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Markets

Bill Dague, Head of Data Science on Sourcing Alternative Market Data

Below is the transcript and video links for this recent TradeTalks conversation. Global Markets Reporter, Jill Malandrino interviewed Nasdaq's Head of Alternative Data, Bill Dague. The conversation provides and overview of alternative data, the challenges for the buyside to access and Nasdaq's solution, the Nasdaq's Analytics Hub .

To watch the Twitter Live video, click here or on the image below:

Jill: What is alternative data and why is it different than traditional data?

Bill: Alternative data is the data that is typically not found in financial analysis, so it is a broad catch-all term for all sorts of types of market data . Traditional data is data that relates to a company -- so stock price, the financials, but alt data relates to things that are important about the company but aren't captured by the traditional forms. For example, imagine you want to analyze a retail chain. You'd look at the typical financial numbers, you'd look at sales, how are they selling in certain geographic regions, etc. For alternative data, you would look at information such as satellite images, parking lot traffic or data like credit card receipts to get a better idea of what the sales numbers might be, even before other data provides the snaphshot of a company's performance.

Jill: What types of challenges to you see for firms as they try to navigate and manage alt data?

Bill: There's a lot. There is a challenge with almost every part of the alternative data landscape. First of all, sourcing the data. How do you find interesting content. There are hundreds if not thousands of providers of alternative data out there. How do you wade through that and find data content that will be your use case? Then when you find a source that is interesting, how do you make sure that it is valuable? How do you bring it into your systems, normalize it and clean it up and get it ready to use? Last of all, is achieving ROI for the data that you've purchased. Alt data tends to be very expensive and that whole process of bringing it it and analyzing it can also be very expensive. Getting enough value out of that data to be worth it is also a challenge. That's where the Nasdaq Analytics Hub comes in.

Jill: Then tell us about the Analytics Hub and who are some of our partners and who would want to use the Hub?

Bill: The Analytics Hub is Nasdaq's offering for alternative data and it is really geared toward the buy-side. We are looking at how can investors get more insight and leverage the content in our platform. We work with third party vendors who come and host content on our platform. We then take a look and determine how we can validate and vent this data and make certain it is useful and interesting and then present that to our customers.

Jill: How does this add value to the data that we host? Does it make it more manageable for the end user?

Bill: Absolutely, we do the work validating and venting the data. We perform back-tests and provide research around what the data is. We'll apply global asset identifiers. Then finally we apply our machine intelligence and analytical capabilities to find the right use case for the data. We help to structure that data so that it is usable.

Jill: Finally, are we at the exploration phase of what we can do with data?

Bill: Yes, I would say that we are pretty early on. There's been quite a bit of mushrooming of the content providers out there and we've seen it go from tens of hundreds to thousands now in a short amount of time. When you look at the integration into the investment workflow and the decision-making process especially on the buy-side in more fundamental focused firms, we have a long way to go.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.