For Traders, Twitter Is One More Trading Tool
By IAN BERRY and LAUREN REES
When Thomas Grisafi read a "tweet" the afternoon of July 22 complaining that the U.S. Department of Agriculture had "goofed again," the president and chief executive of Indiana Grain Co. wondered what prompted the message.
Curiosity aroused, Mr. Grisafi was soon reading about the USDA's announcement that it would resurvey planted corn acreage in several states, a move with potentially big implications for Chicago Board of Trade corn futures. Mr. Grisafi stayed at his desk, made some phone calls and prepared for a rally in overnight electronic trading.
"I ended up having one of my best days in months that night," Mr. Grisafi said. "It really affected me, to the sum of a large amount of money."
Digits: Twitter Begins Filtering Links
For Companies, a Tweet in Time Can Avert PR Mess
For Mr. Grisafi and a number of people in the agricultural-commodity sector, social networking, particularly Twitter, is playing a role in assessing the markets.
Traders, analysts and farmers are using the 140-character online Twitter messages, called "tweets," to share information about fundamentals, offer instant reaction to market moves and to publicize their businesses. Twitter users collect "followers" who receive their updates each time they tweet.
Farmers have long used the Internet to share information, starting years ago with bulletin boards and chat rooms. But current tools are more direct and customizable.
Jason Britt, president of Central State Commodities in Kansas City, Mo., said while older farmers have only in recent years become comfortable with text-messaging, younger farmers have taken to Twitter.
Instead of relying just on government crop surveys, or even phone calls with producers in varying parts of the country, Twitter can provide real-time feedback, he said. "What I'm finding is it's a new source out there," Mr. Britt said. "I have guys on there from Iowa, I have guys on there from Nebraska, Missouri, Illinois."
Analysts said the service seems well-suited for a sector that devours new bits of information about the condition of crops or livestock, as well as political or regulatory developments and market moves.
The information flows both ways. Arlan Suderman, analyst for Farm Futures, said he initially thought Twitter "looked kind of worthless," but that as he thought about how farmers crave real-time market information while out on their tractors, Twitter seemed like an excellent vehicle. He has 760 followers and follows 179 other Twitter users himself.
"I want to communicate to the farmer who hears on the radio that soybeans are up 30 cents why that is, and what the driving factor is behind it, in language they can understand that's not trade talk," Mr. Suderman said.
Mr. Suderman doesn't just offer up 140-character takes on the market. Many analysts' tweets are links to articles or information on their Web sites.
Mr. Britt said farmers often will post photos of their fields. Seeing pictures of a corn crop "that's as dark green as it can be, it doesn't make you bullish in the corn market at that moment," he said.
On the downside, analysts said there are a lot of superfluous tweets to weed through, such as sales pitches or farmers' updates about their child's baseball game.
Also, analysts said they have to be skeptical of the reliability and consistency of all the different sources on Twitter.
Traditional sources of market news, such as wire services, shouldn't be threatened by Twitter's growth as long as they provide fast, accurate news, analysts said. "Twitter's hit or miss," Mr. Grisafi said. "If you're going to be a professional trader, you're going to pay for information."
The spread of Twitter as a trading tool extends beyond the agricultural sector. StreamBase Systems, which makes algorithmic trading platforms used by hedge funds and brokers, drew widespread attention late last month when it announced it had developed software that allowed users to analyze Twitter messages in real time. |
