Every trade that prints on the tape, the running public record of executed trades, is a brief moment of agreement. A buyer and a seller, each holding a view about a business's future cash flows and what those are worth today, converged just enough to transact at a number.
A price is what happens when buyers and sellers stop arguing for a moment and agree on a number.
That is glib, but it is close to true, and taking it seriously is where systematic trading starts. The level of a price reflects a weighted average of every view willing to act on it, tilted toward the side with more capital and more conviction. A change in price reflects a change in that weighted average.
So the useful question is never "why did the stock move?" in the abstract. It is: what, specifically, can change the average?
What Moves the Number
Only two things.
The first is a change in disclosed information: something entered the public record that was not there before. The second is a change in expectation: the market changed what it is willing to pay for the parts of the future that have not been disclosed yet.
Every price move you will ever see is one of these two, or a blend. The distinction sounds academic. It is actually the dividing line between what you can trade systematically and what you cannot, so we will take each side in turn.
Information: The Filed, the Reported, the Announced
Information is what gets filed, reported, or announced.
A company releases its 10-Q, the quarterly report public companies must file with the SEC (the US securities regulator), and earnings came in at 12 cents against the analyst consensus of 18. A biotech's clinical trial reads out. A central bank prints a statement. A company files an 8-K, the SEC form for disclosing material events, announcing a stock offering.
In each case, something concrete moved from the private set into the public set, and the price repriced to account for it. Information events share three properties that matter enormously for us: they happen at a specific moment, they leave a paper trail, and the same kinds of them happen over and over across thousands of companies.
That last property is the quiet one, and it is the important one. A single earnings surprise is a story. Forty thousand earnings events across a decade is a population you can study.
Expectation: Paying for What Has Not Happened Yet
Now the other side. A stock drifts up 2 percent on a day with no filings, no announcements, no news of any kind. What happened?
Nothing happened. The market simply became willing to pay a little more for the same undisclosed future. Maybe a large buyer got more confident about next quarter. Maybe risk appetite across the whole market ticked up. Maybe a fund needed to deploy cash. Expectations about information yet to come shifted, and the price moved even though the public record did not change at all.
Here is a number worth sitting with: a typical company's stock trades and moves roughly 250 days a year, but it files genuinely material disclosures on perhaps a dozen of them. Everything else, the vast majority of daily movement, is expectation drift on a slow news flow.
Expectation drift is real, and plenty of traders make a living reading it. But notice what it lacks. There is no timestamp, no document, no defined moment when it "happened." You cannot list all the expectation shifts of 2024, count them, and measure what followed each one. The category has no edges.
Why Systematic Trading Lives on the Information Side
This course is about systematic trading: building a repeatable process, testing it on history, and running it the same way every time. That word "repeatable" does all the work.
A process can only be repeatable if the thing it acts on is itself repeatable and observable. Expectation shifts fail that test. They are continuous, fuzzy-edged, and impossible to define a population over. Information events pass it. They are recurring, dated, and disclosed, which means they are durable, countable, and studyable.
To be clear about what we are not claiming: information does not move prices more than expectation does. On most days it moves them less. The claim is narrower and more useful.
Systematic trading is built on the information side of the ledger, not because it moves prices more, but because it is the only side you can study.
Some information events turn out to be even better than studyable. They are scheduled in advance, and they force specific people to act in specific ways whether they want to or not. Those two ideas, who is forced to act and what makes an event queryable, are the next two lessons. By the end of this module you will have the full argument for why edges exist at all, and a four-step procedure for hunting them.
Knowledge check
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