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Can 'Trading on Tweets' Really Make Money?
CNBC.com | January 24, 2012 | 02:55 AM EST

Social media websites like Twitter and Facebook have become increasingly important to high frequency traders looking to anticipate market moves before they happen, but could they eventually become as significant as traditional business news providers in the world of high speed trading?

Major news and financial information providers such as Bloomberg, Dow Jones and Thomson Reuters already offer services that filter market news from company websites and social networking websites, but experts gave mixed views on whether social networking sites would be seriously used to influence portfolio positioning.

“A lot of news is made around a company via social media, search engines, product evaluation sites, where there’s a lot of information available about companies’ products and that turns into news later on, so if you want to basically find out what will be news tomorrow you have to look at [social media] today,” Peter Van Kleef, Managing Director at Lakeview Capital Market Services told CNBC.com.

However, Van Kleef added, more sophisticated methods of analysis need to be developed before hedge funds and other major players in the European high speed trading world see social networking sites as credible enough to influence portfolio positioning.

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