Colloquium Talk: Instant-Messaging Networks and the Collective Genius of Profitable Day Traders


Location: McKenna Hall, Room 100-104

Brian Uzzi
Richard L. Thomas Distinguished chair in Leadership
Kellogg School of Management, Northwestern University

Synchronicity has been called one of the most pervasive and mysterious drives in all of nature. We demonstrate for the first time synchronous behavior among stock traders and its association with their end-of-the-day profitability. We analyzed unique, fine-grained stock trader data on over 2 million instant messages and 1 million moment-to-moment trades for two years. We found that independent traders experience periods of simultaneous trading despite the fact that they trade different stocks – a collective behavior we call trade-sync. Trade-sync and profits appear to be non-obviously and non-monotonically associated. Trade-sync increases profits up to a threshold and then its effects reverse. Sync is brought into being by the separate instant-messaging activity of the traders – a coupling mechanism we call network-tuning. We discuss the implication of trade-sync and network-tuning for other consequential human systems that face uncertainty and that defy the abilities of leaders to induce collective benefits.