Bloomberg News

DCM Capital Starts Trading Venue Mining Twitter Sentiment

By Nandini Sukumar
January 11, 2013

DCM Capital Ltd. plans to open a trading venue that it says will be the first to offer analysis of posts on social networks such as Twitter Inc. and Facebook Inc. (FB) to help traders gauge market mood.

The spread-betting platform, called DCM Dealer, will include a feature that calculates a sentiment rating for individual stocks, indexes and commodities when it opens next week, Paul Hawtin, founder and chief executive officer of DCM Capital, said in a phone interview today. An algorithm gives securities a rating from zero to 100, where the top end indicates the most positive feelings from social media.

“Financial markets are driven by greed and fear but we’ve never had a way to quantify emotion before,” Hawtin said. “We monitor 350 million tweets daily, 2.5 billion weekly. So now investors can monitor investors’ sentiment and human emotion on specific instruments in real time.”

DCM Capital, a London-based company formerly known as Derwent Capital Markets, started a hedge fund using social media to gauge sentiment in August 2011, according to DCM. The Derwent Absolute Return Fund closed three months later.

To contact the reporter on this story: Nandini Sukumar in London at nsukumar@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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