Key facts
- Economists Fabian Wagner and Julian Metzler fed over nine million Reddit posts through ChatGPT-5.1 to build the index.
- The index draws on forums including r/wallstreetbets, r/stocks, r/StockMarket, r/investing, r/Bitcoin and r/Economics.
- The authors said the R-RISI is timelier and higher frequency than survey-based sentiment indicators.
- The authors said changes in the index are associated with next-day market returns, particularly during market downturns.
Two European Central Bank economists concluded that chatter on the online discussion site Reddit can show policymakers how retail investors are feeling sooner than traditional surveys, particularly when markets are under stress. Fabian Wagner and Julian Metzler published their findings in a blog post on the ECB's website on November 12.
The researchers fed more than nine million Reddit posts through the artificial intelligence chatbot ChatGPT-5.1. They said the resulting measure, the Reddit Retail Investor Sentiment Indicator (R-RISI), aligns with more established sentiment indicators but produces signals that are timelier and more frequent.
The index draws on posts from forums including r/wallstreetbets, r/stocks, r/StockMarket, r/investing, r/Bitcoin and r/Economics. The economists said online discussion may reflect actual retail trading.
"The R-RISI is timelier on short-term market dynamics and offers higher frequency information than survey-based indicators," Wagner and Metzler wrote. They added that changes in the index are associated with next-day market returns, particularly during market downturns.
The authors said the index closely reflects major market developments and contains signals that can help predict short-term price moves, though these appear to matter more when markets are in decline.