Tweets have now been turned into formatted streams of market data.
A Boulder, Colo., collector and redistributor of comment expressed on social media networks Thursday will launch a pair of streams of data from Twitter and the securities discussion site StockTwits that are 'normalized' and ready to be fed to computers for analytical processing.
Gnip said it has prepared the streams as part of the launch of a product it calls MarketStream, that is designed for use by hedge funds and high-frequency traders.
The move follows the launch in May of a social-media-based hedge fund in London. In that launch, Derwent Capital Markets said the fund it created would try to achieve consistent above-market returns from real-time analysis of comments on social data.
Director of Asset Management and Financial Technology Seth McGuire said Gnip had worked with Derwent earlier this year, but no longer does.
In the Gnip case, the streams of tweets have been turned into data in a uniform or 'normalized' format that hedge funds or firms of any type that rely on automated processes for making high-speed trading decisions. And those streams are intended for use along with other statistical and news-based sources of market data.
The launch Thursday is being made in conjunction with StockTwits, a Web site and service whose users comment solely on capital markets events and individual stocks.
Initially, MarketStream will actually provide two streams of normalized data: One that relays comment from Twitter, the progenitor of the concept of a single user broadcasting 140-character messages to the web at large, and StockTwits, which created the $(TICKER SYMBOL) tag that lets tweeters identify exactly which stock a message is talking about. Such tags allow users and computing systems to quickly pick up content relevant to a single stock such as KO (Coca Cola Company).
The Twitter feed is much broader and voluminous. Twitter said last month that it has more than 100 million active users, generated 250 million tweets every day.
StockTwits has 150,000 registered users and generates "tens of thousands" of tweets every week, according to chief operating officer Francis Costello.
The combination of the "broad" feed from Twitter and "specific" feed from StockTwits will translate the "voice of the market,'' in McGuire's term, into "workable data" for algorithmically-driven trading systems.
-- This article first appeared on Securities Technology Monitor.