It was very difficult to keep track of the Stock market and market performance until index funds arrived into the scene few decades back. This helped users keep track of the general performance of Mr. Market and compare themselves how they are doing against it.
In the same spirit Zerodha - India's First Discount Brokerage Firm recently came out with crowd.in a real time crowd sourced, market sentiment index. The project was conceptualized by Nikhil Kamath, director of trading and finance, and Dr. Kailash Nadh (PhD in Artificial Intelligence & Computational Linguistics), the head of R&D, at Zerodha.
Once a user signs up on the platform, he can participate in the game by predicting C&X NIFTY spot closing prices for the day. The predictions at 02:45 pm, 15 minutes before the market closes. Participants are awarded points if their predictions fall into the +/- 5 points away from the actual market close. In order to make sure that no one uses bots to make multiple predictions, stringent checks are being done in the backend.
To make sure people participate actively, their points are converted to cash rewards of up to Rs. 100,000 at the end of every week. The weekly leaderboard tracks the performance of users and highlights potential winners and displays their ranking on the leaderboard. Participants can predict as many times as they want during the trading hours. But this also means that they lose points throughout the day. The earlier they predict the more points they can win as the points diminish as time passes till the market closes.
The live market sentiment is then plotted on a gauge that swings between bearish and bullish zones. The company plans to release the entire dataset in the public domain for researchers and analysts. This data could be used in various ways to form patterns and gain insights into crowd sentiment which is generally not an easy task to find out.
“One of our main motivations behind Crowd is to spark interest in people who generally shy away from the stock markets. We've taken great effort to make this easy, fun, and accessible to everyone. The Crowd Index could work either as a contrarian or a leading indicator based on real time fluctuations in market sentiment” said Nithin Kamath (CEO and founder, Zerodha).
Zerodha has come a long way since we covered them two years back. At present they are one of the India's most advanced trading platform with their in house tools for algorithmic and strategy based automated testing and has been the favorite among new age generation by engaging with people with their various initiatives like 60-day challenges and Z-connect.
Check out Crowd Index here.