HedgeChatter Review – Monitoring Social Media For Stock Markets

About HedgeChatter

HedgeChatter is a social media sentiment dashboard for stock markets. It’s a web-based SaaS platform that analyzes social conversations of over 7,600 US equities. Social sentiment is sold as a predictive edge by HedgeChatter, they claim the platform’s main use is to “identify stock and market moves before they move.” Learn more in our HedgeChatter review.

The platform uses various data science technologies like artificial intelligence, NLP (natural language processing), and machine learning to process the vast amount of social data and draw insights from it. In a sense, HedgeChatter is similar to StockTwits but with more advanced analysis tools and less noise from individual messages.

According to HedgeChatter’s overview white paper, they see their platform, and as an extension, sentiment analysis, as providing the most value to technical traders.

HedgeChatter Pricing

HedgeChatter has a few plans with different pricing for each one.

Advanced Dashboard – US Stocks

This plan features:

• Sentiment analysis
• Manipulation index
• Predictive Analytics
• Social alerts

It’s designed for retail traders/investors.

Price: $29.95 per month

Advanced Dashboard – Cryptocurrency

This plan features:

• Sentiment analysis
• Manipulation index
• Predictive analytics
• Social alerts

It’s designed for traders, hedge funds, and universities

Price: TBD, the platform is not yet released.

HedgeChatter API – US Stocks

This plan includes

• Sentiment analysis
• Manipulation index
• 27 key metrics
• 4 social alerts

It’s designed for quants, hedge funds, and universities

Price: $29.95 per month

HedgeChatter Institutional – US Stocks

This plan includes:

• Sentiment analysis
• Manipulation index
• Predictive analytics
• Social alerts

It’s designed for wealth managers, prime brokers, hedge funds, and sell-side analysts.

Price: Must contact HedgeChatter to receive pricing as found in our HedgeChatter review.

HedgeChatter Key Features:

Reputation Index

When one thinks of using social sentiment like Twitter tweets to glean insights into stock market movements, the thought that this type of analysis is easily manipulated inevitably soon follows. It seems easy for any sophisticated programmer to create massive amounts of social profiles to boost bullish or bearish social sentiment for a particular stock or derivative.

This is where HedgeChatter’s Reputation Index comes in. HedgeChatter CEO James Ross told the Summer Trading Network that they “use a reputation index that shows how often people have been right or wrong in the past, and we use that information to create our signals and alerts. It’s not just an information play”

Stocks Trending

One of the main features on the HedgeChatter Dashboard as found in the HedgeChatter review is the Stocks Trending feature. Instead of tracking stocks that are trending in price, it tracks stocks that are trending in the way of social media sentiment. There are two time frames in the Stocks Trending feature, last 24 hours, and real-time.

Here are some of the key analytics that I pay close attention to that are tracked in the Stocks Trending feature:

Top Stocks by Social Chatter Volume

This identifies the stocks with the highest volume of pure social media comments, whether positive, negative, or neutral. This doesn’t give insight into the sentiment, but how many people are talking about it in general. This high chatter volume is likely to coincide with actual stock volume, which can create trade ideas.

Top Stocks by Social Sentiment Volume

This identifies the stocks with the highest volume of sentiment related chatter, comments which have a defined view, whether positive or negative. Neutral comments merely mentioning the stock will not be counted in this volume. This doesn’t tell you the direction of the sentiment, just how many people are opinionated on a given stock. This is similar to the social sentiment scanners in ETRADE Pro and Trade Ideas.

Today’s Top Positive/Negative Sentiment Leaders found in the HedgeChatter review

This identifies stocks with the highest volume of positive or negative sentiment comments. This can often serve as a leading indicator of the price, and can also be used as a contrarian indicator when you’re bearish on a stock or a catalyst.

HedgeChatter Social Alerts

The social alerts feature is a great place to mine for trade ideas. There are four distinct types of social alerts triggered by HedgeChatter as found in the HedgeChatter review:

Upside Momentum

This is when a stock rapidly rises in bullish social sentiment, indicating the early signs of a catalyst or reversal.

According to HedgeChatter documentation, these are the four metrics that Upside Momentum is comprised of:

• Spike in Chatter Velocity
• Spike in Sentiment Velocity and indicating a Strong Buy
• Spike in Chatter Volume
• Spike in Sentiment Volume and indicating a Strong Buy

Downside Risk

This is the inverse of the Upside Momentum alert. It’s when a rapid rise in negative social sentiment occurs in a stock.

