Traders are turning to Twitter to get in front of big market-moving trends.
That in turn is creating an eco-system of companies looking to make sense of Twitter data and pull the signal from the noise.
According to a TABB Group report issued last week, the industry is growing at a rapid pace.
“There’s not going to be one firm on top,” said TABB’s Valerie Bogard, a research analyst. “There’s going to be multiple firms.”
Some of the startups have already been snapped up by bigger corporates looking to get an early edge on analytics.
Twitter itself spent upwards of $130 million just a year ago to buy Gnip, now used to help disseminate data to startups that in turn relay that information to hedge funds, among other clients.
Elaine Ellis, a marketing manager at Gnip, told Business Insider that Twitter also sells data to banks and hedge funds directly.
She said: "We know Tweets move markets. Our public, real-time nature positions us perfectly to be a source for the financial industry. We believe that in the future, this will evolve from a nice to have to a must have for all industry participants."
Bogard told Business Insider that everyone from investors in munis to traditional funds with long-only strategies are trying to turn real-time commentary into critical analysis ahead of the tape.
Not all social signals are created equal, of course. In fact, some are created to throw Wall Street’s brightest minds off the scent of what’s actually happening.
Here are some of the startups looking to turn Tweets into trading signals:
Selerity is partnering with Wall Street disruptor Symphony
Selerity put itself on the map earlier this year when it broke the news of Twitter’s earnings on Twitter, of all places. The startup paws through about 8 million documents daily, also factoring in social signals on top of media reports to generate insights for users.
Now, it has also partnered with Symphony, the messaging system out to chip into one of Bloomberg’s key lines of business. The New York company will be filtering key data to network users and also directing them to related media away from the messaging system. Selerity last raised capital in 2013, and has taken on little funding to date, and charges based on a “per-user licensing fee,” CEO Ryan Terpstra said.
iSentium has backing from Goldman Sachs alums
iSentium is one of the older players in the social sifting game. That’s part of the reason it’s already profitable, having raised cash from Goldman alum David Heller and Marc Spilker, former president at Apollo Global.
The Miami-based startup is even working with a yet-unnamed investment bank to launch a Twitter sentiment ETF product, although CEO Gautham Sastri says it won't launch until next year, thanks to regulatory approval issues. He says social analytics is here to stay on Wall Street. “If you don’t look at social media, you’re blind,” he told Business Insider.
TickerTags puts 350,000 social cues to work
Dallas-based TickerTags tags social media cues and draws trends together over time to view how they impact companies. That entails anything from “gluten-free” dieting fads to people complaining about the lines at a theme park.
The angles for analysis are endless; there are more than 350,000 “tags” that are filtered against 50 million tweets. But, at $10,000 a month for traders, it isn’t cheap. “You can see things bubbling up on the social web in real time,” said CEO Chris Camillo.
See the rest of the story at Business Insider
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