I Feel, Therefore I Am

Although the quest for Artificial Intelligence (AI), equipping trading algorithms with human qualities such as self-learning, continues to fascinate, it will be the explosion of the Internet of Things that will soon re-energize trading in capital markets. The Internet of Things (IoT) is rapidly growing through the addition of sensors to machines that allow them to "feel." Once they are equipped with feelings-- particularly sight, sound and touch-- machines can behave more intelligently, for example optimizing operations to use less fuel or predicting when they need maintenance. However, an interesting side effect is that the data from the IoT could be a new source of "insider" data for trading firms. For example, if combine harvesters (accessorized with sensors) signal a bumper wheat cropin the U.S. grain belt, traders can take advantage of this information before the crop report is issued.