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A defining feature of the work-from-home era of the last two years has been the rise in retail trading. Individuals sought more self-directed means of shaping their careers or investing outcomes, and joined groups on Reddit and other places to find information on where to turn for the next trade.

The trend has extended beyond stocks and crypto to the world of futures trading.  But even in this industry traditionally defined by institutional participants, traders have moved to popular social networks to acquire accurate information and find a connection with fellow traders. Twitter might be the most common.

Matt Kenah traded Eurodollar futures and other markets on the Chicago Mercantile Exchange floor for several years before shifting to screen trading and, about four years ago, started posting trading-related comments on Twitter under his handle, @PaxTrader777. Twitter, he said, has been a valuable resource for connecting with fellow traders and exchanging information.

In financial markets, “the free exchange of ideas and opinions is really, really important,” said Kenah, who trades out of his Chicago home and has over 24,000 followers on Twitter. “On Twitter, there’s no shortage of opinions, and there’s no shortage of information and knowledge, and no shortage of people willing to share that knowledge.”

Social media can be noisy, and bad information can easily find its way into the feeds of even the most discerning traders. For Kenah and others, community has helped cut through the noise. Traders have leveraged Twitter, YouTube, Reddit and other online platforms to inform their trading strategies, keep up with breaking news, share stories or discuss life events outside of work.

“Even though we don’t see one another, we develop a bit of camaraderie,” Kenah said of his Twitter followers. “We develop kind of a rapport. And there are thousands more I have not met who I feel like I kind of know.”

Vetted Financial News on Social Media

Some companies in the financial markets have taken the social media model steps further to create hybrid real-time news platforms that incorporate Twitter, streaming video and other digital technology with traditional business journalism.

That’s part of the idea behind Bloomberg Quicktake, a streaming news service that’s part of Bloomberg LP, the global financial news and data company. Bloomberg Quicktake gathers data from Twitter and other social forums such as TikTok to identify trending topics and market scuttlebutt, cleans and categorizes that data using proprietary software and funnels it through Bloomberg News reporters and editors for vetting and verification.

QuickTake publishes several videos each day on a variety business and financial market subjects, including some produced through a partnership with CME Group and featuring CME market experts as well as outside experts (for example, policy tools and supply chain-driven inflation by CME Group Chief Economist Blu Putnam).

Katie Demetriou, Senior Account Executive with Bloomberg Media, said Quicktake aims to engage with active traders and investors, provide access to reliable information and “create a community for real-time conversations to happen at a lightning speed.” It’s based on the premise that social media has emerged as the place where trading conversations happen.

Those conversations, increasingly, are happening on Twitter. During the past year, trading-related tweets surged 52% over the previous year, according to Twitter data. Some 227 million finance- or trading-related tweets were posted during the first half of 2021. According to Greenwich Associates, nearly 80% of institutional investors surveyed use social media as part of their regular workflow, and about 30% of those investors said information obtained through social media directly influenced an investment recommendation or decision.

Quicktake aims to “create a community for real-time conversations to happen at a lightning speed.” 

- Katie Demetriou, Bloomberg Media

Finding the Signal Through the Noise

But Twitter’s utility enabling users to condense complex subjects into 280-character-maximum headline-style hot takes and missives also has limitations and gaps. Quicktake is designed to fill those gaps through traditional broadcast television, written articles, longer-form video and other content, Demetriou said.

The more traditional platforms are crucial and complementary to Quicktake because “not every story or analysis can be told in a tweet,” Demetriou said. “We recognize the need to tell the story in very bite-sized, digestible manner. But we also want to use broadcast TV, video and other types of content to tell a bigger story.”

Quicktake averages about 184 million monthly social video views, making it the largest provider of news video by volume on Twitter and No. 1 in engagement per follower compared with 50 peer media brands, according to Twitter.

Another Twitter limitation revolves around basic questions such as, who is posting this and is what’s being posted actually true? Paul Chenier, Head of Video Sales at Bloomberg News, said Quicktake aims to establish credibility and trust with the audience by ensuring the “final call” on any story goes to real humans in Bloomberg newsrooms around the globe. Social velocity is one determinant of what might turn into a market-moving story, he said.

