{"id":37066,"date":"2013-05-03T00:45:06","date_gmt":"2013-05-02T22:45:06","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=37066"},"modified":"2013-05-03T09:20:44","modified_gmt":"2013-05-03T07:20:44","slug":"beware-putting-trust-in-twitter","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/internet\/37066\/beware-putting-trust-in-twitter\/","title":{"rendered":"Beware putting trust in Twitter"},"content":{"rendered":"

Traders, both local, and international admit to a growing reliance on social media site, Twitter<\/a>, as a means to gain every possible advantage over the market.<\/p>\n

A hoax tweet sent late last month (April) from the Associated Press’ hacked Twitter account sparked a short panic in the stock market, wiping out $136 billion in market value in a matter of minutes.<\/p>\n

The tweet stated that President Barack Obama was injured in two explosions at the White House.<\/p>\n

While the biggest losers would have been those firms using High-frequency trading\u00a0(HFT), namely the use of sophisticated technological tools and computer algorithms to trade securities on a rapid basis, Local traders have warned of the dangers of relying on Twitter as a concrete news source.<\/p>\n

A new study by Global Web Index<\/a> has revealed Twitter\u00a0is the fastest growing social platform in the world by active users, while research provider,\u00a0StatisticBrain<\/a>, recently put Twitter\u2019s total number of active registered users at 554.75 million, with 190 million unique site visitors every month and 58 million average tweets per day.<\/p>\n

Traders react<\/strong><\/p>\n

\u201cTraders will use whatever they can to get a march on the market,\u201d said Mark Appleton at RMB<\/a>. He said traders can come under pressure to react to news as it happens on a site like Twitter as it takes away a vital competitive edge – time.<\/p>\n

\u201cThe faster you react the bigger the risk,\u201d creating a bigger margin for possible error, Appleton said. He stressed that a company like RMB would not rely on Twitter as a direct source without verification, but added that the site did provide a useful source for information 24 hours a day.<\/p>\n

More and more companies are starting to use social media to break corporate news, while the site is also inundated with unsubstantiated rumour and claims created through general chat.<\/p>\n

\u201cIn many respects, Twitter is the latest news wire of Wall Street. Investors have come to rely on the social medium for minute-by-minute news and opinion,\u201d Jack Ablin<\/a>, CIO at BMO Private Bank<\/a>, told MarketWatch. \u201cWe have to recognise Twitter for what it is – a social media site, and an unfiltered news source.\u201d<\/p>\n

Nadim Mohamed<\/a>, investment analyst and partner at\u00a0First Avenue Investment Management<\/a>\u00a0 said that the twitter hoax message demonstrated how quickly social media can spread disruptive misinformation \u2013 but also how rapidly it can clear such confusion.<\/p>\n

The S&P 500 slid over a percent in less than a minute and then made a full recovery just as fast.\u00a0 \u201cThe speed of information transfer is amazing.<\/p>\n

\u201cThis would not be the first time that the market has been moved because of a rumour.\u00a0 Such rumours have been in existence since before Twitter was created.\u00a0 However, I don\u2019t think we have ever seen as swift a response to a rumour,\u201d Mohamed said.<\/p>\n

He noted that there is talk of sophisticated technology, enabling computerized trading based on social media messages (amongst other data). \u201cSuch technology helps to amplify such false movements and as a result I\u2019m sure it\u2019s not the last we will see of such events,\u201d the dealer said.<\/p>\n

In April, the Securities and Exchange Commission<\/a>\u00a0issued a report that makes clear that companies can use social media outlets like Facebook and Twitter to announce key information in compliance with Regulation Fair Disclosure (Regulation FD) so long as investors have been alerted about which social media will be used to disseminate such information.<\/p>\n

More on Twitter<\/h3>\n

Twitter hack puts spotlight on social media security<\/strong><\/a><\/p>\n

Twitter is the fastest growing social platform<\/strong><\/a><\/p>\n

Twitter settles data issue with analytics firm<\/strong><\/a><\/h3>\n

Hackers hit North Korea Twitter account<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Traders admit to a growing reliance on social media site, Twitter, as a means to gain every possible advantage over the market.<\/p>\n","protected":false},"author":9,"featured_media":37075,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9882],"tags":[577,2160,5740,26,5747,3757,2214,69,5741,93],"class_list":["post-37066","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-internet","tag-barack-obama","tag-first-avenue-investment-management","tag-global-web-index","tag-headline","tag-high-frequency-trading","tag-nadim-mohamed","tag-rmb","tag-social-media","tag-statisticbrain","tag-twitter"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/37066","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=37066"}],"version-history":[{"count":12,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/37066\/revisions"}],"predecessor-version":[{"id":37077,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/37066\/revisions\/37077"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/37075"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=37066"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=37066"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=37066"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}