Automated Mobile Alerting Services - Towards A Level Playing Field In The Financial Community

Author: 

Jan Muntermann

Abstract: 

Prompt information processing is one critical factor for successful investments in volatile assets. Whereas web-based financial information systems have successfully contributed to improved information supply for private investors, mobile financial services still lead a shadowy existence. Therefore, this study examines the potential of mobile alerting services empowering private investors to react quickly to critical market events. The analysis of short-term (intraday) stock price movements can show the existence of abnormal returns following company announcements. As these effects persist for a timeframe of 23 minutes on average, a window of opportunity can be proven. To utilize these findings, the price effects are forecasted using a set of figures, metrics and an estimation function. As most of the price effect magnitude and effect delay can be estimated correctly, it is demonstrated how a suitable mobile notification model is able to combine a low level of user-intrusiveness with timely information supply. Furthermore, a prototypical financial notification system based on the proposed effect estimator and the notification model is presented. The approach illustrates how private investors can be notified in time and how to provide prompt decision support in order to enhance the information supply.

Key Word: 

Published Date: 

August, 2005

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