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Traders to tap Twitter?

24 June 2009  |  8261 views  |  1 caution!

StreamBase Systems is looking to take advantage of the Twitter craze by connecting its complex event processing (CEP) platform to the microblogging site, providing traders with a new source of news and information.

The vendor's Twitter adaptor allows applications to ingest and send out tweets. By plugging the software into trading systems, users can tap the information to help make decisions in the same way they currently utilise news providers such as Reuters and Bloomberg.

StreamBase says it CEP software helps process the estimated two million tweets transmitted a day, enabling traders to analyse and act on real-time events. The firm has already developed Twitter connectivity for a number of undisclosed clients.

Mark Palmer, CEO of StreamBase CEO Mark Palmer says trading systems or operations support can use Twitter direct messaging to alert users of opportunities or system problems.

"Systems can also use Twitter messages to assess economic sentiment in real-time for trading systems, or marketing analytics, through monitoring news headlines and popular sentiment transmitted via Twitter," he adds.

In a blog on the StreamBase Web site, CTO, Richard Tibbetts, says algorithmic traders should look to be "dirty" - working with information and technology that others avoid - if they want to "find alpha".

Finextra verdict It's good to see the tech-heads in the trading community looking to utilise Twitter but the microblogging site is a notoriously unreliable source of information. With wild speculation swirling around, its difficult to see how traders can block out the noise. Indeed, unscrupulous Twitterers could use the technology to deliberately spread disinformation. This is already happening in the political sphere, further blunting Twitter's effectiveness even as a broad sentiment indicator.

Comments: (1)

Paul Penrose
Paul Penrose - Finextra - London | 24 June, 2009, 14:51

Nice try by StreamBase but trading on Twitter doesn't fly. Put it this way: Would you push the buy or sell button on the basis of a few anonymous messages picked up on a Yahoo stocktipping message board? The more seriously Twittter is taken, the more interesting it becomes as a means of spreading disinformation, and the less value it subsequently has as a trusted source of actionable information.

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