Twitter's Influence on the Financial Markets Concerns Traders

The fast response of the financial markets to tweeted news sparks fear among traders

The social media has a great influence over the life of many, but also on the financial markets around the world.

Regulators are increasingly concerned about the effect social media has on domains such as high-frequency trading.

After the Dow Jones industrial average dropped temporarily by 150 points after a Twitter hoax claimed President Obama was injured in an explosion at the White House, regulators want to take a closer look at the phenomenon, the New York Times blog reports.

The Commodity Futures Trading Commission is planning to hold a public meeting in Washington this week.

Among those invited at the meeting are dozens of high-frequency traders, who are going to discuss the kinds of safeguards that need to be put in place to protect the financial market from the effects of social media.

Last Tuesday, Syrian hackers broke into the Associated Press’ Twitter feed and made up a report that caused an immediate shift in the financial markets.

The co-president of brokerage firm Stuart Frankel & Company, Andrew Frankel says that now everyone wants to release corporate earnings on Twitter because of how rapidly such news affects their stock.

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