In one example cited by StockPulse, the computer has to learn the difference between “hold” as a verb versus an exchange-traded fund with a ticker containing the same characters.

It took some time for MarketPsych’s team to figure out what different emojis mean in different cultures, or that British traders talking down a stock might use more subtle insults. If a new slang emerges, the dictionary for the machines needs to be updated by the humans. “Some are just trying to find ways to protect themselves.”īut for the form of artificial intelligence known as natural-language processing, message boards aren’t as straightforward as, say, figuring out signals from a corporate executive on an earnings call. “Some are calling us because they’re trying to take advantage of the herd,” said Richard Peterson, a board-certified psychiatrist who founded MarketPsych. Then the process gets repeated across swaths of securities. It tries to figure out the intensity of bullish calls from cues like “market leader,” emojis, the use of future tense, even expletives. An algo trained by a vendor like MarketPsych then records the ticker and sweeps the post for trading sentiment signals.

is worth more than four times its stock price. A Reddit user is waxing lyrical on why BlackBerry Ltd. A strategy of simply buying the five companies most discussed on WSB in the previous week could have returned 61% in 2020, a backtest by data provider Quiver Quantitative showed. A strategy of following the herd would have yielded big profits, in retrospect.Īccording to Stockpulse, an indicator measuring GameStop’s buzz on Reddit first peaked in early December, a solid month before its price started climbing.

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