Traders are using Twitter to share information about companies and markets trends.
According to aFinancial Times report, Twitter is replacing trading pits where traders once shared information.
Trades rely on real-time information about the markets to help them make the right decisions.
With the growth of automated trading where computers make decisions using algorithms, trading firms are linking their trading software to Twitter.
As reported in Computer Weekly, trading software maker Streambase plans to give traders the option of linking its complex event monitoring software to Twitter through an adaptor. The adaptor will help the package receive information from the microblogging website to help it make decisions on buying and selling shares.
Christophe Langlois, founder of Visible-Banking, which advises financial services companies on the use of social media, said there is great potential for using Twitter in trading, but there are question marks. "It all depends on where the information comes from. It is a question of the value of information and the expertise of the person providing the information," he said.
A social media site was launched in July to help start-up investment firms compete with bigger competitors.
Users can share knowledge and market information through the website, allowing them to compete with bigger firms, said Ken Yeadon, CEO at Hedgehogs.net and managing partner at Thematic Partners, which founded the site.