Information Day Trading

information day trading

Back in December, I had the opportunity to speak at the Defrag Conference alongside Dick Hardt (now at Microsoft) and Chris Shipley of DEMO.

During that talk, I referred to the trend of “information day trading” — the idea that platforms like Twitter have turned real-time and social information into a new form of currency. On average day I probably share 5+ links on Google Reader alone.

This trading results in massive competitive advantages: whether as an investment in an under-the-radar startup, stock market insights or competitive intelligence prior to a sales meeting. StockTwits has built an entire business on this premise.

In the past I have likened some of this information harvesting as sifting for gold using social filters. This is a major trend and with recent advances in real-time search, which TechCrunch dubbs ‘mining the thought stream’ the opportunities are staggering.

Information harvesting, using social filters to “bubble up” what is most valuable, has been used for years in the real world. When several persons with high social capital arrive at similar conclusions, or make reference to the same thing independently of one another, you know it’s worth paying attention to.

Back in 2005, Fred Wilson (a venture capitalist) wrote about the role that social filters play in his deal making, particularly in use of multiple sources to validate a concept’s potential:

“The first time I hear about something, I ignore it. The second time, I go look at it. The third time, I invest in it.”

Fred Wilson also recently posted on the idea of “Passed Links” — hyperlinks that are passed between users on social networks. Here’s a video of Fred talking Passed Links at the 140 Conference.

Nassim Taleb, author of the Black Swan, has been quoted as stating:

“Don’t read newspapers for the news. The best filter(s) to know if the news matters is if you hear it in cafes, restaurants, or at parties.”

Below are the major players and platforms being used to trade and share information:

  • Digg – The original service ‘bubbling up’ information via crowd sourcing
  • – The pioneer in socializing web bookmarks
  • FriendFeed Likes & Search: FriendFeed is taking “liking information” mainstream. FriendFeed’s real-time search opens the possibility of further insight into who-likes-what
  • Facebook Status Updates: Links: Just last week, Facebook seemingly cloned FriendFeed by adding the option for a “like” link on News Feed items.
  • Yammer/SocialCast – Socialcast uses a “like” feature applied in an enterprise context
  • Google Social Graph Search – Google rolled out a new voting system several months ago, allowing users to vote up and down Google results
  • – is a URL shortening service created by Betaworks.
  • Stocktwits – traders exchanging links and tips related to equities

You might also enjoy my posts on Information Sifting and Searching Emotions in Real Time


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