The future of Twading


I’ve noticed a lot of comment linking Twitter and trading recently.

There was a report on Finextra that Canada’s online investors are increasingly turning to Twitter and Facebook to help them make decisions and there was a report on Bloomberg at the end of last year about Derwent Capital Markets, a London-based hedge fund that is going to track Twitter to make investment decisions. The Bloomberg report mentioned research conducted by, among others, associate professor Dr Johan Bollen of Indiana University Bloomington which indicates that there’s a close correlation between an “anxiety” mood measure on Twitter and the Dow Jones Industrial Average – with about a three-day lag.

The Economist now reports that in addition to their original investment strategies, Derwent has now also licensed Dr Bollen’s algorithm to guide their investments. Derwent is managing a £25m fund which reportedly includes £1.5m of their own money.

No surprise, then, that we’re including a Twitter widget in the roadmap of requested features in our web trading interface – it looks like the demand for this could grow.

One Response

  1. […] Following on from Mike Hill’s post last week,  a number of banks we are speaking with are talking (or in social media speak ‘chattering’ or ‘twittering’) about incorporating some form of social media sentiment and correlation analysis as a predictive indicator within their trading platforms – to uncover hidden trading opportunities. […]

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