Biz networks keep traders plugged in

Jana Schilder of The Toronto Star writes Wednesday about how traders are relying more and more on TV networks to give them fast information about their investments.

Schilder writes, “Active traders, swing traders, and especially day traders like to have the television on in the background while they’re working so they can get material news as it breaks. Material news is anything that may affect the price or investor sentiment: an interest rate hike, lagging sales, a potential merger or takeover, or chatter about a new world currency.

“Active traders are those who make more than 30 trades per quarter; swing traders remain in the market for days or weeks and ride the market on its way up or down; while day traders technically move to cash before market close.

“However, many networks and shows recommend specific equities and other instruments as a ‘buy.’ Keep in mind that these recommendations are made by analysts or fund managers who, more often than not, may have a vested interest in seeing the price of that specific stock go up. Further, the recommendation is almost always a ‘buy’ and rarely a ‘sell’ -– the more people own a stock, the more the price goes up.”

Read more here.