According to HedgeChatter documentation, the alert is comprised of these four metrics:

• Spike in Chatter Velocity
• Spike in Sentiment Velocity and indicating a Strong Sell
• Spike in Chatter Volume
• Spike in Sentiment Volume and indicating a Strong Sell

Significant Event Spike in Chatter

This alert serves as a precursor to Upside Momentum or Downside Risk alerts, as the actual direction of the sentiment is not quantified. It’s merely a significant spike in chatter regarding a given stock.

According to HedgeChatter documentation, the alert is comprised of these two metrics:

• Chatter Velocity
• Chatter Volume

Significant Spike in Sentiment

This alert also serves as a precursor to the directional Upside Momentum and Downside Risk alerts. It is a significant, rapid rise in social sentiment in a given stock.

According to HedgeChatter documentation, the alert is comprised of these two metrics:

• Sentiment Velocity
• Sentiment Volume

Social Alert Screener

This feature uses the alert types detailed above, and screens for them. The screener is pretty simple, one can choose from which alerts they’d like to screen for, then sort the results by market cap, date of alert, and daily returns.

Stock Outlook

This feature allows you to look at the sentiment of a specific stock.

Chart

The chart on the Stock Outlook page tracks price, with the volume being the amount of stock chatter rather than actual trading volume. The alerts are placed along the price chart at the date that they occured. This allows you to easily view the outcomes of alerts. Looking at this chart of Tesla, the alerts have significant equity as leading indicators.

Sentiment Analysis

This simply shows sentiment from various time periods compared to each other, with the price changes included.

Manipulation Index

This is a hidden away feature that should be pushed in your face more. It’s one of the more valuable aspects of the HedgeChatter platform, and solves one of the biggest issues within market sentiment analysis: manipulation.

The Manipulation Index simply looks at the amount of sentiment and chatter that is faked/manipulated. In other market sentiment platforms and algorithms, the lack of this feature is sure to create many false signals.

Like the Sentiment Analysis feature, it compares today’s manipulation to lookback periods.

 

Watch Lists and Portfolios

While HedgeChatter serves as a stock discovery platform and screener, it also has tools for monitoring your own portfolios and watch lists. The platform has built-in functionality for keeping track of watch lists and personal portfolios. You can build a single watch list and a single portfolio, which is slightly limiting, but still provides additional value.

The watch list provides a simple dashboard for monitoring recent alerts and changes in social sentiment for stocks you follow. There is also a section for watch list alerts that will provide the most recent alerts for stocks you follow.

Customer Service

My experience with the HedgeChatter customer service team started off very positive. I inquired about upgrading my plan from the standard plan to the professional plan. I received a fast response and the HedgeChatter team upgraded me for free (without knowing I was writing a review). Everything went downhill from there.

When it came time to cancel the service, there was no option to cancel my subscription from the members area (which is already frustrating). I reached out to customer support again and didn’t receive a response. I reached out another three times over the next two weeks to make sure I wasn’t charged the monthly subscription fee after my current month ended. Unfortunately, I was charged the fee and still haven’t heard back from the HedgeChatter support team.

Pros

• Identify manipulated social sentiment
• Sophisticated algorithm does a lot of the interpretation for you
• Specific trading signals based on quantitative metrics

Cons

• UI is a bit clunky
• Some assets don’t load, even after refresh
• Customer Service Has Been Unresponsive

Summary For HedgeChatter

HedgeChatter is an interesting platform that will surely generate trade ideas. However, the platform is pretty one dimensional. It finds various ways to implement it’s data in different forms, but in the end, you’re left with a bunch of features that essentially measure the same thing. A “trimming of the fat” on this platform would surely streamline its use.

A large criticism I have of this platform is that the platform itself doesn’t seem to justify itself. One has to think that this social sentiment dashboard would have much more value integrated into existing platforms, Bloomberg on the institutional level, and Thinkorswim/Money.Net on the retail level. As it is, there are so many tools different windows to open, that to have an entire platform for just one niche piece of analysis, social sentiment, seems redundant. This is of course, my opinion, and a lot of users may enjoy the platform, and I do too. I just think it’d work better as an integration.

Overall, I love what HedgeChatter is doing, but deploying it as a standalone platform is questionable.