Computers in the Futures Industry
by William T. Taylor
The futures industry, like other investment-oriented industries, relies heavily on information. For years,
exchanges have used the computer for price recording and data gathering as well as for accounting.
Computer technology has brought price data to thousands of traders through various quotation services.
In fact, the computer can bring a trader so much data that there is virtually no way a human being could
possibly absorb the data and transform it into information in time to be useful.
Notice, I'm making a distinction between data and information here. Data are just prices, supply and
demand figures, production estimates, news items and so forth, that can affect the activity of the various
markets. information on the other hand, is produced by an orderly assimilation of the data, sorting out the
important from the irrelevant, and organizing it into some useful format.
The computer can help the trader accomplish the task of converting data into information, but not by
itself. Alone, the computer is nothing more than a machine, a piece of hardware. It is the programs or
software that instruct the computer how to perform its functions with great speed an accuracy,
transforming the barrage of data into usable information for the trader.
Until recently, the specialized software needed by the trader was not available for micro-computers. Only
traders with computer programming knowledge were able to use the power of computers, by developing
software for their own use. But gradually the market for software services began to grow, attracting the
talent necessary to develop programs and data services for the trader. As recently as five years ago, only a
handful of traders were using small microcomputers to assist them in trading. Now thousands of
individuals and firms all over the world are using this powerful tool.