Reports Disruptive Technologies in Commodity Trading | Page 14

Disruptive Technologies in Commodity Trading Markets
A ComTechAdvisory Report
A Role for Social Media?
Social media have become a very popular medium
and arguably a relatively untapped source of poten-
tially useful intelligence for commodity businesses.
Twitter and industry expert blogs are already utilized
in other asset classes, such as equities, to provide
traders with both trading signals and sentiment anal-
ysis.
Unfortunately, the flood of data and information pour-
ing onto and out of platforms such as Facebook and
Twitter - with the vast majority of it being nothing
more than “noise” comprised of uninformed opin-
ions, unfounded rumors and personal experiences
– can limit its appeal and usefulness to commodity
trading professionals. However, given the ubiquitous
nature of social media, its potential value cannot be
dismissed. Social media, is now, in almost all cas-
es, the first source to identify events or trends that
could impact demand or availability of commodities
- such as localized severe weather events and other
emergency conditions tweeted by residents or first
responders. Events such as industrial accidents, civil
unrest or transportation disruptions in a producing
area can impact commodity production, deliveries or
demand…with knock-on effects on price movements
or contractual deliveries.
Recognizing the potential value of social media as an
information source, there are a number of companies
offering social media derived data products - and a
number of generic news platforms are now incorpo-
rating these tools. Additionally, software products
are now available to help traders make use of social
media, including tools to automate tr