Can the Markets Integrate Social Media?
![robdaly-headshot robdaly-headshot](/sites/default/files/styles/landscape_750_463/public/import/IMG/762/101762/robdaly-headshot-580x358.png.webp?itok=vDU7KFE5)
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
JP Morgan touts DLT, tokens for collateral management
Distributed-ledger technology could make moving non-cash collateral more efficient, said managing director Toks Oyebode during an Isda conference on Thursday.
Waters Wrap: The changing definition and perception of blockchain
Anthony says that questions of definition and perception are killing DLT projects in the capital markets—oh, and a lack of proven implementations.
BlackRock to integrate Aladdin and Preqin to create new private markets platform
CEO Larry Fink calls combining the two platforms “maybe the biggest opportunity in 10 years.”
Ace high or busted flush? Digital Asset’s mixed fortunes mirror DLT adversity
The vendor hoped to remodel post-trade using blockchain technology—and it still might—but its bumpy progress raises questions over the future of DLT in finance.
This Week: BlackRock/Preqin, Trading Technologies, FIA Tech and more
A summary of some of the past week’s financial technology news.
Adaptive’s Aeron goes live on Microsoft Azure Marketplace
The messaging software used for building bespoke trading platforms is now available on Microsoft’s marketplace, making it accessible through major cloud providers.
Bloomberg, industry bodies push back on Cboe’s proposed OEMS rule change
Some industry bodies disagree with the options exchange’s proposal to carve its Silexx OEMS out of the SEC’s definition of an exchange facility and place it into a separate business line.
Waters Wrap: CME, Google and the pursuit of ultra-low-latency trading
CME Group and Google have announced Aurora, Illinois, as the location for the exchange’s new co-location facility. Anthony explains why this is more than just the next phase of the two companies’ originally announced project.