Courtesy of Laton McCartney at Securities Technology Monitor
Editor note: this story is from the Believe It or Nuts aka If you’re a twit you should tweet Dept.
NYSE Technologies said it will begin distributing sentiment statistics based on social media postings, through its SuperFeed market data service.
The statistics, developed in conjunction with Social Media Analytics, will be distributed through NYSE Euronext’s Secure Financial Transaction Infrastructure, which reaches market participants in the United States, Europe and Asia.
The Sentiment Signature Feed can be fed into trading analyses and automated decision-making processes, the companies said. The feed will draw on a feed from Twitter, known as the “fire hose,” which generates 500 million Tweets a day.
As part of the agreement, NYSE Technologies’ subscribing customers can access data from SMA’s social media monitoring engine. SMA’s engine extracts, evaluates and calculates data in real-time to attempt to generate directional and volatility indications on individual stocks, exchange-traded funds, sectors of the economy, and indices by measuring the level and quality of social media interactions on social media sources compared to historical levels.
SMA’s engine seeks to create a social media “signature,” consisting of seven statistical indicators generated by the comparisons: a score, an average, a change, the volatility, the buzz and the “dispersion” of the social media commentary.
Social Market Analytics is a Naperville, Ill.,firm founded last year by financial Professionals who create databases and ways to analyze their contents for hedge funds, money managers, and investment banks. The company has a patent pending on its social media monitoring engine.
Start- up SMA is headed by former Thomson Reuters executives, Fady Harfoush and Joseph Gits. Last year it began beta tests of a set of products designed to convert social media data, Twitter posts into quantifiable and actionable indicators for traders and trading algorithms to use as part of their strategies.
“Everyone is monitoring what is being said on Twitter now; SMA offers firms the right tool for the job with data that consists of clear, quantified actionable intelligence on social media
sentiment,” said Tom Watson, Vice President, Global Market Data, NYSE Technologies. “We believe this will change the way the financial sector thinks about social media. For the first time, trading firms, brokers, asset managers, and non-financials in every sector will have a measureable way to track the sentiment of the social media stream of consciousness.”
Other firms are also focusing on social media sentiment for trading. Selerity, a provider of real-time event data solutions based largely on social media for the financial services industry, just raised an additional $3 million in capital to develop a real-time alert service based on breaking events that move markets. And last June London-based DCM Capital established what it called the world’s first social media sentiment analysis trading platform, “Our technology listens to the vast amounts of social media data including Twitter and Facebook and in-turn derives a sentiment rating in real time,” DCM said.