Having a ton of followers on social media is a good thing as it means that with a photo or a few words, you’ll be able to reach out to many people at once. However sometimes one needs to be careful of what they say because of that reach, something that traders on Wall Street are starting to discover with President-elect Donald Trump.Recently Trump posted a tweet about how the F-35 program was a waste of money, and following his tweet, Lockheed Martin’s market value dropped by a whopping $4 billion. While this is bad news for the company, traders are realizing that they can actually make money off Trump’s tweets and are looking to develop an algorithm that will take into account his words in their trading models.
According to Zachary David, a senior analyst at KOR Group, he says that such a strategy does carry big risks, but we guess high risk does yield a high reward. “There are people diligently working to create algorithms for Trump’s tweets, and if he continues to increase the size of the data set then we’ll likely see full automation sooner than later.”
Whether or not this will be successful remains to be seen, but without doubt Trump’s current position and his legion of followers will have an impact on markets whether they like it or not.
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