Looking to Twitter for a Market Edge?

If you’re looking for a hot stock tip, consider Twitter. A new paper by Timm O. Sprenger and Isabell M. Welpe looks at the effects of microblogging on stock prices. Sprenger and Welpe compared the “sentiment, message volume, and level of agreement” of tweets with various market indicators.?”Users who provide above-average investment advice are retweeted (i.e., quoted) more often, have more followers and are thus given a greater share of voice in microblogging forums,” the authors write. “In sum, we find that stock microblogs contain valuable information that is not yet fully incorporated in current market indicators.” (HT: Nathan Yang) [%comments]

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  1. Calvin Graham says:

    At my old company (in commodities), I pointed out to the IT team that twiiter was actually important to us as a business tool (not timewasting) because a lot of Chinese traders were giving price updates in what was otherwise an opaque market

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  2. Bobby G says:

    I’ve had a twitter account for a while but only recently have I begun to become involved with it. (Debating posting my Twitter handle… no I’ll pass). Most of the appeal of the program so far has been the instant access to breaking news that I opt-in to hear about (specifically local sports). Having sports info on trades/injuries/etc before my friends can provide an advantage to my fantasy football team as well as overall respect from my friends (joking). On a serious note, though, I can see how this first-mover style access to key information could be beneficial to both a business and an investor.

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  3. Drill-Baby-Drill Drill Team says:

    In 140 Characters or less, explain why I should invest in your Business?

    (IMHO: This is the Ultimate Dumbing down of Market Analysis.)

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  4. Timm Sprenger says:

    TweetTrader.net strives to be the most innovative forum for stock microblogs. It is still in the early stages of development. Follow us on Twitter or Facebook to receive updates on new releases and features of our website.

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