This article also appeared in Forbes.
Concerned that President-elect Trump’s tweets could knock down the share price of your favorite stock?
If you are an investor in (or an executive or employee at) a publicly traded company, then there is a new app to help you navigate the potentially choppy social media waters.
It’s called Trigger Finance, and it is the brainchild of three Cornell computer science engineers who want to level the playing field between institutional and do-it-yourself investors. Founded in 2015, Trigger is a financial technology mobile platform that provides free real-time data to help retail investors invest more rationally through an event-driven, rules-based approach.
“Our mission is to build the next generation mobile investing platform that uses natural language, a wealth of data and artificial intelligence to help investors invest more rationally through rules and discipline,” said Rachel Mayer, Trigger’s co-founder and chief executive officer.
The company says that tens of thousands of investors with nearly $200 million in assets have linked their brokerage accounts to the Trigger platform.
Mayer’s co-founders are Zafrir Schop, who serves as the company’s chief technology officer, and Adrian Soghoian, who serves as chief operating officer. The three co-founders met while earning their master’s degrees in computer science.
How Trigger Works
Trigger helps retail investors use specific news events, or triggers, to invest. Users can create their own custom triggers, or access triggers created by other users in the Trigger community. Users have created over 100,000 triggers based on various data, including stock performance, earnings announcements, economic events and percentage gains or losses in your portfolio. When the event occurs, Trigger automatically sends a real-time notification, and the user determines whether to invest based on the event.
Trigger’s rules-based approach reduces every event to a simple “if-this, then that” statement.
For example, “if oil trades below $30 per barrel, then buy Exxon” or “if interest rates rise 50 basis points, buy JPMorgan.” Investors can follow their favorite investor, receive alerts when that investor buys or sells a particular stock and then mirror the investor’s actions in their own brokerage account. For example, if Warren Buffett announces that he bought more Coca-Cola stock, a user can create a trigger to be informed real-time of Buffett’s purchase.
“After leaving JPMorgan’s algorithmic trading division, I experienced the many pain points and the increasing gap between how professional investors and retail investors invest,” Mayer said. “Specifically, the lack of innovation from brokers (particularly on mobile), the rise of [robo-advisors] and the jargon barriers everyday investors face have left many do-it-yourself investors underserved. I wanted to help the everyday investor have access to the same data and tools that I had, and deliver it in a way that made sense and was simple.”
While Trigger is not a broker-dealer, investors link their brokerage accounts to the Trigger iPhone app and can place trades with all major U.S. brokerages.
Trigger is not the only company that monitors the intersection of social media and the stock market. Competition includes Dataminr, StockTwits and Motif Investing, among other companies. Institutional investors regularly use news and financial events such as earnings announcements or acquisitions (e.g., event-driven hedge funds) as well as share price movements (e.g., algorithmic traders) to influence trading decisions.
Trump’s ability to influence a company’s share price – up or down – with a single tweet is no secret. Companies such as Boeing, Lockheed Martin, Toyota, General Motors, Ford, Amazon and Macy’s each have appeared in the president-elect’s tweets.
To help retail investors respond more rapidly to these share price movements, Trigger developed “Trump Triggers” to notify its users when Trump tweets about a particular stock.
“[We have had] overwhelming demand from our users since Trump won the election,” said Mayer. “They’ve seen his platform of choice is Twitter, and it’s causing large market moved in Fortune 500 companies. They want to stay informed and balance the risk to their portfolios”
To date, the company created two Trump Triggers that users can access to make investment decisions:
- If Trump tweets about any publicly traded stock
- If Trump tweets about any stock in a user’s portfolio
The Trump Trigger has become the company’s most popular trigger, surpassing the Federal Reserve interest rate movement trigger.
“We’ve built our custom rules engine that can trigger [based] on a variety of data in real time (including tweets, insider filings, weather and more) that sends alerts and triggers investments for the end retail investor,” Mayer said. “We’ve started to lay the groundwork to use data science and machine learning to generate insights based on our triggers and give that back to our community.”
Last year, Trigger raised about $1 million in seed capital from Wall Street executives, hedge fund investors, Ivy League machine learning professors and founders of several biotechnology and FinTech companies. The company expects to raise additional capital this year.