Survey: 45% Of Managers Have Lost Money Or Missed Trades Because Of Bad Event Data

Sep 13 2017 | 9:36pm ET

Nearly half of institutional investors have lost money or missed a trade because of incorrect or incomplete corporate event information, according to a new survey from alternative data provider Wall Street Horizon, with 40% experiencing five-figure losses on single trades.

The survey, which was conducted August 17-23, polled more than 100 institutional market participants, nearly two-thirds of which were quantitative or discretionary fund managers, Wall Street Horizon said in a statement. 

Key findings from the survey included the following: 

  • 45% of respondents reported losses or missed a trading opportunity due to an incorrect event date. 40% of those who lost money said the loss was in excess of $10,000 on a single trade; multiple respondents reported losses exceeding $1 million. 
  • An overwhelming majority of respondents would like to know when an event changes – both for alerting and back-testing purposes. Currently no event data vendors provide this capability for tracked events beyond earnings. An equal number of respondents (40% each) indicated they want event change notifications for competitive monitoring purposes and for tracking companies they care about. 
  • Speed is not a significant challenge when it comes to event data tracking. Instead, the vast majority of the poll’s respondents noted difficulty in finding data (42%) or inaccurate data (38%) as their primary struggles. 
  • Only 12% of respondents believe that the event data they consume is “very accurate,” while 54% believe their event provider’s data is “somewhat accurate.”
  • Earnings release dates remain the event type utilized by most respondents, at 82%, but investor conference dates (65%), buyback dates (52%), dividend payment dates (52%) and shareholder meetings (36%) are growing in importance.

“The ability to know precisely when events move is functionality that investors and traders are increasingly demanding, which makes sense given the importance of this data to alpha,” said Wall Street Horizon CEO Barry Star in the statement. “Based on the survey results and conversations with dozens of institutional participants, we see this capability as the holy grail for event data, and we’re actively working to incorporate it into the Wall Street Horizon offering.”

Founded in 2003 and based outside Boston, Wall Street Horizon provides institutional investors and traders with comprehensive information and data about corporate events such as earnings dates, dividend dates, options expiration dates, splits and investor conferences.


In Depth

Q&A: Star Mountain's Brett Hickey On Investing In 'The Growth Engine Of America'

Sep 22 2017 | 5:06pm ET

Lower middle-market companies form the economic fabric of the nation, but they can...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Don’t Overlook These 6 Hybrid Cloud Concerns

Sep 14 2017 | 6:27pm ET

Cloud-based technology solutions have made tremendous inroads into the alternative...

 

From the current issue of

Business Insider has been reporting on the unusual trading activity of a mystery trader who placed a profitable short equity bet to the tune of $21 million on the Aug. 10 move in the CBOE Volatility Index (VIX).