What is Algo Readability?
Algo readability is a composite 0–100 score measuring how well an SEC filing or press release communicates with algorithmic traders. It blends Fog index, litigious-language density, sentiment polarity, sentence complexity, forward-looking-statement clarity, and entity recognition into a single metric algos use to extract actionable signals.
Why Algo Readability matters
Roughly 70% of US equity volume is algorithmic. Algos parse every 8-K, 10-Q, and 10-K within milliseconds of EDGAR posting. If your disclosure is dense, ambiguous, or buried in litigious hedging, algos either skip it or score it negatively. The result is wider spreads, thinner liquidity, and more volatility around filings — exactly when you want the opposite. Algo readability translates a qualitative IR concern into a measurable disclosure metric you can optimize before each filing.
How AxonIR measures it
AxonIR scores every filing on six independently weighted dimensions, calibrated by sector. A real-estate REIT and a biotech micro-cap have very different baseline disclosure patterns, and a generic readability score that does not correct for sector produces misleading results. AxonIR's engine reports both the raw score and the peer-relative percentile, so a 72 in a sector that averages 65 is recognized as above-median rather than mediocre. Every score includes a top-3 fix list — specific sentences or paragraphs that, if rewritten, would move the composite the most. The objective is actionable, not academic.
Algo readability is not the same as human readability. A filing can read clearly to an analyst and still score poorly with algos because of subtle issues — over-long sentences, ambiguous referents, or non-standard entity naming that breaks NER models. Conversely, language that is dry and bureaucratic can score well algorithmically because it is structurally clean.
For micro-cap and SPAC issuers, algo readability is often the highest-leverage IR investment because it costs nothing to fix once identified. Improving the score does not require new disclosure — it requires rewriting existing disclosure for clarity. AxonIR's clients typically see a 5–15 point composite improvement on their next quarterly filing after acting on the top-3 fix list.
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