NYSE Technologies adds social media sentiment tool
NYSE Technologies is incorporating social media sentiment into its data feeds
Market participants using NYSE Technologies’ market data feed SuperFeed and SFTI network will soon be able to get social media sentiment statistics, following a deal between NYSE and specialist company Social Market Analytics.
The SMA engine evaluates data in real time to attempt to generate directional and volatility indications on individual stocks, exchange-traded funds, sectors and indices by measuring the level and quality of social media interactions. SMA’s engine uses seven statistical indicators to track sentiment, in addition to volume, change and dispersion of social media commentary.
“Everyone is monitoring what is being said on twitter now,” said Tom Watson, vice president, global market data at 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 measurable way to track the sentiment of the social media stream of consciousness.”
NYSE Technologies and SMA are not the first to incorporate a social media sentiment index into the trading process. Last month, online trading service DCM Capital has released a trading platform with a social media sentiment feed, allowing traders to incorporate information from channels such as twitter and Facebook into their trading decisions. Earlier still, in November last year, Bloomberg demonstrated an app built by French company IoSquare that had just been released on the newly launched Bloomberg App Portal.
The IoSquare app, Social Media Indicator, aggregates social media posts relating to certain stocks or indices and uses them to derive a “sentiment index” for each stock. The ‘sentiment’ can then be plotted on a graph against the actual price of the stocks.
“Social media is already a large but still rapidly growing means of communication and efficient global interaction,” said Joe Gits, chief executive at SMA. “Many of these conversations discuss companies, stocks and market activity, but until now there hasn’t been a way to collect and quantify this data. We are excited to be working with NYSE Technologies to offer this service quickly and cost-effectively over the SFTI network.”
The tool is due to launch before the end of Q1 this year.
