A mouse clicks: the deal is done

The computer magic that created Jurassic Park is set to reshape broking, Charles Arthur finds

ON THE computer screen, a number of green and red objects - some shaped like bullets, others like peculiar ice-cream cones - seem to float against a blue grid. To the casual observer, they might look like new designs for vases or lampshades. John Osborne clicks the mouse button on one of the shapes, and it begins whirling around like a top. "Now if Barings had had this," he says, "they would have spotted Nick Leeson in no time."

Mr Osborne, a director of Fusion Systems in London, is promoting a new piece of software, one of an emerging category which could revolutionise broking and risk management. Instead of describing asset values and exposures with numbers, powerful computers can now render the information as three- dimensional pictures.

On another screen, lines assemble like armies under national flags. Above the lines, spines project up the screen, indicating the value of an asset. Russell Amer, of the computer consultancy Logica, moves the mouse pointer over the American flag and deftly manipulates it. "Now we see what happens if the dollar falls against the yen," he says. Some of the spines shrink, while over by the Japanese flag, others grow.

A number of software companies are seizing the chance to get into some of the biggest markets in the world. On the first screen described above, the width of the shape at any point indicates the value of that stock or bond at that point in time. Ice-cream cones are good news: they indicate stocks or bonds whose value has appreciated since they were bought. "Bullets" are bad news, since they indicate an asset whose value has fallen. The computer is programmed to change the shape's colour from green to red if the asset's value falls below its purchase value.

An asset's exposure to foreign exchange or bond price movements can be represented by how much it "spins". A well-hedged asset runs as smoothly as an axle; a badly positioned one like a child's top winding down. Software like this, argues Mr Osborne, could have let managers at Baring's get a quick view of the activities and exposures of all their traders. Mr Leeson's positions would have spun like drunks on a dance floor.

Even so, City asset managers are wary. "Certainly, a picture is worth a thousand words," says John Sharman, head of global bonds at Henderson Administration. "But I'm happy here to see the numbers in a spreadsheet which I can toggle along to find the information I want." But he finds even that a revelation, since at his previous employers, six months ago, he was working with pencil and paper to calculate exposures and liquidity.

However, the City is usually slow to accept new technologies. It seemed quite revolutionary when the Stock Exchange had its Big Bang in 1986, and market-makers could spot share price changes by the change in colour: blue for upwards movement, red for downwards. When the crash came in October 1987, traders referred to their screens "running with blood".

But computers can now do far more, far faster, with real-world data. "The surface of what this can do has hardly been scratch- ed," says Mr Amer, who is head of Logica's investment software division. "The problem before wasn't price. These financial companies can afford to buy this stuff - if it works and gives them an edge."

William Wright, head of Visible Decision, a company that has written some of the software to help visualise such data, says:"If you can show finance houses a solution to a problem, they will do anything to get it. And they love it if they're the only ones to have it."

Mr Amer is showing off a new software package written on a Silicon Graphics workstation, more commonly used for intensive applications such as digital retouching in films: if you have seen Jurassic Park or Terminator 2, you have seen what its computers can do with film. Now they want to do the same for finance.

Silicon Graphics is presently working on a project for the New York Stock Exchange to put the data that presently occupies more than 16 screens on to just two. Other buyers include the Bank of Nova Scotia, Chase Manhattan Bank and Lehman Brothers.

"You can do things with your portfolio that you couldn't with slower machines and static reports," says Mike Durland, Bank of Nova Scotia's general manager. "This visual representation really helps us see what's going on when we're working on hedging positions with securities."

Mr Osborne is sure that the market will take up these products, simply because it will start moving so fast that not thaving the latest software will mean risking losses.

"We can program this so that if you don't like the shape of one of your assets, or how it's spinning, then with just four clicks of your mouse you can liquidate the position. Traders want that. It's going to come."

News
scienceExcitement from alien hunters at 'evidence' of extraterrestrial life
Life and Style
Customers can get their caffeine fix on the move
food + drink
News
newsRyan Crighton goes in search of the capo dei capi
Extras
indybest

