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Wolfram Alpha and mathematical finance May 20, 2009

Posted by James Webster in : web, finance , add a comment

Wolfram Alpha has been released to a mixed response; some people have been overly critical (plenty of discussion indexed by Techmeme), but us geeks undeniably love the idea even if the implementation is a little flakey; I’ve seen plenty of ’server too busy’ type messages, it renders horribly in IE6 (don’t ask…) and I’m not so keen on the use of images to render the text. Clearly the latter is to defeat screen scraping (some people have said they have seen the text in the ALT tags, but I’ve not encountered that myself) but maybe a technique like sIFR would be a better approach (without using the replacement text side of sIFR). I’m not sure how it will be monetised, or even if Wolfram plans to monetise it although it can’t be cheap to run. Possibly a paid API is waiting in the wings?

I’m impressed with the results of ticker queries, especially when combining multiple tickers; e.g. GOOG, AAPL, MSFT. I am even more impressed with the results for the following queries: ‘black scholes’ brings up a basic option pricer with all the parameters you might expect (’option’ and ‘option valuation’ also return an identical result) plus a standard payoff diagram, first-order greeks, a ladder for different strikes, all sorts of neat graphs showing the relationship between the greeks and other input parameters PLUS a little bit on how to statically hedge the option. Other searches such as ‘butterfly option’ or ’straddle option’ show the payoffs from these option strategies. I thought that ‘AAPL option’ might show the option series available for AAPL (or any other stock for that matter) but it looks like there is still work to be done there. Trying queries for more exotic types of options (e.g. asian, barrier, basket) was not successful. Still, it is definitely possible to see how this might evolve to compete in some small way with Bloomberg’s analytic tools as I commented upon last month (in that post I also mentioned Stocktwits; they have recently raised capital in a VC 1st round and are planning a premium version).

Continuing my EC2 theme from yesterday, there was talk from Wolfram at the end of last year that Mathematica would be available in some way on EC2, probably as a pay-per-use AMI. Although there was plenty of press coverage at the time (indexed by Wolfram here, search page for Cloud Computing) it still hasn’t been released as far as I can see… I wonder how Alpha will overlap with any Mathematica-on-EC2 offering.

On the topic of Mathematica, Patrick Collison has an interesting blog post about combining Mathematica with the Google Analytics API.

EC2 scale May 19, 2009

Posted by James Webster in : web, virtualization , add a comment

Amazon released a number of new APIs for the EC2 cloud computing service yesterday, all designed around making it even easier to scale up your cloud in response to an increase in load or incoming traffic and simplifying distributing this load evenly across the cloud; CloudWatch, Auto Scaling and Elastic Load Balancing. Between these APIs and Canonical adding support for Eucalyptus (an open-source implementation of the EC2 API for running private clouds that can be scaled to EC2 if required) to Ubuntu, I find it hard to view Windows as a serious server operating system for cloud-style applications. Hopefully Microsoft will get a competitor widely released (and at a low cost of entry) soon; either that or Mono improves the server performance of their CLR implementation!

The Long Decline of Bloomberg? April 29, 2009

Posted by James Webster in : finance , add a comment

There seems to be a theme running around the financial/technology blogosphere at the moment, namely that there are a number of trends and startups potentially threatening the hegemony of Bloomberg and its eponymous terminal.

Etrading asks: Wolfram Alpha: another nail in Bloomberg’s coffin? and speculates that with a few key features (most notably availability of financial data) the hotly anticipated ‘analytical search engine’ could be a serious challenger to the charting/analytics tool sets in Bloomberg.

Zerobeta states: Bloomberg Needs to be Less Swiss Army Knife and More Leatherman and makes an argument that Bloomberg should focus on its core competency, financial journalism, embrace an open access approach to its data and allow an ecosystem to evolve around its platform.

Techcrunch reported on the launch of SkyGrid a financial news aggregator. Even their design (white text on black) looks suspiciously like Bloomberg.

Clearly the scope, depth and market penetration of Bloomberg far outreaches any of these potential competitors (plus others such as StockTwits and Chart.ly). Still with Bloomberg charging fees as high as it does (described as absurd by Zerobeta) and the competitive landscape continuously changing underneath it they will have to keep innovating (and to be fair, their iPhone app is great) to keep their dominant position.