NewsHedge is a Chicago-based FinTech development group that provides cost-effective, high-impact software solutions for the global financial community. NewsHedge is for anyone looking to make more informed trading decisions in a systematic or discretionary way. From hedge funds, banks, and risk desks, to market makers, day-traders and active investors, professionals are discovering that NewsHedge gives them deeper insight and a new perspective into real-time market events surrounding US equities. We had the pleasure of interviewing Kevin Evenhouse, the President & Founder of NewsHedge.

Q: . Kevin, can you tell us a bit about yourself and NewsHedge?

A: I began my professional career working for a few startups in the late '90s dot com era. When things dried up I switched gears and followed my passion for finance and trading. Just prior to starting NewsHedge, I owned a capital-management practice with trade operations conducted on the CME Group’s exchange floor. Over my finance career, I’ve had the pleasure of trading a wide range of financial instruments and strategies, including extensive experience building automated trading strategies.

NewsHedge originally came about in 2012 from our own need for actionable, event-detection technologies. Since then, NewsHedge has grown into a diverse team of experienced market professionals who have quietly helped many sophisticated electronic trading firms and quants react to market-moving events. We’ve also invented new methods for distributing financial information—see U.S. Patent No. 9,135,662.

Q: What made you want to start your own company and how has this company impacted your life?

A: I wanted to do something different within an area of finance I loved—trading. And do it where I wasn’t subject to someone else dictating each step of the way. Starting NewsHedge came from my passion and imagination for finding solutions to the financial industry’s biggest challenges—specifically extracting alpha from big data.

Bootstrapping any venture is challenging. It will push you to your limits. So far, it’s been fun, educational, and an overall rewarding experience.

Q: What makes your company different from others in your space?

A: Our event-detection methodologies differentiate us from the rest. Unlike other event-detection services, NewsHedge doesn’t rely solely on inefficient Natural Language Processing (NLP) technologies. We rely primarily on factual numerical trading data associated with an asset, then leverage NLP technologies (among other factors) as a secondary metric to help validate and add context to our signals. These combined methods help produce extremely clean data. Nobody does it like we do.

Q: Did you hit any roadblocks that made you want to quit? If so, how did you go about solving these problem(s)?

A: Yes, we hit many roadblocks early on. The three most painful roadblocks were: 1) navigating the gruelling process of patenting our intellectual property—luckily it paid off as we eventually received our patent grant on September 15, 2015; 2) turning several pages of notes into an algorithm that could spit out results as intended; and 3) educating prospective clients about our solutions to secure a few contracts for supporting our business.

It comes down to how fast you can problem-solve and move on. We try and leverage our agile, lean development principles throughout our organization.

Q:  Was it difficult to include machine learning technology into your software and do you plan to use any other advance features in the future?

A: Many of our machine-learning components took us many months to refine and implement. Sometimes you think something will work, and it does, but then several weeks later you find an “unknown” that you didn’t program for.

The most complicated component of our system is how we track 6,000+ individual assets, tick-by-tick, for unusual trading behavior. We had to build an extensive multilayered algorithm that could process myriad of data in real-time—specifically, cross-referencing real-time data with historical data found in multiple data sets so that our algorithms could learn and adjust for differing market conditions in a fully automated way.

Machine learning is only as good as the human programming it. My hat’s off to our CTO, Drew Dormann, who architected and oversaw each aspect of our system.

Regarding us adding other advanced features in the future: we’re continuously testing data hypotheses and seeking new ways to enhance our product offerings.

Q: NewsHedge currently offers two API’s, a Partner API and an Alpha API . Can you briefly explain the difference between the two? Also, do you guys plan on creating anymore in the future?

A: The NewsHedge Partner API allows enterprise applications—such as trading, news, or messaging solutions—to incorporate our high-quality actionable information into their client’s workflow. And the NewsHedge Alpha API allows quants and electronic trading firms to systematically react to our alerts.

We recently partnered with Metricle.com—a Twitter analytics company—to connect our market-moving alerts with contextual information found on Twitter. Because as you know, machines drive the markets when news breaks, and traders share information on Twitter when news breaks. The direct correlation between these two data sets allows our clients to systematically react to market-moving events with extremely high predictability. We’re receiving wide adoption from our current clients and positioning ourselves to support many new prospective clients in the coming months.

Q: You have recently partnered up with Metricle for their real-time context-curation technology. Are you looking for any partnerships in the future? If so, what types of partnerships are you looking for?

A: We’re always looking for new ways to help generate alpha for our clients, whether that be leveraging our own proprietary data or working with external partners who generate complementary data sets.

Right now, we believe there’s numerous opportunities for tapping into other outside data sets that can enrich our data, or vice versa. For example, we’ve found a high correlation between our data and data supplied from a leading machine-readable news and sentiment vendor. We’re currently working out the details for possibly combining the two data sets—ultimately bringing a smarter, more efficient product to market.

Q: What is a typical day like for you as the CEO and Founder of a start-up company?

A: We’re a small and growing company. I happily wear many hats. No two days are the same.

Normally, I’ll watch and trade the market open, respond to emails, reach out to prospective clients, juggle general NewsHedge related tasks, work out details surrounding new products and product ideas, and anything else that needs attending in between. There’s never a dull moment.

Q: What advice would you give to other entrepreneurs hoping to create something useful and start their own company?

A: In the beginning, you’ll be extremely optimistic and underestimate everything. It’s only natural. Try your best to be realistic. Make sure you have a mentor or someone with domain experience that can help you work out the realities you’ll be facing. And don’t go at it unless you can give 110%. You’ll be running a marathon which feels as though it has no finish line.

Q: Is there anything else you want to share with our audience?

A: We also support individual traders through our solution named NewsHedge Social.

NewsHedge Social is our free browser application service, and it’s designed for three specific purposes: 1) to showcase a portion of our technology; 2) to help professionals discover actionable trading events; and 3) to help drive real-time market-moving conversations happening on Twitter and StockTwits.

To register for a free complimentary account, go to newshedge.com and click on the “Products” tab.