Tracking traders' understanding of the market using e-communication data.

Tracking the volume of keywords in Internet searches, message boards, or Tweets has provided an alternative for following or predicting associations between popular interest or disease incidences. Here, we extend that research by examining the role of e-communications among day traders and their col...

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Autores principales: Serguei Saavedra, Jordi Duch, Brian Uzzi
Formato: article
Lenguaje:EN
Publicado: Public Library of Science (PLoS) 2011
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Acceso en línea:https://doaj.org/article/267a2102140f4f6ca865bfc97c56ff39
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spelling oai:doaj.org-article:267a2102140f4f6ca865bfc97c56ff392021-11-18T07:35:47ZTracking traders' understanding of the market using e-communication data.1932-620310.1371/journal.pone.0026705https://doaj.org/article/267a2102140f4f6ca865bfc97c56ff392011-01-01T00:00:00Zhttps://www.ncbi.nlm.nih.gov/pmc/articles/pmid/22046335/?tool=EBIhttps://doaj.org/toc/1932-6203Tracking the volume of keywords in Internet searches, message boards, or Tweets has provided an alternative for following or predicting associations between popular interest or disease incidences. Here, we extend that research by examining the role of e-communications among day traders and their collective understanding of the market. Our study introduces a general method that focuses on bundles of words that behave differently from daily communication routines, and uses original data covering the content of instant messages among all day traders at a trading firm over a 40-month period. Analyses show that two word bundles convey traders' understanding of same day market events and potential next day market events. We find that when market volatility is high, traders' communications are dominated by same day events, and when volatility is low, communications are dominated by next day events. We show that the stronger the traders' attention to either same day or next day events, the higher their collective trading performance. We conclude that e-communication among traders is a product of mass collaboration over diverse viewpoints that embodies unique information about their weak or strong understanding of the market.Serguei SaavedraJordi DuchBrian UzziPublic Library of Science (PLoS)articleMedicineRScienceQENPLoS ONE, Vol 6, Iss 10, p e26705 (2011)
institution DOAJ
collection DOAJ
language EN
topic Medicine
R
Science
Q
spellingShingle Medicine
R
Science
Q
Serguei Saavedra
Jordi Duch
Brian Uzzi
Tracking traders' understanding of the market using e-communication data.
description Tracking the volume of keywords in Internet searches, message boards, or Tweets has provided an alternative for following or predicting associations between popular interest or disease incidences. Here, we extend that research by examining the role of e-communications among day traders and their collective understanding of the market. Our study introduces a general method that focuses on bundles of words that behave differently from daily communication routines, and uses original data covering the content of instant messages among all day traders at a trading firm over a 40-month period. Analyses show that two word bundles convey traders' understanding of same day market events and potential next day market events. We find that when market volatility is high, traders' communications are dominated by same day events, and when volatility is low, communications are dominated by next day events. We show that the stronger the traders' attention to either same day or next day events, the higher their collective trading performance. We conclude that e-communication among traders is a product of mass collaboration over diverse viewpoints that embodies unique information about their weak or strong understanding of the market.
format article
author Serguei Saavedra
Jordi Duch
Brian Uzzi
author_facet Serguei Saavedra
Jordi Duch
Brian Uzzi
author_sort Serguei Saavedra
title Tracking traders' understanding of the market using e-communication data.
title_short Tracking traders' understanding of the market using e-communication data.
title_full Tracking traders' understanding of the market using e-communication data.
title_fullStr Tracking traders' understanding of the market using e-communication data.
title_full_unstemmed Tracking traders' understanding of the market using e-communication data.
title_sort tracking traders' understanding of the market using e-communication data.
publisher Public Library of Science (PLoS)
publishDate 2011
url https://doaj.org/article/267a2102140f4f6ca865bfc97c56ff39
work_keys_str_mv AT sergueisaavedra trackingtradersunderstandingofthemarketusingecommunicationdata
AT jordiduch trackingtradersunderstandingofthemarketusingecommunicationdata
AT brianuzzi trackingtradersunderstandingofthemarketusingecommunicationdata
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