Why Traders Around The Globe Are Embracing Social Media

The use of social media in contemporary electronic trading is often mistakenly believed to be a uniquely American phenomenon. In reality, traders around the world are simultaneously - and enthusiastically - embracing social media platforms like Twitter as an ever increasing stronghold of financial professionals discover that the interconnectivity of today's global markets can be better understood through diverse relationships and information sources made possible through the microblogging platform.

Earlier this week, the CMC Markets Group, a leading independent financial services provider, published the second section of the latest CMC Markets "Share Trader Insight Survey: A Look Into What Drives Today's Share Traders." Part 2, entitled "Share traders and social media," puts forward compelling insights into how Australian traders, as just one example, are increasingly turning to social media.

Similar to North American, Asian, and European traders, speculators "down under" are flocking to social media at a breakneck pace to help them make more informed trading decisions. "Social media allows them to access snippets of important market information more quickly and easily than traditional methods," says the CMC report.

"As a stockbroking business," says David Land, Head of Analysis and Education at CMC Markets, "we find that social media channels are becoming increasingly popular with people who are just starting out in share trading. They provide an opportunity for them to learn how to deal with movements in the financial markets in real time."

Half of all investors surveyed who use Facebook to gain trading knowledge are aged between just 25 and 34.

"While it remains very important to get information from reputable sources, the information age has been a boon for traders. From our perspective, it has also opened all sorts of new avenues to educate traders," Land adds.

The survey reveals that there is a clear age difference in those who choose to use Twitter over iPhones to gather trading information. Twitter proves most popular with traders under 35 years of age (59%), while mature investors aged 45 and over are more likely to use their iPhone to acquire trading information.

"Social media has changed the way share traders think, with websites like Twitter providing information that may affect a trader's plan or strategy, or the way in which they enter or exit a position," Land concludes. "Twitter is particularly remarkable in that it provides immediate analysis of events in the market, not to mention almost perfectly real-time news which is replacing some of the more 'traditional' internet media."

Trading forums are a popular form of social media at 28%, followed by blogs at 18% and webinars at 9%.

Given Australians are an increasingly mobile population, it is interesting to note that a combined 17% of traders conduct at least some of their trades in transit (for example, while they are on the train or bus), at an airport or in a restaurant or cafe. Still, the large majority of traders execute their trades at home (83%), followed by at the workplace (43%).

This article originally appeared on BusinessInsider.com: http://www.businessinsider.com/why-traders-around-the-globe-are-embracing-social-media-2011-3

To read the full report from CMC Markets, click here.