By: Montana Timpson
Joe Gits, CEO and Co-Founder of Social Market Analytics Inc., joined Lightspeed in a live webinar, Integrating Social Media Analytics into Your Trading Strategy with Lightspeed, showcasing key functions of the Social Market Analytics software.
Social Sentiment in Trading
Traditional sources of information for active traders include analyst estimates, news stories, measures of market volatility and various trading tools. Recently, social sentiment investing tools have become a common resource as well, designed to aggregate and analyze social media data to produce predictive market analytics. One leader in the field? Social Market Analytics Inc. (SMA).
One of Lightspeed’s featured trading tools, SMA offers advanced software designed to aggregate and analyze social media data to produce predictive market analytics. Here’s the breakdown of SMA’s robust features and functions from Lightspeed’s newest webinar recap.
Social Market Analytics Inc.
The goal of Social Market Analytics, Inc. (SMA) is to harness the massive amount of unstructured financial data across both alternative and traditional sources into machine readable feeds and market intelligence. Over the last decade, SMA has become the leader in providing APIs for quantitative systemic trading firms and market makers. SMA’s patented processes provide the financial and marketing communities with new data sources to evaluate financial data sets, enhance returns and reduce risk, allowing SMA to operate as a predictive analytics FinTech firm.
In practice, SMA is designed to capture information being shared socially that is disrupting capital markets. SMA harnesses Twitter signals to deliver real-time social sentiment to hedge funds, asset managers, market maker and risk makers, says Gits. Here’s what that means.
SMA Social Media Framework
In incorporating SMA into the Lightspeed Trader platform, the metrics that appear on the screen are what are known as Sentiment Scores, or “S-Scores.” SMA’s software calculates a baseline for every security and compares current conversation relative to that historical baseline, the idea behind that being that if the current conversation on that particular security is two standard deviations more positive than normal, that means that the conversation is 96% more positive than the baseline and that stock will generally tend to outperform.
How Lightspeed Users Can Benefit from Social Media Data
Lightspeed Trader users can use these S-Score metrics as an indicator of price movement in securities. As Gits explained, securities being discussed more positively on Twitter tend to outperform expectations, while those being discussed negatively tend to underperform.
Gits also suggests that social media can offer investors new trade ideas, easier position monitoring and more impactful trade executions.
An advanced suite of widgets within Lightspeed Trader allows clients to utilize SMA.
With Lightspeed Trader, traders can access the following widgets:
Top 10 Sentiment
This widget shows the ten most positively talked about securities on Twitter ranked by SMA’s Sentiment Score (S-Score). This widget also provides metrics regarding Tweet Volume (S-Volume) and Relative Tweet Volume (SV-Score). The Top 10 Sentiment widget updates every 60 seconds.
Bottom 10 Sentiment
This widget shows the ten most negatively talked about securities on Twitter ranked by SMA’s Sentiment Score (S-Score). This widget, like the Top 10 Sentiment widget, also provides metrics regarding Tweet Volume (S-Volume) and Relative Tweet Volume (SV-Score) and updates every 60 seconds.
Accurate Accounts Long Side
Within this widget, SMA identifies historically accurate Twitter accounts by determining the sentiment of security-related Tweets and the subsequent price movement of that security. This widget provides the number of Accurate Accounts per security and the percentage of those accounts that speak positively or negatively about that security. In this widget, securities are ranked by the percentage of Accurate Accounts that speak positively about that security.
Accurate Accounts Short Side
As with the Accurate Accounts Long Side widget, this widget identifies historically accurate Twitter accounts by determining the sentiment of security-related Tweets and the subsequent price movement of that security. This widget provides the number of Accurate Accounts per security and the percentage of those accounts that speak positively or negatively about that security. In this widget, securities are ranked by the percentage of Accurate Accounts that speak negatively about that security.
Sentiment by Symbol
This widget allows users to view a specific ticker’s real time social sentiment factors and historical social sentiment trends. Users type in a ticker symbol and widgets will populate with up-to-date sentiment data.
For more information on Social Market Analytics Inc. and SMA’s integration with Lightspeed Trader, visit Lightspeed’s Trading Tools webpage, and for more professional trading insights, check out Lightspeed’s Active Trading Blog. To watch Lightspeed’s webinars live, register for upcoming webinars here.
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