Imagine even GOOGLE in in the HFT GAME ,read this old article 2010 ! Google’s state-of-the-art trading floor
Sent from somewhere but not me?
Google’s state-of-the-art trading floor
by Karma on September 9, 2010
The search company has now started its own trading floor, to manage their internal cash reserve of around $26.5 billion. Google currently has the 3rd largest cash reserves of any company, after Microsoft and Cisco.
The trading floor at Google opened up in January this year. The investment team has more than 30 members, with head Callinicos, who has been with Google since 2007, when he left Microsoft. Since then Google’s cash reserves have steadily risen from $11 billion to the present level. The trading floor is located in the company head quarters itself. Many of the new arrivals are former Wall Streeters who left lucrative careers at Goldman Sachs (GS), JPMorgan Chase (JPM), and other banks.
Brent Callinicos has made good use of the software engineers available at Google to build special software through which their complex operations can be monitored and easily accessed. This software allows them to monitor 98% of their holdings in real-time, while most institutions can monitor only 60 to 70% of their positions in real-time.
Callinicos has now decided to go in for a high risk, high return style of investment. The corporate debt securities have gone up from $695 million a year ago to $4.9 billion on March 31. Agency residential mortgage backed securities have also risen from $60 million to $3.3 billion in the same period.
So what’s so special about this old news?
Google has the power and capability to predict investor’s behavior. Google can predict flu-like illnesses within 92% accuracy of CDC data which is derived from laboratory testing http://pagingdrgupta.blogs.cnn.com/2010/05/18/how-accurate-is-google-flu-trends/. Google has the capacity to monitor search behavior of it’s users, which has everyone on their list. They can have enough data point to estimate whether the market is over-priced or under-priced based on the user’s searches.
It’s taken the World Wide Web by storm. It’s mapped out every streetcorner in America. It’s even been named one of the most powerful brands in the world – repeatedly.
Google has added to it’s capacity by investing in a startup company that claims it can predict the future. The Google Ventures portfolio says the company, Recorded Future, “offers customers new ways to analyze the past, present and the predicted future.” On its site, the Massachusetts-based Recorded Future says the process works by using data analysis to look at the popularity of people or things in the news and on the Internet. By analyzing trends of past behavior, they then try to predict future actions.
“In computing the momentum value, we take into account the volume of news around an entity or event, as well as what sources it is mentioned in, what other events and entities it is mentioned together with, and several other factors,” one blog on the Recorded Future site reads. This momentum value can then “be analyzed using statistical methods to predict possible future changes in momentum.
Sources: Articles from Bloomberg Businessweek.
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