Microsoft is set to break new ground in the realm of financial analytics, as revealed by the company’s CEO of Advertising and Web Services, Mikhail Parakhin. The company is testing an innovative feature for Microsoft Money that can infer the probability of future stock prices using option prices.
The announcement was made on Parakhin’s Twitter page and was met with a wave of excitement from investors and tech enthusiasts alike. Not only is this feature new, but according to Parakhin, it’s also not available on any free consumer tool. Microsoft Money is stepping up to fill this gap in the market and provide a unique service to investors and traders.
A new feature we're starting to flight: inferring the market's probability of future stock prices from option prices. This is not done by any free consumer tool yet, I think. Note how earnings calls increase uncertainty. pic.twitter.com/xqgumcHoPO
— Mikhail Parakhin (@MParakhin) June 27, 2023
At first glance, this feature appears to be a game-changer. By using option prices to anticipate the likely future price of stocks, Microsoft Money users will have a potent tool for forecasting the market. This becomes particularly intriguing around earnings call times when market uncertainty typically increases.
One user, Ken Schumacher, suggested mapping the earnings call. Parakhin, in response, agreed it was a “great idea.” Another user, Mohammed Adam, asked if the feature would be available by querying Bing Chat about a specific ticker. Parakhin responded, stating that the feature would be first introduced on MSN Money and later would be incorporated into the Bing Chat.
However, some concerns were raised by a user under the handle @no_ones_ghost. The user pointed out that put options tend to be overpriced, as they are commonly used as a form of insurance. This pricing structure can create a perception that negative outcomes are more probable than positive ones.
Parakhin agreed with the user’s insights but was quick to address the concern, stating that the Bing Finance feature will be adjusted for these effects. He highlighted that American Put options are indeed influenced by the early execution effect and that calls are affected by covered call writing. Microsoft Money has considered these elements, which adds to the sophistication of the tool and its potential usefulness to traders and investors.
The response to the announcement has been largely positive, with some users even suggesting paid versions of Bing Finance with enhanced features, such as future stock, commodities, and crypto predictions, along with a portfolio performance analyzer/predictor.
Parakhin’s announcement also led to questions about the anticipated image understanding feature, showing how keen the user base is for more innovative features from Bing.
As of now, there is no official launch date for the new feature, but the announcement has sparked significant interest among the online community. Microsoft Money’s pioneering approach to financial analytics is paving the way for a more data-driven, insightful experience for users, helping them navigate the often unpredictable world of stocks and shares. Watch this space for more updates about this intriguing feature.