By Jeremy Grant , Tim Bradshaw in London 2009-09-17
The teeming trading pits of the world’s exchanges may have been shut down by technology, but Twitter is bringing them back to life in cyberspace as the social networking site turns into a new trading tool.
Traders from New York to London are signing up for Twitter to reconnect with traders elsewhere.
StockTwits is one of the most popular ways for traders to track relevant discussions on Twitter, including stock trends. Traders tweet their opinions about a stock with its ticker and a dollar sign which is then picked up and displayed by StockTwits’ own website.
About 90,000 people have signed up to the site, many of them day traders. Around 15,000 actively contribute while the rest listen in.
“With 16,000 analysts laid off in this meltdown and the disaggregation of trading floors StockTwits is filling a void,” says Howard Lindzon, co-founder of StockTwits.
“There is an ability to connect fast with like-minded people, share and chew . and gather conviction if need . on ideas, banter, advise, yell at dumb ideas . be.”
But Twitter is not only being used to hunt for stock tips, many traders say. Instead, they want a way of picking up how other traders are trading.
Dan Wlasiuk is a Chicago airline pilot who trades in his spare time. He has started trying out a complex trade involving equity options dubbed the Iron Condor.
“It’s a little esoteric, . . . so I tweeted that I was doing this and then was able to converse with a bunch of other traders who had similar positions,” he says. “You don’t go to Twitter for stock tips, it’s more useful to learn how other guys trade.”
Software companies have been quick to notice the phenomenon, and have launched services that help traders sort the vast amount of information they receive through Twitter.
Streambase, a US company, in June launched Twitter Adapter, allowing traders to receive tweets into their trading system, aggregate them and arrange them by relevance.