According to a July survey of 3,000 U.S. equity and options traders conducted by online broker dealer TradeKing, active traders are increasingly adopting "Web 2.0" social networking tools such as blogs and podcasts to gather and share information(1).
Over one-third (36 percent) of options traders and one- quarter (24 percent) of equity traders report reading blogs either daily or weekly, and blog authorship, while still modest overall, is climbing.
The in-house survey was conducted July 17-20, 2007, via email to 3,000 TradeKing clients, with an estimated 95% confidence level. The survey results have been segmented into two distinct client groups: "options only" traders and "equities only" traders.
Podcasts have also emerged as a popular educational tool among respondents, with 25 percent of options traders and 17 percent of equity traders reporting that they listen to podcasts daily or weekly. Interestingly, while more traditional forms of online community, such as message boards, remain popular, with about one-quarter of options and equity traders reading them daily or weekly, the number of participants in user groups appears to be dropping.
"Our online community has grown significantly since we pioneered it a year ago," said Donato A. Montanaro, Jr., TradeKing's co-founder and CEO. "Nearly 10 percent of TradeKing's client base is interacting with one another online. Some have created profiles and are connecting with other members who have similar financial interests, others are blogging about their strategies and trades, and some are actually publishing their trades using our Certified Trades section. Interestingly, as the market has experienced increased volatility in recent days, our TradeKing Community has demonstrated an even higher level of activity, indicating perhaps an added comfort-factor social networking provides during times of fluctuation."
One year ago, TradeKing introduced the ability for customers to opt to show their trades, which are verified on the Certified Trades section of TradeKing's website. "By showing actual trades that have occurred, the site provides a level of transparency that can be lacking in many online interactions," says Montanaro. "If a member blogs about a certain investment or strategy and opts to publish their trades, others can see that they have taken action, and are not simply posting wholly unsubstantiated ideas."
Oil and Alternative Energy Continue as Top Potential Trade Triggers
Other findings in TradeKing's survey show that respondents continue to view oil prices and alternative energy as top market triggers. More than 90 percent of options traders and 80 percent of equity traders considered this topic a "potential trade trigger" or a trend worth "monitoring actively," up slightly from TradeKing's April 2007 survey. "Interest rate changes" edged out "evidence of inflation" as the number two and three investor concerns among respondents, in line with April data.
(1) The content of this press release is provided for educational and informational purposes only, does not constitute a recommendation to enter in any of the securities transactions or to engage in any of the investment strategies presented herein, and does not represent the opinions of TradeKing or its employees. TradeKing provides self-directed investors with discount brokerage services, and does not make recommendations or offer investment advice. The investor alone is responsible for evaluating the merits and risks associated with the use of TradeKing's systems, services or products. All investments involve risk, losses may exceed the principal invested, and the past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns.