Traders Using Twitter & Social Media for Inside Info?

So, to the traders in the house, I'd like to ask you about this piece of news at Forbes, which reveals that commodity traders, especially, are using Twitter to keep tabs on the vagaries of American agriculture (for example) in the hopes of gaining access to real-time updates and sensitive inside info on everything from weather to soil conditions.

The article mainly discusses traders connecting with those on the ground (farmers, growers, etc) in the agricultural industry, but I suspect this is becoming pervasive seeing as it's a great way to get inside info from employees/companies across the board that doesn't make it into other mainstream media channels.

Of course, many businesses have made an effort to increase marketing efforts on social media platforms in the last few years, so a lot of what gets tossed around by those on the "inside" on these platforms tends to just be useless, self-aggrandizing BS and propaganda.

But, with 50 million Tweets per day, it's hard for businesses/management to keep track of what their employees are saying on Twitter, esp, let alone the gazillion other social media platforms and microblogging entities, like FriendFeed, Facebarf, MySpace, Yammer, Friendster, FriendFeed, Bebo etc etc -- and most don't. Granted, not every employee at Chrysler, for example, is likely to be connected on all of these platforms, but the truth is that social media sites have a knack for leaking (and breaking) news and sensitive info. And a lot of employees, or people on the ground are beginning to use them to stay in touch with their network, and a lot of it happens outside of exclusively private channels.

Albeit a slightly different beast, but look at what Wikileaks has done, recently releasing 92,000 documents on the war in Afghanistan, a leak comparable to the Pentagon Papers.

You may not agree with their ethos or tactics, Lord knows Fox News doesn't, and trafficking in some of this sensitive info, especially the latter (Wikileaks) case, is ethically questionable, but there's no doubt trolling and sleuthing on these networks can provide a serious leg up for those who can predict the causalities and results of these inside nuggets of data/info.

What do you guys think?

Comments (10)

Aug 7, 2010

Back in the day, we made payoffs to employees in the oil fields, coffee farmers, and a variety of agriculture "spies" for lack of a better word. We just considered it part of the research budget. It pays to know which OPEC members are cheating on output quotas, which crops are going to have bumper harvests, etc...

Today's social networking tools make that process easier, I suppose, but I still wouldn't be completely comfortable with the information unless the informant was on my payroll.

Aug 7, 2010

This is old news. Hell Shia Lebouf talked about this on Jimmy Kimmel Live back in April.

Aug 7, 2010
brooksbrotha:

This is old news. Hell Shia Lebouf talked about this on Jimmy Kimmel Live back in April.

http://www.youtube.com/watch?v=oq8p2xKXPpQ&feature... http://www.youtube.com/watch?v=TM1aaMHh7hU&feature...

I win here, I win there...

Aug 8, 2010
arbitRAGE.:
brooksbrotha:

This is old news. Hell Shia Lebouf talked about this on Jimmy Kimmel Live back in April.

http://www.youtube.com/watch?v=oq8p2xKXPpQ&feature... http://www.youtube.com/watch?v=TM1aaMHh7hU&feature...

Thanks for this. Whether or not this is old news, I'd still rather hear from traders as to the extent of social media/networking plays in their day-to-day, rather than Shia Lebouf. But, where's the line in terms of insider trading? If the information gets passed along in a public domain and isn't passed directly to a trader who then takes advantage of that, is that still illegal?

Aug 7, 2010

I'll give this a try.

For those trading OTC watermelon forwards, weather in New York has made for quite the growing season. Averaging 8-12 seeds and 4-5 watermelons per vine. Hot and humid growing season has made up for first few weeks of cold and flood conditions. Expecting better harvest than normal. Biggest concern is how late into September the growing season will extend.

Fun fact: The world's fastest growing watermelon producer is run my a Wharton MBA grad http://www.examiner.com/a-353349~Brad_Oberwager__A...
And if I get another 50 pound watermelon this year I will be sure to post pics.

Aug 7, 2010

Insider trading is LEGAL in commodity markets. The CFTC (the only financial regulatory body that SHOULD exist) understands that commodities (as the lifeblood of all economic transactions and the world at large) need price discovery and information free flow. The CFTC is also not afraid to let markets police themselves (see "Hunt Brothers" and "Silver Market Corner")...a big part of the reason why you've never seen crashes or defaults of any sort at the CME.

That having been said Twitter and all this other retarded bullshit for today's attention whorish public is usurping valuable resources in terms of the policing/monitoring it requires. Information will always get out.

Get rid of the SEC already and move to common sense rules and regs.

Aug 7, 2010

Data is all well and good but in the public good only.

Could traders or any finance employees get fired for using Twitter personally though?

Aug 7, 2010

If there's a good way to do this consistently and efficiently. Please let me know. I'm all ears.

Aug 12, 2010

Great links, thanks for posting them.

Aug 12, 2010
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I win here, I win there...

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