Twitter (TWTR) , with 33 million worldwide users at the end of 2017, is fertile social media ground for a myriad of reasons, and for many profit-minded industries.
The latest -- and potentially one of the greatest -- sectors plugging into Twitter is the investment industry, which is turning to artificial intelligence to roll out new Twitter-based stock trading platforms.
TD Ameritrade (AMTD) is at the front of the line in developing AI-based trading on Twitter. On Feb. 7, 2018, the investment behemoth rolled out an AI-powered chatbot that provides stock trading, access to market information, stock quotes and educational videos on Twitter Direct Message on Feb. 7. (TD Ameritrade used the same technology to allow stock trading on Facebook (FB) Messenger last autumn.)
"We're embracing the power of Twitter as a customer service tool because we recognize that consumers are turning to social platforms as the new 800 number," says Sunayna Tuteja, director of emerging technology and innovation at TD Ameritrade. "Twitter is a platform that investors are already using to chat with us and get breaking news that can impact the markets, especially during busy times like these."
"Now, we're taking their experience to a whole new level, further helping investors gather news, do their research, get real-time quotes, and take action -- all without leaving the Twitter Direct Message platform."
In an email, TD Ameritrade stated it sees more than 80% of its' social media chatter volume on Twitter, and that the Twitter platform regularly offers a summary of sentiment around a given stock based on what people are talking about, including possible trends and clues about a company's health and future. The goal is for TD Ameritrade's Twitter chatbot to decipher that chatter to provide more intelligence for investors, and to provide them a mechanism for making stock trades.
"It will be a high tech, high touch experience since participants will be able to have a human support at any point in the process," the company noted. "Clients will be able to connect privately with TD Ameritrade on Twitter and share publicly with their community."
The idea of leveraging social media, and especially Twitter, as an investment trading tool, is an intriguing one for Wall Street watchers.
"Twitter has huge potential to become a tool particularly for day trading," notes Paul Koger, head trader at Foxy Trades, LLC. "That's especially the case for momentum plays, where it's vital to notice stocks that are on the move or beginning to break out of their ranges."
Twitter is already a favorite social platform for most traders to discuss their ideas and announce stocks they're trading, Koger says. "Thousands of traders change ideas and discuss/comment on various trades on Twitter, so it has the makings of a great social trading platform and mobile app," he notes.
Before that reality can take hold, Twitter and its outside technology developers have some work to do.
"In order to achieve success as a stock trading platform, Twitter would need to develop a dedicated section for stock trading purposes," Koger explains. "Otherwise the constant off-topic batter might kill the usefulness of real-time alerts, as they might go unnoticed."
Other investment industry professionals say the actual trading mechanism isn't what matters -- it's the useful chatter.
"There is a possibility of linking a stock trading platform to Twitter that would allow you to trade the stocks that are trending," says John Anagnos, chief investment officer at Aetolia Capital. "It could be Twitter or a collaboration with another firm that would employ the trading."
Depending on Twitter for trading information and execution does come with some risks, however.
"There are many financial and technology data-based firms currently collecting and highlighting social media trends in stocks that some investment managers use," Anagnos adds. "I'm sure there are algorithms that track the sentiment on Twitter and then use that information as an additional factor. My fear is that accounts on Twitter can be hacked or reproduced by bots that could manipulate interest in a specific security."
"There are many good trading platforms and you can use many sources to track sentiment that might be on Twitter, Google (GOOG) or other sites," he adds. "You don't need to trade within Twitter."
Twitter lovers who love to invest can only hope that the company, along with social media-minded investment firms, work out the kinks.
After all, turning chatter into stock trades that matter is too good an idea not to take flight, 280 characters at a time.