In financial markets, “you can start to see what’s percolating on Twitter, which is normally a pretty good indicator of what’s going to be headline news the next 24 to 48 hours,” Chenier said. “Someone’s about to take a big position or there’s about to be a big move” in a stock price, for example. “We’re trying to find the signal through the noise and bring Bloomberg credibility to the conversation.”

“The key thing,” Chenier said, “is human beings at the end saying, ‘that may be percolating on Twitter, but it’s either not real or it’s not information we want to give to our user.’ ”

For Traders, Accountability on Twitter is Critical

For many of today’s traders, Twitter is a vital resource for tracking news flow, following top influencers and connecting other parts of the social-digital ecosystem, such as YouTube and podcasts.

“News flow is by far the number one useful thing” about Twitter, said Anthony Crudele, the Florida-based host of Futures Radio and Develop Your Edge podcasts and a former S&P 500 index futures pit trader. “When breaking news comes out now, I look to Twitter. I’m looking for what people are commenting on, gauging sentiment, gauging how impactful the news is. If sentiment seems to be too bearish or too bullish, maybe there’s a counter-trade opportunity.”

Twitter “doesn’t make any decisions for me,” Crudele added. “But it helps me monitor news flow and sentiment.”

“Even though we don’t see one another, we develop a bit of camaraderie. We develop kind of a rapport. And there are thousands more I have not met who I feel like I  know.”

— Matt Kenah, aka @PaxTrader777

Different futures traders on Twitter have different approaches, philosophies and personal rules in terms of who they follow and what they tweet. Kenah said he doesn’t tweet his trading positions and doesn’t post “pictures of Lamborghinis, Ferraris and Rolexes.” Rather, he said he tries to share pieces of wisdom and lessons learned from years of trading both on the floor and in front of a screen, such as:

Using Twitter started slowly and almost by accident for Kenah, who took a job as a runner on the old “Merc” floor shortly after graduating from high school in 1988. As he accumulated more and more followers via old connections and elsewhere, it became clear that on Twitter, accountability and credibility matter more than sheer numbers.

“I quickly realized that people wanted to hear what I had to say because people knew I was who I said I was,” Kenah said. “I could see people were searching for truth, searching for real experience. Twitter has made me a better trader. I trade less. I feel like I’m accountable to a bunch of people I don’t know. And accountability as a trader is important.”


 

 

OpenMarkets is an online magazine and blog focused on global markets and economic trends. It combines feature articles, news briefs and videos with contributions from leaders in business, finance and economics in an interactive forum designed to foster conversation around the issues and ideas shaping our industry.

All examples are hypothetical interpretations of situations and are used for explanation purposes only. The views expressed in OpenMarkets articles reflect solely those of their respective authors and not necessarily those of CME Group or its affiliated institutions. OpenMarkets and the information herein should not be considered investment advice or the results of actual market experience. Neither futures trading nor swaps trading are suitable for all investors, and each involves the risk of loss. Swaps trading should only be undertaken by investors who are Eligible Contract Participants (ECPs) within the meaning of Section 1a(18) of the Commodity Exchange Act. Futures and swaps each are leveraged investments and, because only a percentage of a contract’s value is required to trade, it is possible to lose more than the amount of money deposited for either a futures or swaps position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyles and only a portion of those funds should be devoted to any one trade because traders cannot expect to profit on every trade. BrokerTec Americas LLC (“BAL”) is a registered broker-dealer with the U.S. Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority, Inc. (www.FINRA.org), and is a member of the Securities Investor Protection Corporation (www.SIPC.org). BAL does not provide services to private or retail customers.. In the United Kingdom, BrokerTec Europe Limited is authorised and regulated by the Financial Conduct Authority. CME Amsterdam B.V. is regulated in the Netherlands by the Dutch Authority for the Financial Markets (AFM) (www.AFM.nl). CME Investment Firm B.V. is also incorporated in the Netherlands and regulated by the Dutch Authority for the Financial Markets (AFM), as well as the Central Bank of the Netherlands (DNB).

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