BOOM

Trending Searches

    SUPPORT
    BOOM

    Trending News

      • Fact Check 
        • Fast Check
        • Politics
        • Business
        • Entertainment
        • Social
        • Sports
        • World
      • Law
      • Explainers
      • News 
        • All News
      • Decode 
        • Impact
        • Scamcheck
        • Life
        • Voices
      • Media Buddhi 
        • Digital Buddhi
        • Senior Citizens
        • Videos
      • Web Stories
      • BOOM Research
      • BOOM Labs
      • Deepfake Tracker
      • Videos 
        • Facts Neeti
      • Home-icon
        Home
      • About Us-icon
        About Us
      • Authors-icon
        Authors
      • Team-icon
        Team
      • Careers-icon
        Careers
      • Internship-icon
        Internship
      • Contact Us-icon
        Contact Us
      • Methodology-icon
        Methodology
      • Correction Policy-icon
        Correction Policy
      • Non-Partnership Policy-icon
        Non-Partnership Policy
      • Cookie Policy-icon
        Cookie Policy
      • Grievance Redressal-icon
        Grievance Redressal
      • Republishing Guidelines-icon
        Republishing Guidelines
      • Fact Check-icon
        Fact Check
        Fast Check
        Politics
        Business
        Entertainment
        Social
        Sports
        World
      • Law-icon
        Law
      • Explainers-icon
        Explainers
      • News-icon
        News
        All News
      • Decode-icon
        Decode
        Impact
        Scamcheck
        Life
        Voices
      • Media Buddhi-icon
        Media Buddhi
        Digital Buddhi
        Senior Citizens
        Videos
      • Web Stories-icon
        Web Stories
      • BOOM Research-icon
        BOOM Research
      • BOOM Labs-icon
        BOOM Labs
      • Deepfake Tracker-icon
        Deepfake Tracker
      • Videos-icon
        Videos
        Facts Neeti
      Trending Tags
      TRENDING
      • #Operation Sindoor
      • #Pahalgam Terror Attack
      • #Narendra Modi
      • #Rahul Gandhi
      • #Waqf Amendment Bill
      • #Arvind Kejriwal
      • #Deepfake
      • #Artificial Intelligence
      • Home
      • Business
      • Tech
      • How Twitter Can See The Financial...
      Tech

      How Twitter Can See The Financial Future – And Change It

      By - Costas Milas |
      Published -  9 Nov 2015 4:24 PM IST
    • Boomlive

      Twitter_NYSE

      Information that appears and is shared on social media plays a vital role in strengthening the efficiency of financial markets – unless of course people abuse it by posting disinformation. The case of James Alan Craig, whether guilty or not, demonstrates Twitter’s power to move markets for ill gain as much as it can predict what they will do next.

      Scottish financial trader James Alan Craig has been charged in the US for allegedly using Twitter to manipulate share prices. According to the US Department of Justice, the 62 year old, from Dunragit in Dumfries and Galloway, caused shareholders to lose more than $1.6m (£1.1m) after allegedly spreading “fraudulent” information about companies on the social network. According to newspaper reports, the DoJ has charged him with securities fraud, while the Securities and Exchange Commission has filed a separate complaint charging him with the same offence.

      Most of us would probably find it very hard to believe that information on the likes of Twitter, Facebook or Google Blogs might have the power to influence financial markets, but this is not the first time such a story has hit the news. Astonishingly, a fake tweet on April 23 2013 from a hacked Associated Press account, asserting that explosions at the White House had injured Barack Obama, wiped more than $130bn off the value of the S&P 500. Research into the economic crisis the same year meanwhile suggested that financial markets are more influenced by negative press rumours than fundamentals.

      The new meeting place

      Social media has become a popular open forum for analysing economics/finance and, equally important, it reflects public sentiment minute by minute. It has long since become essential for economic commentators, policymakers and their faithful followers. Leading economist Paul Krugman runs a Twitter account with approximately 1.5m followers, for instance. IMF chief Christine Lagarde has around 320,000 followers. Also updating in real time are dedicated websites by the likes of The Wall Street Journal and Financial Times, discussing the hot economic topics in great detail. Not surprisingly, people pay attention.

      Academics have found plenty of evidence that social-media topics of conversation predict what will happen in markets. This is especially true in periods of negative economic news when traditional models that use only financial variables might prove inadequate. For instance, recent research found evidence that online search activity predicts price movements in the US stock markets – and even in the less liquid residential property market. Both these papers argued that the greater the search intensity as buyers appraise the available information, the greater the effect on prices.

      I co-authored a recent paper that showed that during the recent eurozone crisis, social-media discussion and Google searches related to “Grexit” affected the spread in borrowing costs between Germany and peripheral eurozone countries Greece, Ireland, Italy, Portugal and Spain. This was over and above the effects of the latest economic data.

      When the economic news is bad, social-media power grows Imilian

      We also found that Google and Facebook search queries on “Grexit” had less market impact than the “#Grexit” keyword on Twitter. This is not surprising. People are much more likely to click on links on Twitter than Facebook. Facebook users get the majority (70%) of news links from family and friends, and only a tiny share (13%) from news organisations or journalists. Contrast Twitter, where 36% of news links are from family/friends and 27% from news organizations/journalists. This broader mix of sources means that Twitter provides a greater range of information. Facebook users also track with the general population very closely whereas Twitter users are more educated.

      It is not a stretch to say that the information that appears and is shared on social media plays a vital role in strengthening the efficiency of financial markets – unless of course people abuse it by posting disinformation. The case of James Alan Craig, whether guilty or not, demonstrates Twitter’s power to move markets for ill gain as much as it can predict what they will do next.

      This article was republished from TheConversation.com.

      Tags

      FacebookGrexitJames Alan CraigJournalistsnews tweetsPaul KrugmanS&P 500TwitterGoogle
      Read Full Article
      Next Story
      Our website is made possible by displaying online advertisements to our visitors.
      Please consider supporting us by disabling your ad blocker. Please reload after ad blocker is disabled.
      X

      Subscribe to BOOM Newsletters

      👉 No spam, no paywall — but verified insights.

      Please enter a Email Address
      Subscribe for free!

      Stay Ahead of Misinformation!

      Please enter a Email Address
      Subscribe Now🛡️ 100% Privacy Protected | No Spam, Just Facts
      By subscribing, you agree with the Terms & conditions and Privacy Policy connected to the offer

      Thank you for subscribing!

      You’re now part of the BOOM community.

      Or, Subscribe to receive latest news via email
      Subscribed Successfully...
      Copy HTMLHTML is copied!
      There's no data to copy!