It might seem like that the New York Stock Exchange and Twitter would make strange bedfellows. But, with social media’s increasingly important role as a driver of real-time trends, it’s really pretty compelling. So compelling in fact, that a group of social entrepreneurs have made an analytics business out of it called Social Market Analytics (SMA). Then in February the New York Stock Exchange signed on as a distributor and made the SMA social analytics available to all New York Stock Exchange clients who want to subscribe to the service.
What is that service? Think Twitter sphere. In this space, 400 million tweets are launched a day on every possible subject. Now let’s say you are a stock trader interested in Wal-Mart, and you want to understand how what is being tweeted about Wal-Mart might impact the company’s stock price.
Enter SMA. The October 15 issue of American Way magazine carried a short piece on this company and explained that the four founders have created a model whereby “they aggregate and size up selected Twitter chatter on all U. S. stocks in four essential ways and assign scores. The goal is to slice and dice the constant stream of tweets, which increasingly are the stream of consciousness of the business world, to give traders an information advantage.”
As you can imagine, there are experts out there that predict that one day “social analytics” will be more useful to traders than traditional economic indexes. Why? “Because social media data is more current, has a broader base and looks forward, not back.”
So whether you are a day trader or work the desk at the NYSE, you may want to check your Twitter feed– or better yet the SMA S factors for the stocks you are watching. As it so aptly says on the SMA website, the proof is in the profits.