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Online Discussions As A Stock Volatility Indicator

Is It True That The More People Discussing A Stock The Greater The Volatility Of That Stock?

I had the pleasure of having lunch with Nick Arnett yesterday. Nick hit my radar a while back as he is an active member of a web analytics discuss group I follow regularly. He made an interesting comment about the correlation between the volatility of a stock and the number of people discussing that stock online. He was quick to note that the direction of the stock price was not predictable but only a change in volatility was correlated with the number of (unique?) people discussing a stock.

There must be an option trading strategy that could take advantage of this fact(?).

Posted by Kevin McDonald on September 28, 2007 11:56 AM |

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Comments

When I did that research (eight years ago or so) it was much easier to gather the data. Yahoo, in particular, has pretty good defenses against DOS attacks, which end up "defending" it against robots that might do page-scraping. I've got to update that page you pointed to... ;-)

Posted by: Nick Arnett | September 29, 2007 07:50 AM

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