Tuesday, May 29, 2012

Twitter Hedge Fund Goes Silent





Finalternatives reports that the world's first Twitter-based hedge fund has tweeted its last—and quietly, at that. Derwent Capital Markets shut its much-ballyhooed $100 million hedge fund after just one month last year. The London-based firm said its proprietary trading model analysed the use of "calm" words on the social networking system to predict movements in the Dow Jones Industrial Average, with 87.6% accuracy.
But in spite of the hype that surrounded the fund's launch, and its 1.85% return in its only month last summer, one of Derwent's largest investors suggested, perhaps appropriately, that the social network-based trading system would be appropriate for crowd sourcing. So Derwent has changed gears, deciding to offer its trading signals to day traders.

The new system will overlay Derwent's Twitter-based measurements on IG Group's spread trading platform. Hawtin said he hopes to get between 3,000 and 5,000 customers, with Derwent paid a portion of IG's fees....

No comments:

Post a Comment