06.15.2016

CBOE to Develop Series of Social Media-Based Strategy Benchmark Indexes

CBOE – CHICAGO – Chicago Board Options Exchange® (CBOE®) announced today that it has entered into an exclusive licensing agreement with Social Market Analytics (SMA) to develop a series of sentiment-based strategy benchmark indexes based on SMA’s social media metrics.

SMA, headquartered in Chicago, is a leader in providing actionable intelligence from social media sources. SMA data analyzes social media streams to estimate market sentiment. SMA’s patented process extracts relevant Tweets, validates their sources and evaluates their meanings. Metrics are converted into actionable indicators called S-Factors, designed to capture the signature of financial market sentiment and provide a leading indicator of market movement.

CBOE is exclusively licensing SMA’s proprietary data to create strategy benchmark indexes and plans to introduce the first index this summer.

“Extracting information from social media to make investment decisions represents a new and promising frontier in strategy benchmarking. We believe that benchmark indexes based on Social Market Analytics’ state-of-the-art metrics will provide signals for investors to identify potential investment ideas,” said William Speth, Vice President, Research and Product Development, CBOE. “Our research suggests that there is a high correlation between the price movements in stocks and SMA’s data.  Investors could potentially use these benchmarks to build strategies to enhance risk-adjusted returns in a portfolio.”

“SMA is thrilled to have been chosen by CBOE to partner on creating a family of sentiment-based benchmark indexes,” said Joseph A. Gits IV, CEO of Social Market Analytics. “CBOE is an unrivaled product innovator and a leader in the index space and SMA is a leader in providing actionable social media metrics.  We look forward to working with CBOE to create these first-of-their-kind indexes.”

About Social Market Analytics:
Social Market Analytics is a Chicago-based firm that provides institutional investors (banks, hedge funds, brokerages) with streaming up-to-the-minute social media quantification and analysis that can help them outperform the market (see: www.socialmarketanalytics.com). Its patented technology has consistently proved that the Tweets of professional traders can help both institutional and individual traders outperform the market.

Related articles

  1. More than 15 sell-side and 20 buy-side firms have joined the platform.

  2. Analytics will cover portfolio construction, pre-trade risk and post-trade performance attribution.

  3. Daily Email Feature

    Data Analytics in Focus

    Virtu aims to help clients interact with markets more efficiently so they can mitigate risk and lower costs.

  4. ESG Matters in Fixed Income

    ESG is increasingly at the forefront of decision-making for investment managers and asset owners.

  5. Users can manage cloud storage of client-specific liquidity streams and monitor rates across FX products.