The European Central Bank (ECB) is turning to Reddit and artificial intelligence to get a faster reading of retail investor sentiment. Two economists say online discussions can reveal shifts in market mood sooner than traditional surveys, particularly during market stress.
The researchers analyzed more than nine million Reddit posts using OpenAI’s ChatGPT-5.1 chatbot to identify changes in how individual investors view financial markets. Their findings suggest the signals align with established sentiment indicators, while offering timely information.
Economists Fabian Wagner and Julian Metzler developed the Reddit Retail Investor Sentiment Indicator (R-RISI) by examining posts from Reddit communities. These include r/wallstreetbets, r/stocks, r/StockMarket, r/investing, r/Bitcoin and r/Economics.
The index is intended to capture retail investors’ mood through online discussions, which the economists say may also reflect retail trading activity. In a blog post published by the ECB on Thursday, they said the R-RISI is “timelier on short-term market dynamics” and provides higher-frequency information than survey-based indicators.
The approach uses ChatGPT-5.1 to process informal posts and identify sentiment shifts. The researchers said the resulting measure aligns with established indicators while allowing policymakers to monitor shifts in investor mood.
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The economists also found an association between changes in the R-RISI and the following day's market returns. This relationship was particularly evident during market downturns, when shifts in investor sentiment may offer clues about short-term market movements.
The index tracks major market developments and contains signals that could help predict short-term price moves, the researchers said. However, its predictive relevance appears stronger when markets are falling.
The findings point to the potential value of social media data as an additional tool for policymakers seeking to understand retail investor behavior. Unlike traditional surveys, Reddit discussions are generated continuously, allowing sentiment to be monitored more frequently.
The research does not suggest that online posts should replace established measures. Instead, the R-RISI offers a more immediate view of investor mood that can complement existing indicators, especially when financial markets are under pressure.