Newspaper article The Evening Standard (London, England)

Clues on Twitter Can Be Tweet Music. ...but Punters Must Be Sure to Screen out Dodgy Info, Warns Russell Lynch

Newspaper article The Evening Standard (London, England)

Clues on Twitter Can Be Tweet Music. ...but Punters Must Be Sure to Screen out Dodgy Info, Warns Russell Lynch

Article excerpt

Byline: Russell Lynch

HOWLING at the moon, or an invaluable resource? Views of Twitter vary dramatically. But in the spread betting world, it is becoming increasingly popular, and a growing number of punters are taking note.

Companies increasingly monitor Twitter and other social media to spot trends in consumer habits and gaps in the market.

So too do investors tracking shares, currencies, gold prices and other assets. Thousands of investmentrelated messages are tweeted every day, from company news and well-researched analysis to simple market "noise".

Much of it is marked with the relevant symbol, making it easy for punters to follow. A recent study of 250,000 such tweets found "a striking co-ordination" between the Twitter view about shares and the other information from investors and analysts.

"I don't think it is the Holy Grail to make millions but it is a very credible and legitimate source," said Timm Sprenger, a PhD student at the Technical University of Munich, who published the report.

There will, of course, be millions of doubters but there are plenty of people in the City and on Wall Street who are watching with interest.

Tim Hughes, managing director at IG Index, said: "It will be really interesting to see if there is a tool that can calibrate tweets into accurate data. The ability to get a representative view is quite difficult. But within the circles of people who are following financial markets it can work. There will at some point be a tipping point of sentiment."

London-based hedge fund Derwent Capital certainly thinks so. It this year launched a fund that monitors sentiment from tweets to gauge the mood of the stock market and trades off the back of it. Although it is early days, it outperformed the market in July, its first month of trading.

"We watch to see how each of the different mood states changes in real time," explained founder Paul Hatwin. …

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