Several large financial trading platforms have recently begun implementing “copy trading,” a process by which a leader allows copiers to automatically mirror their trades in exchange for a share of the profits realized. While it has been shown in many contexts that platform design considerably influences user choices—users tend to disproportionately trust rankings presented to them—we would expect that here, copiers exercise due diligence given the money at stake, typically USD 500–2 000 or more. We perform a quantitative analysis of two major cryptocurrency copy-trading platforms, with different default leader ranking algorithms. One of these platforms additionally changed the information displayed during our study. In all cases, we show that the platform UI significantly influences copiers’ decisions. Besides being sub-optimal, this influence is problematic as rankings are often easily gameable by unscrupulous leaders who prey on novice copiers, and they create perverse incentives for all platform users.

The web and social media platforms have drastically changed how investors produce and consume financial advice. Historically, individual investors were often relying on newsletters and related prospectus backed by the reputation and track record of their issuers. Nowadays, financial advice is frequently offered online, by anonymous or pseudonymous parties with little at stake. As such, a natural question is to investigate whether these modern financial “influencers” operate in good faith, or whether they might be misleading their followers intentionally. To start answering this question, we obtained data from a very large cryptocurrency derivatives exchange, from which we derived individual trading positions. Some of the investors on that platform elect to link to their Twitter profiles. We were thus able to compare the positions publicly espoused on Twitter with those actually taken in the market. We discovered that 1) staunchly “bullish” investors on Twitter often took much more moderate, if not outright opposite, positions in their own trades when the market was down, 2) their followers tended to align their positions with bullish Twitter outlooks, and 3) moderate voices on Twitter (and their own followers) were on the other hand far more consistent with their actual investment strategies. In other words, while social media advice may attempt to foster a sense of camaraderie among people of like-minded beliefs, the reality is that this is merely an illusion, which may result in financial losses for people blindly following advice.

Zhiyu Chen, Wenhu Chen, Charese Smiley, Sameena Shah, Iana Borova, Dylan Langdon, Reema Moussa, Matt Beane, Ting-Hao Huang, Bryan Routledge, William Yang Wang. Proceedings of the 2021 Conference on Empirical Methods in Natural Language Processing. 2021.

Since 2018, the cryptocurrency trading landscape has evolved from a collection of spot markets (fiat for cryptocurrency) to a hybrid ecosystem featuring complex and popular derivatives products. In this paper we explore this new paradigm through a study of BitMEX, one of the first and most successful derivatives platforms for leveraged cryptocurrency trading. BitMEX trades on average over 3 billion dollars worth of volume per day, and allows users to go long or short Bitcoin with up to 100x leverage. We analyze the evolution of BitMEX products—both settled and perpetual offerings that have become the standard across other cryptocurrency derivatives platforms. We additionally utilize on-chain forensics, public liquidation events, and a site-wide chat room to describe the diverse ensemble of amateur and professional traders that forms this community. These traders range from wealthy agents running automated strategies, to individuals trading small, risky positions and focusing on very short time-frames. Finally, we discuss how derivative trading has impacted cryptocurrency asset prices, notably how it has led to dramatic price movements in the underlying spot markets.

We present a neural network architecture to predict a point in space from the sequence of characters in the color's name. Using large scale color--name pairs obtained from an online design forum, we evaluate our model on a color Turing test and find that, given a name, the colors predicted by our model are preferred by annotators to names created by humans. Our datasets and demo system are available online at this http URL.

We present a probabilistic model of the influence of language on the behavior of the U.S. Supreme Court, specifically influence of amicus briefs on Court decisions and opinions.The approach assumes that amici are rational, utility-maximizing agents who try to win votes or affect the language of court opinions.Our model leads to improved predictions of justices' votes and perplexity of opinion language.It is amenable to inspection, allowing us to explore inferences about the persuasiveness of different amici and influenceability of different justices; these are consistent with earlier findings."Language is the central tool of our trade."

We explore the idea that authoring a piece of text is an act of maximizing one's expected utility.To make this idea concrete, we consider the societally important decisions of the Supreme Court of the United States.Extensive past work in quantitative political science provides a framework for empirically modeling the decisions of justices and how they relate to text.We incorporate into such a model texts authored by amici curiae (``friends of the court'' separate from the litigants) who seek to weigh in on the decision, then explicitly model their goals in a random utility model.We demonstrate the benefits of this approach in improved vote prediction and the ability to perform counterfactual analysis.

Authoring a scientific paper is a complex process involving many decisions.We introduce a probabilistic model of some of the important aspects of that process: that authors have individual preferences, that writing a paper requires trading off among the preferences of authors as well as extrinsic rewards in the form of community response to their papers, that preferences (of individuals and the community) and tradeoffs vary over time.Variants of our model lead to improved predictive accuracy of citations given texts and texts given authors.Further, our model's posterior suggests an interesting relationship between seniority and author choices.

We present a probabilistic language model that captures temporal dynamics and conditions on arbitrary non-linguistic context features. These context features serve as important indicators of language changes that are otherwise difficult to capture using text data by itself. We learn our model in an efficient online fashion that is scalable for large, streaming data. With five streaming datasets from two different genres—economics news articles and social media—we evaluate our model on the task of sequential language modeling. Our model consistently outperforms competing models.

How do company insiders trade? Do their trading behaviors differ based on their roles (e.g., CEO vs. CFO)? Do those behaviors change over time (e.g., impacted by the 2008 market crash)? Can we identify insiders who have similar trading behaviors? And what does that tell us?