5 Technologies That Can Change Stock Markets Forever

Improved Insight on Risk Undertaken

Disturbance in digital system has been making the financial markets more apparent, reachable and efficient. Besides this it also tends to help the regulators in getting an improved insight on the risks which the applicants may seem to undertake. The following technologies could transform the financial markets in the forthcoming days:

Artificial intelligence and natural language processing 

Several of the financial companies are adopting algorithms in doing the tasks which humans have been performing for years. Mechanism learning systems have been enhanced considerably and with expanding processor potentials at lower cost, these systems are made available for larger usage. The techniques for artificial intelligence enable the system to learn from user connections as well as patterns without the need of being openly programmed for the same.

Machine learning together with other artificial intelligence technologies, in the past few years, has provided us with self-driving cars, real-world speech recognition, chess champions as well as more related as well as realistic web-searches. With regards to financial markets, we have software analysing voice patterns of recorded calls at investment banks, brokerages and on the client side too which could instantly distinguish irregularities and frauds, It can also look at keywords, decode conversational encryption of information and achieve difficult searches on the recordings.

Robo Advisers 

From the present situation, there could be probabilities that we would be seeing the last few Wolves of Wall Street and Dalal Street and moving ahead we may have only robots of Wall Street and Dalal Street. Though the systems hasprogressed in grasping the monetary goals, risk profiles together with the other complex details of investment to come up with personalised investment portfolio, it could alter funds, book profits or square off position depending on self-learning processes. The platform could be either for web-based and/or smartphone based, thus enabling easy access or adapt.This is said to be self-operated without the need of the user talking to a live person. Compared to a human advisor who tends to charge a portfolio management fee, the services here are rendered at no recurring expense.

Quantum `sealed envelope’

Outrages centred on information theft have often been a nightmare for performers in financial markets. Till now, hackers have somehow achieved to stay ahead of security programs as well as passwords though it could change very soon. A team of researchers inGeneva, Singapore, Cambridge and Waterloo and Ontario had utilised the breakthroughspeculative work co-authored by Dr Adrian Kent from University of Cambridge’s Department of Applied Mathematics and Theoretical Physics in providing `unconditionally guaranteed’ security as well as purity of message transferred from any two points on earth. Earlier trials using these digital `sealed envelopes’ is said to be successful and if all goes well, the monetary markets would be entirelysecured against any threat of statistics invasion.

Bitcoin and Blockchain technologies 

The distributed ledger, Blockchain technology after the virtual currency Bitcoin, tends to record the financial transaction of any digital interaction in secured, transparent, traceable and in an efficient manner. So it is appropriate in providing a universal virtual currency as well as for digital accounting and auditing financial transaction of any kind. The possibility of Blockchain technology is understood from the fact that 30 of the largest banks in the world had recently formed a global consortium to research, design and build Blockchain solutions further. Besides this, the Reserve Bank of India – RBI that had issued a cautionary note in 2013, against Bitcoin had changed its stance. The Indian central bank is now of the belief that the Blockchain technology could be helpful in the prevention of counterfeiting currency as well as financial transactions.

Big data and analytics 

Financial markets tend to generate enormous amount of data each second. Storing and analysing these details on real time basis could be critical. With a combination of private as well as public cloud tends to resolve the issue of storage as well as real-time access to this multitude of data at reasonable charges. Big data analytics tend to make it likely to highlight correlations which seem incredible for humans to locate. For instance, envisage a situation where 90% of orders that are positioned on NSE and BSE through high-frequency algorithmic dealing platforms tend to abruptly get cancelled within a span of less than 30 seconds.

 A human may never have known such trends with so much accuracy; RBI had highlighted this trend last year and alerted the market regarding it. Such kind of analysis could never be done without leveraging technology for big data scrutiny. There could also be software which could analyse thousands of social media feeds regarding the sentiments and news of a company and could try to forecast future as well as probable sentiments regarding the company. These visions could change the way institutional as well as retail investor trade in the market. Though some of these technologies could be in its initial stage of development and may need substantial enhancement together with market interest, the base has been set for digital alteration.

