Thomson Reuters Develops a Psychological Edge

Reuters/Brendan McDermid

Michelle Price of Financial News reports that Thomson Reuters, the information giant, will this week launch a new trading tool that uses automated psychological analysis to gauge human emotion and sentiment in news and social media.

The development highlights the extent to which behavioural finance is being applied to the world of trading and investing.

Rich Brown, head of quantitative and event-driven trading solutions at Thomson Reuters, said: “With this new tool we are focusing on investors’ and traders’ behavioural attitudes and how they can inform financial decisions.”

Thomson Reuters has teamed up with MarketPsych, a US consultancy that develops financial applications based on behavioural economics, to develop a set of real-time indices to gauge emotion and sentiment across a range of sectors and asset classes.

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