Ease of Access: SEC XBRL Filings

The world of financial statement analysis has undergone a dramatic change with the SEC’s Interactive Data requirement.   Effective June 2011, essentially all publicly traded companies “will provide their financial statements to the Commission and on their corporate Web sites in interactive data format using the eXtensible Business Reporting Language (XBRL)."  The SEC's goal in adopting this requirement is "to provide financial statement information in a form that is intended to improve its usefulness to investors. In this format, financial statement information could be downloaded directly into spreadsheets, analyzed in a variety of ways using commercial off-the-shelf software, and used within investment models in other software formats." (Source: sec.gov, Final Rule: Interactive Data to Improve Financial Reporting.)

At FTS, we have been busy bringing the power of the interactive data to our users.  Valuation Tutor now gives you immediate access, with easy search capability, to any interactive filing for companies traded on the major exchanges.  As of the time of this writing, over 9000 10-K's, 10-Q's, and 20-F's were accessible, and we expect to add roughly 5000 filings every quarter.  We are also exploring ways to provide access to filings in other countries, since our system is used in over 20 countries.

Market Microstructure

There are several different methods by which orders are submitted, displayed, and matched on real world exchanges.  There are usually three phases in a trading day: the time period before the market opens, the trading day during which the market is open, and then the time after the market closes.  Sometimes, different methods are used in each of the phases.  For example, many exchanges have a pre-opening call auction but continuous trading when the market opens.   There are variations even within each type.  For example, some exchanges display orders in the pre-opening call auction, some don’t.  Some display the “virtual price” (the volume maximizing price given current orders) and some don’t.  Some even have a random closing time.

The FTS Interactive Markets handle a wide range of mechanisms.  For example, you can run a pre-opening call auction followed by a continuous double auction.  You can run order-driven and quote-driven markets.  You can have competing dealers, who can or cannot trade for their own account.  You can even have traders who have to trade out of a position before they can trade for their own account.  You can hide or display the limit order book.  You can run a pure specialist market.  You can also have an “upstairs market.”

All the variations are listed at the link Microstructure treatments (the second part shows how you modify our trading cases to run a variation).  We also have pre-set cases that run through the variations.  Over the years, we have developed many cases for specific instructors; let us know if you want to modify a case.