PROMOTED VIDEO
Arts and Entertainment
Actors front row from left, Jared Leto, Jennifer Lawrence, Meryl Streep, Ellen DeGeneres, Bradley Cooper, Peter Nyongío Jr., and, second row, from left, Channing Tatum, Julia Roberts, Kevin Spacey, Brad Pitt, Lupita Nyongío and Angelina Jolie as they pose for a
film
Sport
sport
Life and Style
techCould new invention save millions in healthcare bills?
Sport
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
Voices
A meteor streaks across the sky during the Perseid Meteor Shower at a wind farm near Bogdanci, south of Skopje, Macedonia, in the early hours of 13 August
voicesHagel and Dempsey were pure Hollywood. They only needed Tom Cruise, says Robert Fisk
News
peopleEnglishman managed quintessential Hollywood restaurant Chasen's
Life and Style
food + drinkHarrods launches gourmet food qualification for staff
Arts and Entertainment
Michael Flatley prepares to bid farewell to the West End stage
danceMichael Flatley hits West End for last time alongside Team GB World champion Alice Upcott
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Life and Style
Horst P Horst mid-fashion shoot in New York, 1949
fashionFar-reaching retrospective to celebrate Horst P Horst's six decades of creativity
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
i100
Life and Style
Black Ivory Coffee is made using beans plucked from elephants' waste after ingested by the animals
food + drinkFirm says it has created the "rarest" coffee in the world
Life and Style
news

As Voltaire once said, “Ice cream is exquisite. What a pity it isn’t illegal”

Life and Style
food + drinkThese simple recipes will have you refreshed within minutes
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Market Administrator (1st line Support, Bloomberg, Broker)

Negotiable: Harrington Starr: Market Administrator (1st line Support, Trade Fl...

Service Desk Analyst (Windows, Active Directory, ITIL, Reuter)

£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...

Data Support Analyst (Linux, Solaris, Windows Server, Reuters)

Negotiable: Harrington Starr: Data Support Analyst (Linux, Solaris, Windows Se...

Helpdesk Support Engineer (Windows, MS Office, Exchange)

Negotiable: Harrington Starr: Helpdesk Support Engineer (Windows, MS Office, E...

Day In a Page

All this talk of an ‘apocalyptic’ threat is simply childish

Robert Fisk: All this talk of an ‘apocalyptic’ threat is simply childish

Chuck Hagel and Martin Dempsey were pure Hollywood. They only needed Tom Cruise
Mafia Dons: is the Camorra in control of the Granite City?

Mafia Dons: is the Camorra in control of the Granite City?

So claims an EU report which points to the Italian Mob’s alleged grip on everything from public works to property
Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Once the poor relation, the awards show now has the top stars and boasts the best drama
What happens to African migrants once they land in Italy during the summer?

What happens to migrants once they land in Italy?

Memphis Barker follows their trail through southern Europe
French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

The ugly causeway is being dismantled, an elegant connection erected in its place. So everyone’s happy, right?
Frank Mugisha: Uganda's most outspoken gay rights activist on changing people's attitudes, coming out, and the threat of being attacked

Frank Mugisha: 'Coming out was a gradual process '

Uganda's most outspoken gay rights activist on changing people's attitudes, coming out, and the threat of being attacked
Radio 1 to hire 'YouTube-famous' vloggers to broadcast online

Radio 1’s new top ten

The ‘vloggers’ signed up to find twentysomething audience
David Abraham: Big ideas for the small screen

David Abraham: Big ideas for the small screen

A blistering attack on US influence on British television has lifted the savvy head of Channel 4 out of the shadows
Florence Knight's perfect picnic: Make the most of summer's last Bank Holiday weekend

Florence Knight's perfect picnic

Polpetto's head chef shares her favourite recipes from Iced Earl Grey tea to baked peaches, mascarpone & brown sugar meringues...
Horst P Horst: The fashion photography genius who inspired Madonna comes to the V&A

Horst P Horst comes to the V&A

The London's museum has delved into its archives to stage a far-reaching retrospective celebrating the photographer's six decades of creativity
Mark Hix recipes: Try our chef's summery soups for a real seasonal refresher

Mark Hix's summery soups

Soup isn’t just about comforting broths and steaming hot bowls...
Tim Sherwood column: 'It started as a three-horse race but turned into the Grand National'

Tim Sherwood column

I would have taken the Crystal Palace job if I’d been offered it soon after my interview... but the whole process dragged on so I had to pull out
Eden Hazard: Young, gifted... not yet perfect

Eden Hazard: Young, gifted... not yet perfect

Eden Hazard admits he is still below the level of Ronaldo and Messi but, after a breakthrough season, is ready to thrill Chelsea’s fans
Tim Howard: I’m an old dog. I don’t get too excited

Tim Howard: I’m an old dog. I don’t get too excited

The Everton and US goalkeeper was such a star at the World Cup that the President phoned to congratulate him... not that he knows what the fuss is all about
Match of the Day at 50: Show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition

Tom Peck on Match of the Day at 50

The show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition