Desperate HFT Algos To Scour Twitter For Momo Feedback

Tyler Durden's picture

In yet another example of just what a farce our market has become, it appears that HFT algos, no longer able to freely frontrun the market courtesy of counter HFT-measures offered by major banks and an SEC which has started sniffing around illegal HFT activity, have stooped to the second-lowest rung in the ladder: scouring through momo trader tweets on Twitter, particularly those from the StockTwits network and somehow converting that into actionable "intelligence." Because while until now some amusing attempts at money management using the garbled noise of Twitter had been implemented, all of them relied on human eyes to translate content, going forward it will be robots doing the actual analysis, not to mention sarcasm translation. STM reports: "A Boulder, Colo., collector and redistributor of comment expressed on social media networks Thursday will launch a pair of streams of data from Twitter and the securities discussion site StockTwits that are 'normalized' and ready to be fed to computers for analytical processing. Gnip said it has prepared the streams as part of the launch of a product it calls MarketStream, that is designed for use by hedge funds and high-frequency traders. The move follows the launch in May of a social-media-based hedge fund in London. In that launch, Derwent Capital Markets said the fund it created would try to achieve consistent above-market returns from real-time analysis of comments on social data." Well actually if they really want above market returns they should also add Yahoo Finance message boads to StockTwits: that will really put the bind on Steve Cohen to come up with new and improved ways to generate information arbitrage. At that point the entire momo crowd in the whole world will be swaying the market like an explosive-laden boat full of news reactive lemmings, who believe they move the market, only to receive terminal margin calls within days. But, yes, the safety of the crowd is soooo nice.... Until it isn't. As for the algos, we can bet what side of the trade they will be vis-a-vis the prudent investor subsegment that chases market heatmaps in a market in which VIX 30 is the new normal.

More on this latest attempt by vacuum tubes to scrape the proverbial bottom of the barrel:

In the Gnip case, the streams of tweets have been turned into data in a uniform or 'normalized' format that hedge funds or firms of any type that rely on automated processes for making high-speed trading decisions. And those streams are intended for use along with other statistical and news-based sources of market data.

 

The launch Thursday is being made in conjunction with StockTwits, a Web site and service whose users comment solely on capital markets events and individual stocks.

 

Initially, MarketStream will actually provide two streams of normalized data: One that relays comment from Twitter, the progenitor of the concept of a single user broadcasting 140-character messages to the web at large, and StockTwits, which created the $(TICKER SYMBOL) tag that lets tweeters identify exactly which stock a message is talking about. Such tags allow users and computing systems to quickly pick up content relevant to a single stock such as KO (Coca Cola Company).

And the punchline:

The combination of the "broad" feed from Twitter and "specific" feed from StockTwits will translate the "voice of the market,'' in McGuire's term, into "workable data" for algorithmically-driven trading systems.

Well, as long as it does not translate into a "picture of the market."

Nor, of course, of the abovementioned companies IPO chances...

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gojam's picture
  • Get ready for Twitter flash crashes. The final tweet from the canary in the coal mine.
Canucklehead's picture

How would you normalize the word BITCHEZ or FUCK?

Hansel's picture

@zerohedge will control the algo-bots!  All hail our new @zerohedge overlord!

aldousd's picture

this would be vulnerable to "Twitter bombs" just like Santorum was to Google bombs.  

Nascent_Variable's picture

All I want for Christmas is to watch the entire US stock market crash into oblivion because of trolls on Twitter.

fonestar's picture

Twitter Bombs!

 

"OMG, Bove said to sell everything!  The sky is falling!"

TheFourthStooge-ing's picture

A Magic 8-Ball would be at least as accurate as this system, with the advantage of not being vulnerable to a denial of service attack.

 

homersimpson's picture

Quick! Set up 100 twitter accounts and type "$FAZ and GOLD has lots of upside" on all 100 twitter accounts..

101 years and counting's picture

since you're not pre-approved for lying (like fatty liesman), the sec will have you arrested.

PunkSgt's picture

I have 20  robotic twitters already jamming muther fucker!!! You don't even have to lie, you just have to jam it. The machince won't know the difference between buy, sell, hold. LOLs 

PunkSgt's picture

I have 20  robotic twitters already jamming muther fucker!!! You don't even have to lie, you just have to jam it. The machince won't know the difference between buy, sell, hold. LOLs 

fizz's picture

The thing is, these HFT's will 100% be fading any trends on Twitter. Making people capitulate is more profitable than following their lead.

dracos_ghost's picture

#Occupy Twitter Next?

We should all just start tweeting ridiculous headlines into this tweet and have the algos go schizo.

JSD's picture

But it's Friday...give it a break!

GeneMarchbanks's picture

Who-said-what-markets

OS2010's picture

Stock-"twits" -  loooove it!

NotApplicable's picture

From the "You Just Can't Make This Shit Up" category...

So, which will happen first, an Ashton Flash Crash, or a Kardashian one?

Beatscape's picture

Fasinating... I can't image that they could classify momo stock Tweets as true intelligence.  It would be too easy to code up a Twitter bot that would generate all kinds of false messages to trip up your competition.  Trick them into taking a position based on seemingly legitimate stock Tweets, take the other side of the trade and wait for them to realize their folly and bail out and then close the trade.

NewThor's picture

Legitimate stock tweets? HA HA HA HA HA HA HA HA HA HA 

Hephasteus's picture

Weird how sociopaths try to find some way to use social networks in their pathology. It's all so logical at this point.

DormRoom's picture

Another reason why you should fear the google-facebook complex.  Both companies have instiutionalized surveilllance. Worse, they have turned surveillance into a multi-billion dollar market. And its outgrowth will lead to a new police state apparatus.

 

We are all fouccaultD now.

Hephasteus's picture

I'm long bluetooth douches. It's a web site. Check it out.

alien-IQ's picture

the comedic potential of this information is...INFINITE!

Ivanovich's picture

Kill the bots.  Kill them all.

NewThor's picture

#SKYNET #KILL #YOU #DRONE #ARMY #UNSTOPPABLE #PUNY #HUMANS

RobotTrader's picture

Don't forget Investor's Business Daily's website

I bet tons of CANSLIM junkies are furiously scanning the Top 50

Looking for buys today based on "proper bases", yada, yada, yada

http://clearstation.etrade.com/cgi-bin/bbs?post_id=9900313

 

lieutenantjohnchard's picture

robottrader: when a permabull turns cynic after repeated losses.

Manthong's picture

Maybe they could start a series of rumors from S.E.T.I. and juice the markets with hopes that Vulcans are on the way with limitless dilithium crystals.

They could get weeks out of the on and off efforts of Ambassador Soval to convince the Vulcanstag to go along with sharing the technology that solves all of our problems.

dwdollar's picture

Liesman and Cramer should demand the Vulcans take more action to save Earth.

Matt1973's picture

What happens if we all go on Twitter and post how great AAPL is....will it go up?

Roland99's picture

They're just going to follow Robo's feed.  I mean, after all, who knows better??

 

LeBalance's picture

dangerous children need to be put someplace where they can not hurt others.

hondamikesd's picture

O/T, but I think ZH'ers will appreciate it. Why Gold? From a chemistry point of view: http://www.slatev.com/video/why-gold-why-not-argon/

TooRichtoCare's picture

Great...so all these morons who post all kinds of sensationalist pumping headlines, or bashing headlines, on Yahoo message forums will now go into overdrive.  

The Paid Bashers. People who get paid based on the number of bashing posts they post, under multiple aliases....they have fake conversations going on between various people who are all actually the same one guy, and they give themselves fake "5 star" ratings and bombard anyone who argues against them with "1 star" ratings....

The Deleuzian's picture

I'm surprised it took the robots this long...

Hugh_Jorgan's picture

I find it amazing how little the architects of this brilliant concoction understand the fundamentals of moral hazard. Yeah, there is no way to subvert an uncontrolled, unregulated market data to fleece the unwashed masses. I would hope for a short life for this crap, but I know what follows will be even more half-baked.

slewie the pi-rat's picture

this is grrrrreat!

why be so negative abt the styooopid hiFreeks trying to front-run the tweets?  all's fair in intel, altho i agree this is right up there with dumpster diving and going thru sacks of last week's garbage

maybe they can develop a little robot spyware to help them;  tell them when someone is preparing to twitter

jiggerjuice's picture

OT

Everyone should Tweet that Effen is going the fuck down. Sick of these "mouse rollover" ads popping up all over my face. I move my mouse up to the address bar quite frequently, meaning im getting Effed in the eye at least once every five minutes.

Waiting for HFT to get plugged into ZH by accident. SP 666 in 5, 4, 3, 2...

Hephasteus's picture

No it's not. You can use it but you must use it in conjunction with peer guardian. Else it just collects the information and phones it home to it's website.

StychoKiller's picture

Go here:

http://www.mvps.org/winhelp2002/hosts2.ht

Install the file(s) according to directions, your browser won't even load most ad sites.

Texas Ginslinger's picture

How can we steer the HFT crowd toward Tilson's tweets..............???

firstdivision's picture

LOL at the attempt to create a short squeeze.  Too bad for the bulls, there's not too many shorts to close. 

Byte Me's picture

Brilliant!!!

HFT's trade on noise now already. Can't wait for the flash ramp/crashes. Must remember to twat that I've sold 10mil AAPL.

NotApplicable's picture

I'm eagerly awaiting their consumption of ZH threads.

*rubs hands while cackling madly*