since 1999. It has set the pace for the growth in number of television channels by launching a 24-hour consumer channel in Hindi called ‘ Awaaz’. This news channel focusses on empowering consumers on decision-making related to investment, saving and spending. All the programmes are catering to consumers across different walks of life, which included personal finance; variety of markets including commodity, stocks, savings etc.; small businesses; education & career guidance; and verticals like health, shopping etc.
Another news channel was finally launched into the already cluttered news space in Indian television. Jagran TV Pvt Limited’s news channel, Channel 7 up-linked to the air on 27 March 2005. The channel has been set up to cater to the vast Hindi-speaking audiences, already being targeted by a slew of news channels. Channel 7 developed every programme with a bid to cater to all types of audiences and not just pre-dominantly male audiences who get attracted towards news channels.

Regional Leaders

To cater the interest among the Indians, Doordarshan televises programmes in Hindi and associate Official languages. It has launched a number of Regional Language Satellite Channels (DD – 4 to DD – 11 and DD – 13) and telecast programmes in Assamese, Bengali, Gujarati, Malayalam, Marathi, Kannada, Telugu, Kashmiri, Oriya and Tamil. The Regional channels relayed by all terrestrial transmitters in the state and additional programmes in the Regional Language in prime time and non-prime time available only through cable operators. The Doordarshan regional satellite channels telecast major news programme with some entertainment programmes.
If you think about the private regional channels, they have followed the path of the Big brother (i.e Doordarshan). They are neither completely entertainment channel nor exclusively news channel. They are following the middle path and claiming themselves an infotainment channels. The private channels televise through the state dominant languages. Rising advertising revenues and increasing numbers of viewers have provided the impetus for many big players to enter into the business. Some regional media leaders like ETV, Sun TV, Asianet have a strong grip over the regional market. Some major players tried their luck in different states. Zee television has three regional channels; Zee Marathi, Zee Punjabi and Zee Bangla. Star Network entered into Tamilnadu by launching Star Vijay, one of the most popular entertainment channels in India broadcasting in Tamil. Besides that ETV Network is a part of the well-established Ramoji Group, has created 12 dedicated infotainment regional channels. ETV network is the source of rich entertainment of eight different languages. Those are: Telugu, Bangla, Marathi, Kannada, Oriya, Gujarati, Urdu; and Hindi to viewers in Uttar Pradesh, Rajasthan, Bihar and Madhya Pradesh. Every ETV Network channel focuses exclusively on its audience’s unique cultural identity, its aspirations and its distinct socio-political character. Let us think about the south Indian language Telugu, there are around twelve satellite channels are roaming around the sky with different taste and different flavour. These channels include three news channels, one song-based channels and rest are infotainment channels. When we confine ourselves into news, three channels (ETV2, TV 9 and Teja News) exclusively devoted to news programmes.
Sahara India Pariwar is proud to have five news channels as the bouquet of Sahara Samay. These channels are: Sahara Samay NCR, Sahara Samay Mumbai, Sahara Samay Bihar & Jharkhand, Sahara Samay Madhya Pradesh & Chattisgarh, and Sahara Samay Uttar Pradesh & Uttranchal. Sahara Samay has already managed to gain a loyal audience in India through a bouquet of National & Regional News Channels since its launch. These channels are youthful and vibrant channels targeting students and women, besides that hardcore news stuff. The regional news channels covers the entire spectrum of genre with specific programs on lifestyle, fashion, food, shopping, health and fitness, sports, education, career and city issues, besides giving user-friendly information on traffic updates, city events, train and air timings, etc. Now national news channels cannot confine its boundary to national level. They cannot ignore the regional news because of the stiff competition form the regional cannels. Regional news channels are entering into the competition with a strong will power and also with an aim to portrait regional issues in national and international level.

Conclusion

Now the television industry becomes more specific. In this competitive market, channels are targeting specific viewers. News channels attract more viewers beyond their target by producing interactive and interesting programmes. Every channel needs to do an extensive research on different concepts and different themes to attract more viewers and in the same time more advertisers. After all, advertisements are the bread and butter for the channels. With increased consumer preference for news programmes, television news channels have grown faster than other niche channels. News channels are booming just like sky as the limit. Those days are not far away, when we will get satellite news channel for every major city in India. Staying in abroad, we can update ourselves about all the happening of our hometown. Now news is not restricted to political happenings. It will be extended its limit to every unwanted and hided corners of the society. At last we can reach in the conclusion that anything, which is strange or disgusting, is news. There are no rigid rules, which defines news.

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