Mining Stocks take a Toll Due To Plunge in Copper Prices

The concerns over the slowing global economy complimented with the excess supply saw a major slide in the prices of copper. The shares of coppers miners dipped low in the morning trade and future prices of the copper saw a major upheaval wherein tumbled down to a 5 year low. Wednesday drop is incidentally the sixth consecutive decline the copper prices and currently the copper are trading at $5,560 per ton. The sudden and steep decline in prices is causing a significant pain to major mining companies like FCX, Glencore and others whose stocks has taken a beat down by recording a massive low.

The Major Copper Producers Take A Hit

Freeport McMoRan Inc known as FCX which is the largest copper producer listed on stock exchange saw a massive decline of 9.5%. Freeport shares are now at trading at $19.05 which is its lowest registered price since April 2009. Even the other suppliers of the metals shared the same fate and fell considerably low. Glencore Plc (GLEN) which is the third largest producer saw a drop of 12% in London while the First Quantum Minerals fell by 27% in Toronto.

A Kazakhstan copper producer Kaz Minerals Plc (KAZ) also registered a fall by 23% in London while Vedanta Resources Plc (VED) which a giant producer of copper in Indian and Zambia fell by 20% followed by Antofagasta Plc (ANTO) registered a drop of 13%.

Drop In Copper Prices Raises Concern

Investors are keeping a keen interest in the fate of the copper prices which doesn’t seem to have any silver lining for the moment. This precious metal is characteristically referred as ‘Dr. Copper’ due to wide spread usage in various industries. Copper is the recent entrant in the club of commodities market which had registered a sharp plunge in its rates globally after the fall in the prices of the oil. Just like the oil, copper tend to have deep impact upon the world economy as it is key element for the phone lines, cables and other infrastructures. The world largest copper producers are in order of their production ability are Chile, Chiba, Peru, US and Australia.

The sudden and deliberate fall in copper price is a major concern and it is seen as a domino effect rising due to considerable rout in oil prices. It is now spreading to other commodities which include copper as well. This is also perplexing and points towards the imminent slowdown in global economy which is deeper than thought and certainly it wouldn’t be limited to energy market.

World Bank Shows A Slow Global Economic Forecast

Owing to the steep drop in prices of various commodities the World Bank has cut down its global economic growth forecast to just 3% from the 3.4%. The data of Wednesday even pointed out that the December retail sales had declined much more than expected earlier. The price fall in crude oil had made investors quite uneasy about holding on to the energy stocks and their shedding of those would inevitably lead to more losses in various commodities which includes coppers as well.

Stock market and Cyber attacks!

You probably agree with me that the stock market is not exactly a model in terms of evolution controlled. The New York Stock Exchange (NYSE) is the latest to have lived a chaotic Monday. The volume was low that day because of its 216 trading 3825 shares was suspended. Indeed, the motor trading Exchange not working properly. Trading engine seems to be something complicated. One can imagine that it might fail. But the boundary between technical complexity and incompetence is subtle. Transaction volumes and high frequency put more pressure than ever on the hardware that manages exchanges in the world. This is an arms race. And exchanges cannot keep. There is also the problem of attacks on the Exchange since places like 'Partisan' and 'Siberia'.

These are not real places of course. But it is logical that we highlight here. Anyone with a keyboard, modem and computer skills can target the stock market or individual for malicious purposes. A man has been jailed in Hong Kong for conducting an attack distributed denial of service (DSD) on the news website of the Stock Exchange of Hong Kong. DSD in an attack, the server maintains a website is overwhelmed by so many requests at the same time it stops. There was not any site. This was when ads are published sensitive price changes. The stunt Tse Man-lai was forced to stop the Exchange trading of eight titles including HSBC. You cannot have a regulated market where some investors have access to information that could affect the prices and other cannot. The attack was totally a publicity stunt because Tse runs a company of cyber security software product anti-DSD. He took screenshots of the website after the attack, hoping to use for future marketing campaign. Its purpose was to show how much damage an attack could cause DSD your business and the importance of having the right software protection.