Hedge Funds Turning Tweets into Trades

It’s time to stop calling Derwent Capital “the Twitter hedge fund,” because it’s no longer the only one plumbing social media for investment ideas.

Derwent made a splash earlier this year after pioneering a strategy that involved digging through the 250 million Twitter “tweets” generated each day by users of the popular social media platform in search of clues to the market’s movements.

But now, a handful of other — larger, more established — macro quantitative funds are joining the fray, using Twitter and other portals like Facebook and YouTube to trade tens of billions of dollars with the help of complicated computer models, according to social media aggregator Gnip. Gnip declined to reveal the identities of these secretive funds.

The fact that funds are turning to data drawn from social media to help shape their investment process underscores the important role being played by sentiment in driving markets recently, as well as the might of social media network in dictating what users read and how they act. The latest reminder of social media’s power came over the weekend, when a rumor circulating on Twitter sent many Latvians scrambling to yank money out of Swedish banks, triggering a full-on bank run.

Full article here-http://blogs.wsj.com/marketbeat/2011/12/12/now-trending-turning-tweets-into-trades/?mod=WSJBlog

For exclusive info on hedge funds and the latest news from value investing world at only a few dollars a month check out ValueWalk Premium right here.

Multiple people interested? Check out our new corporate plan right here (We are currently offering a major discount)

Be the first to comment on "Hedge Funds Turning Tweets into Trades"

Leave a comment

Your email address will not be published.