OTAS Bows Natural-Language Trading Report

UK-based analytics provider OTAS Technologies has extended its Lingo Suite of analytics tools with the release of Lingo for Microstructure, which produces intraday reports containing up-to-date analysis of all standout and unusual stock market activity.

The Lingo Suite, originally launched last June, encases the vendor’s Lingo natural-language reporting technology, and leverages the OTAS Core market intelligence platform to generate easy-to-interpret, on-demand analytical reports detailing calendar events and highlighting the most significant changes in price performance, short interest, options, credit, valuation, yield and technical factors, as well as recent director dealings.

The new on-demand Microstructure reports include the latest developments in the markets and their impact on users’ portfolios, allowing clients to keep up to date with market activity and make more informed risk management decisions, while also providing an audit trail of their activity, officials say.

Clients will have access to an intraday narrative on single stock behaviour to overlay with other transaction cost analysis metrics. Analysis will also cover all stocks in a trader’s universe, with a two-year record of daily stock behaviour.

Lingo for Microstructure is essentially “Lingo History” says Charlotte Wall, managing director and head of product sales at OTAS. It records on a daily basis what happened to individual stocks, and links this to a trader’s orders to provide an audit trail, and can be used to answer generic questions or provide a general narrative on the activities of every stock in a trader’s universe. Instead of having to “scramble together information and data” on something that happened to a trade months ago, traders can “click on that stock on that day, and immediately get a full narrative,” Wall says. “That’s very powerful… in a live trading environment, because you don’t normally have that information in one place.”

The reports are available to current OTAS clients and to users of trading systems vendor FlexTrade’s EMS platform—with which OTAS partnered last year—and a number of other third parties. Wall says the main appeal of partnering with Flextrade was its work with startup secure messaging provider Symphony. In February, FlexTrade integrated Symphony’s chat function to allow users to communicate and distribute content to portfolio managers and brokers directly from their trading blotter. Wall says Symphony works “very well with the Lingo narrative,” which is why they’re the first third party to gain access to it. “You can take the natural-language text and automatically be able to message that through to an end user without any human intervention… instead of having to write it out manually or copy and paste” she says.

Now that OTAS has begun to establish metrics around trade execution, it will continue to link Lingo to other products to create bespoke offerings, Wall says, adding that the vendor plans to take “a lot of the narrative and really analyze more trading behaviour in more depth. This could be to do with the schedules that are calculated in the market, it could be analyzing algos that exist and their behaviour that you can actually then write a narrative around.” This can then evolve into other products, such as intraday TCA, using the narrative to make TCA reports more robust, or more in-depth alerts on certain trades. “We also see requirements from regulators and… about market surveillance. When you have this type of audit trail and narrative, it becomes quite powerful for others to be able to have an insight without any human bias at any point in time, and to be able to reference that,” she says.