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flux[x] adventures - VIGIL

A geolocation based alert platform for professional traders

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Vigil – what it will be

/ “A real-time news alert system for Commodity, FX and Equities traders, mapping clusters of individuals describing unfolding unforeseen events, using Geolocation information within unstructured social data”

In other words…

/ Often “social sensors” (people who are Tweeting, or using Facebook / YouTube etc) talk about unforeseen events (terrorist attacks, earthquakes, political upsets, traffic jams, freak weather, riots, events involving public figures) earlier than traditional news organisations, a phenomena that can be exploited for trading advantage

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/ In 2011 we were involved with a large piece of social analytics research for a global ETF provider

/ During the course of that research we discovered evidence of commodity traders mining Twitter for alpha by following farmers and mining engineers

/ Further research validated the idea of piggybacking on this behaviour by creating a technology to facilitate and support it

Where did the idea come from?

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Why now?

/ Volume of data Social / environmental – significant rise in micro blogging (Twitter usage) and real time news

sharing (Facebook) Increase in academic research focused on social alert system since early 2011

/ Data & cloud affordability Full data “firehose” now available in manageable – and affordable chunks (GNIP and more

recently Datasift) Cloud & cheap compute – quantity of data (3,500+ tweets a second) requires large amounts of

storage and compute

/ Quality of data “Internet of things” – sensors in cars, road, buildings and on people will increase the richness of

the data we can use in the future The rise of smartphones has lead to a corresponding rise in geolocation information in social

data (around 5% and rising fast)

/ Finance community interest 3 years ago social data wasn’t taken seriously – now use of unstructured data & complex event

processing is seen by many as the new basis of a trading edge

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/ Geopolitical events• Working with a governmental client we

saw leading indicators spike after the  Tunisian "Burning Man“ incident, giving clear warning of the “Arab spring” and its impact on oil prices

/Natural disasters• In Japan, Tweets recorded seismic

activity 5 minutes, 40seconds before even the JMA (Japan’s official earthquake early warning system) identified it – saw a 7% fall in Toyota’s share price (amongst others)

/Celebrity news• In the case of Whitney Houston death,

Tweets reported the events 27 minutes before AP – lead to a 5% rise in Sony’s share price

Real Time Alerts Pre-empting News

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What will Vigil look like?

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Top line technical architecture

Datasift

Social networks

Firehose management

pCluster dB

Data reception – language, location and

temporal parse

VigilSystem

Keyword mng. & dynamic base

lining

API100,000 keywords

Account location lookup

“Firehose” >10,000 pieces of content a second

Content put into “holding”

pattern, awaiting

confirmation triggers

Cluster threshold is

achieved and alert is

delivered

Browser interface

Clienttrader

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Target Market

/ Core market Corporate traders, highly liquid and news sensitive

markets:/ FX / Commodities / Equities

Quant hedge funds/ Traders @ FS firms

/ Secondary market Independent professional traders

/ In trading categories (FX / Commodities / Equities)

Semi professional/ As a feed or app into spread betting platforms

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How we develop product – the lean methodology

/ Lean is a rapid, agile and cost effective way to test the key assumptions on which a new business rests

/ We don’t create a full version of a product first off/ Instead we build Minimum Viable Product (MVP) - a

controlled experiment into customer desirability/ When we have proof a product is desirable, feasible

and viable – then we move to formal production/ For an explanation of the process click here

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Beta testers

/ The lean approach relies on a proportion of beta tester being prepared to help develop products early on in their development in return for early access to new proprietary technology preferential rates the PR and marketing edge of being first

/ We will be working closely with beta testers asking for detailed feedback on what is working within the system – and what isn’t

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Vigil trials

/ A first version of the Vigil platform will be available late summer

/ The platform will be web based with alerts delivered via the browser and SMS

/ Clients who wish to use the system will be asked for a contribution to the hardware and data costs for their

implementation a 6 month contract providing rights to use the prototype corresponding commitment to provide feedback to the

Adventures team on the product

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Why you should get involved

/ Access to a platform that potentially offers a significant trading edge using data few people in the market currently use

/ Preferential rates on the system once the product is full fledged

/ The satisfaction of being involved, at the earliest possible stage, of a potentially ground-breaking piece of technology

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We hope you’ll join us as a beta customer

/ We will work exclusively with a single client in each asset class

/ All our work is covered under stringent confidentiality agreements

/ If you are a professional trader and would like to use the prototype of Vigil – then please drop me a line mark.bjornsgaard@fluxx.uk.com