Can the Markets Integrate Social Media?

A senior statesmen of market data and I recently discussed the impact social media would have on the over-the-counter (OTC) market. Maybe as a journalist I'm cynical, but when covering the capital markets it is hard to be an optimist these days. To be fair, we were talking about data consumption habits that might be two or three decades away, rather than those that are coming in the next few years.
The gist of the conversation was that social media is driving people to be both publishers and consumers of information and that the old publish-and-subscribe model will fall by the wayside as new generations of social media savvy dealers and traders enter the business.
The industry is already familiar with the mechanics of the social media model, in which immense pools of users keep up with their friends, play games and explore the social networks. In exchange for free use of these environments, users provide demographic and personal information, which the operators of the social media outlets turn around and sell to marketers.
To translate that model into a financial services environment, messages about vacation photos would be replaced by messages about requests for quotes (RFQs) on OTC instruments. If today’s social media rules were applied to the financial markets, not only would the social network operator share with others where RFQs are sent, but also which dealers traders use—and how regularly—as well as which instruments and markets they prefer to trade.
Social media is predicated on consensual information leakage on a grand scale. Many people willingly hand over personal information in order to tend virtual farms or grow their fictional organized crime families, presumably because they don’t understand the value or the amount of the information they are giving away. If they knew, they would surely be horrified.
So, it is doubtful that the model could be adapted to an environment where everyone fights to stem the tide of information leakage.
Send your thoughts on the topic to me at rob.daly@incisivemedia.com.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Trading Tech
BlackRock tests ‘quantum cognition’ AI for high-yield bond picks
The proof of concept uses the Qognitive machine learning model to find liquid substitutes for hard-to-trade securities.
The future of trading takes shape
The future of trading across the capital markets and the drivers likely to shape the ever-evolving industry
On GenAI, Citi moves from firm-wide ban to internal roll-out
The bank adopted three specific inward-facing use cases with a unified framework behind them.
FactSet-LiquidityBook: The buy-side OMS space continues to shrink
Waters Wrap: Anthony spoke with buy-side firms and industry experts to get a feel for how the market is reacting to this latest tie-up.
Examining Cboe’s lawsuit appealing SEC’s OEMS rule rejection
The Chicago-based exchange has sued the regulator in the Seventh Circuit Court of Appeals after the agency blocked a proposed rule that would change how Silexx is classified.
Lucrative market data deal with LSEG fuels Tradeweb’s record quarter
The fixed-income trading venue realized gains from its 2023 deal with the London Stock Exchange Group, amid soaring revenues from market data providers industry-wide.
Is overnight equities trading a fad or the future?
Competition is heating up in US equity markets as more venues look to provide trading from twilight to dawn. But overnight trading has skeptics, and there are technical considerations to address.
We’re running out of datacenters! (But maybe AI can help?)
The IMD Wrap: Datacenter and cloud adoption is being pushed to its limits by AI. Will we simply run out of space and power building AIs before AI figures out how to fix it?