The ubiquity of real-time financial information means that it’s difficult for traders to find unique market opportunity that gives them gives them a competitive advantage. As a result, trading firms are increasingly turning to so-called Alternative Data to seek out undiscovered data niches that may yield a market-winning deal.
As with the broad consumer market, trading professionals are increasingly turning to Twitter as the source of breaking news. Some analyses have suggested that Twitter carries breaking news up to 10 minutes before it can be collected, processed and distributed by traditional newswire services. But even if the gap is just 10 seconds, tapping into Twitter data can give trading firms an edge over their rivals.
But it’s difficult to get Twitter delivered to your trading desk, for a variety of reasons ranging from concerns about market abuse, to the proliferation of fake news and the potential risk of reputational damage. By banning Twitter, trading firm management may be seeking to avoid regulatory censure and possibly huge fines, and mitigate the risk of scandal. While that may be understandable, the banning of Twitter from trading floors essentially denies dealers access to what’s becoming an important source of breaking news.
What’s needed is a read-only Twitter client that can follow any account (or data source) without the capability of sending outbound Tweets or direct messages, thereby obviating concerns about market abuse and regulatory censure. For a more detailed discussion of the issues around using Twitter in a compliant way, download a free white paper from Market EarlyBird here.
Market EarlyBird is a startup venture that has launched a compliant, read-only Twitter client for financial professionals. The service – developed by CEO Danny Watkins, former head of technology at the Bank of Montreal in London – is now in use at several financial institutions in London, New York and Singapore, and recently was made available via the app market in Symphony’s messaging platform.
EarlyBird offers a proprietary Twitter client user interface that allows the client to follow any sources of information on a specific topic or company while blocking private messaging, thereby addressing compliance officers’ fears of regulatory issues. The system automatically time-stamps when a Tweet was sent by source and when users sees it.
The interface offers so-called ‘Smart Tracks’, filtered by keywords, of updates from news services, exchanges, announcements, influencers or any other source affecting the market situation of the target company, sector or instrument. It can be used to track corporate actions, short sellers, or any other type of announcement impacting the stock or security.
At the back end of the services is the Twitter commercial feed. The EarlyBird platform is hosted within the Microsoft Azure cloud environment. No twitter account needed for use. The service is now live and in use by equity and foreign exchange traders at a large unnamed bank, on individual desks at two other top 20 banks, as well as at several buy-side firms.