What Use Is Financial Market Data?

To large financial institutions, financial market data is the lifeblood of the business. It is that important because predicting market changes can gain or lose massive amounts of money depending on how that market moves. Market analysts must leverage their enormous investment resources against small changes in market interest rates. As interest rates change daily, the value of these investments grow depending on how the money is managed. The investments can be made through minute changes in bond interest rates, penny drops or rises in stock prices, small changes in the exchange rate between currencies or even subtle changes in the value of the dollar compared to that of more precious metals like gold and silver. These investments create profit because each change in market value of the specific currency is multiplied by the enormous size of each individual investment. This happens whether that investment is from a pension fund or the savings of a large investor.

If the financial market data is not organized properly, the institutional investor can miss a single change in the market that can make the company millions simply by the volume being invested at the time. Many times, traders have misappropriated these funds or simply misunderstood a financial transaction resulting in a massive financial loss to the company. Computer triggers designed to facilitate this trading, as well as place automatic holds on any one trade, have failed in prior years, and cost large institutions vast amounts of capital. Such a loss has had devastating consequences not only on the investment resources, but also cost the jobs of corporate heads and the traders themselves. Worst of all, of course, is that the investment loss was a real loss to the shareholders' assets which may have had far greater effects on those investors than on the company employees themselves.

For these reasons, it is absolutely critical that the management of data for the purpose of investing shareholder funds be done with the greatest care and intent as lives can be at stake. This is why having large data experts work in concert with market financiers who can predict market changes fairly accurately in real time. Current software programs can enable this relationship to work efficiently, but it is never perfect. Human supervision is absolutely necessary as has been shown countless times when computer programs or simulations have broken down. The danger of losing such vast sums of money so quickly requires that market analysts maintain a constant vigilance over these programs.

Large data management is essential to the profit motive of institutional investors, but only when the proper market analysis has been completed.

at 11:32 PM
Back to Top