26 January 2021

Impact of Social Media on the Stock Market

By DICC Institute

Social media is one of the most important sectors that is affecting all other domain in one or other way. Well, this is not the first time any field is been claiming that the effect of social media is creating a big change in the way the platform used to work before. It would be relevant to say that every sphere of our life is been managed by all kinds of social media we are engaged with. In such a situation is not at all impossible to think about the effect of social media on the stock market. The behaviour of this domain is nowadays affected due to social media at a great extent.

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Many people are reading this article are unaware of the fact the social media of today’s world is a data analyst tool that is becoming a fully-fledged business day by day. Apart from knowing these people love to spend most of their time on such a platform. This platform has been claimed to change the mindset of people making them go towards the particular product or service which is been promoted again and again on the platform. This is the main reason all the marketers want their business promotion to be on all the popular social media handle. There must be some powerful impact this platform is been applying on the people or else why the Investor of the business world would be wasting so much of their money on these social media handles. Even all kind of boom on social media has transformed the way the investors use to look at the stock market.

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We know that social media can provide the investors with a lot of real-time user opinion that can use inappropriately for exploiting a lot of information using advance technologies such as by leveraging machine learning algorithms, natural language processing techniques as well. In the past few years, the news channels have made this headline several times known as predicting the market using the alternate data mainly in the form of microblog messages. This thing is becoming quite mainstream for all the investor out there. Do people often think of some random question such as how much these methods are effective in the real market? Is it safe to do these things? And much more than that. There is some evidence that can prove that social media has a strong impact on the stock market. Let us see them one by one. The first case that would like to highlight is about social media analytics in which a firm is been initialized.

Also Read: HOW TO MAKE MONEY FROM STOCK MARKET? and Top 10 Stock Market Institutes in Delhi

This analytics firm keeps on revolving around a 4-lac Twitter account that too on the regular basis. Well, this is sure of the possibility that a lot of us is not knowing about this thing. As per the extensive coverage made in last year the in August, they told most of their clients that a positive chatter is been spreading on the platform of Twitter about the simpler option to make money in the market as compared to the risk a person takes by putting a lot of money as the investment of stock market. In social media marketing, all these things are done to manipulate the clients. In reality, social media influence is quite influencing on the mindset of the people. Like this case, there are many cases which proves social media is interfering in the market belonging to the different sector such as education, media, medical, film industry and much more than all these.

The second case that I would like to highlight is quite famous among a large group of people. This is about the blackberry buyout deal which was within the Fairfax financial last year. When the deal of about $4.7 billion was done between the investor’s group then this news was soon leaked in one of the famous papers of Canada. This was a big leak of the industry if looked carefully. Wall Street was able to get this information in just 3 minutes. I know a lot of people will be shocked when I said 3 minutes. Any delay in such a situation can lead to some serious situation. It took 180 seconds which have the intraday traders to act on such a piece of news. Within this time the client of Dataminr got an email from their clients.

 This new made quite a headline in the Newyork times. Within a small period, the whole city was talking about the same news. I can say the social media plays an important role in varies things but sometimes it even creates a problem that is very hard to be solved. Many platforms are been getting benefited from this site but when we talk about the stock market then the chances can be 50-50 both the sides.  according to the past few cases, there were 76% times the social media handle creates quite a difficult situation. All the negative comments and sometimes the pieces of advice given can turn the mindset of an individual.

Conclusion:

I hope the information was useful to all the readers. The excessive use of anything can lead to serious problems which can be quite difficult to even be solved.

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