As a binary options trader, you know that the news moves the market and causes trends. However, have you ever thought about how you get your news? I recently came up on a poll from The Street that brought new information to light for me. Most people aren't getting their news from digital news websites; instead, news is becoming a much more social thing. The poll found that while digital news websites take about 19% of the pie, a whopping 72% of people went to one of three social networks for their digital news; Facebook, Twitter, and LinkedIn. Today, we'll talk about why this makes a difference, which of the social networks is currently the leader, and what it means for their stocks moving forward.
Why This Makes A Difference
Digital news is a big deal; such a big deal that companies like CNN, Forbes, Bloomberg, and more have spent millions of dollars on building the perfect websites to attract news seekers. The bottom line is that there's a ton of money in news! Think about it, Daily Finance sold to AOL for $351 million! So, if you look at it that way, the social network that serves up the majority of the digital news will most likely make quite a bit of money from ads associated with that news.
So, Who's In The Lead?
- Twitter – Of all of the users that answered the poll, 34% said that they got their news from Twitter. This makes a lot of sense because if you think about it, that's what Twitter was designed for. As a micro-blog social network, characters in posts are limited; so, Twitter is more like a stream of headlines. This also explains quite a bit when it comes to the company's earnings. While they are still struggling with new users, Twitter did generate far more than experts expected in revenue. Chances are, the spike in revenue had a lot to do with why people use the social network rather than how many new people are finding it!
- Facebook – In second place, you guessed it, Facebook. If you're surprised, don't worry, you're not alone. As the world's largest social network, I assumed that Facebook would be in the lead when it comes to serving up the news. However, it makes sense that people would be using Facebook more to connect with friends, colleagues and family than to read the news. Nonetheless, Facebook does serve up a pretty large portion of digital news. According to the poll, it's where about 31% of online news seekers are going.
- LinkedIn – Finally, we have LinkedIn. To be honest, I didn't even expect LinkedIn to be considered in the running for this. Nonetheless, the majority of LinkedIn users are professionals, and are a prime audience for news. With that said, according to the poll, LinkedIn serves up about 7% of digital news to respondents.
What This Means Moving Forward
For the most part, this means that these three social networks will most likely never meet MySpace's fate. The reality is that investors have been asking questions about the stability of social media in the market, leading to high volatility. However, social media has turned into something far more than a way to connect with friends and family, it's becoming ingrained in our day to day lives; even in our news consumption habits.
What This Means For Binary Options Traders
As a binary options trader, it's your job to look for trends to capitalize on. While investors question the validity of social media as a long term investment, it's causing quite a bit of volatility in the market. Just look at Twitter, Facebook, and LinkedIn over the past month and you'll see what I'm talking about. Binary options traders can make quite a bit of money off of these wild trends. So, keep an eye on the news, when you see a story about a social network that “may fail”, watch the chart and look for the bottom. Then place your trades on calls and bank as the stock rises following the trend; as with these three stocks, there will definitely be uptrends!