Dynamic Hedging Strategies in Derivatives Markets with LLM-Driven Sentiment and News Analytics

Dynamic hedging strategies are essential for effective risk management in derivatives markets, where volatility and market sentiment can greatly impact performance. This paper introduces a novel framework that leverages large language models (LLMs) for sentiment analysis and news analytics to inform hedging decisions. By analyzing textual data from diverse sources like news articles, social media, and financial reports, our approach captures critical sentiment indicators that reflect current market conditions. The framework allows for real-time adjustments to hedging strategies, adapting positions based on continuous sentiment signals. Backtesting results on historical derivatives data reveal that our dynamic hedging strategies achieve superior risk-adjusted returns compared to conventional static approaches. The incorporation of LLM-driven sentiment analysis into hedging practices presents a significant advancement in decision-making processes within derivatives trading. This research showcases how sentiment-informed dynamic hedging can enhance portfolio management and effectively mitigate associated risks.

CPR: Leveraging LLMs for Topic and Phrase Suggestion to Facilitate Comprehensive Product Reviews

Consumers often heavily rely on online product reviews, analyzing both quantitative ratings and textual descriptions to assess product quality. However, existing research hasn't adequately addressed how to systematically encourage the creation of comprehensive reviews that capture both customers sentiment and detailed product feature analysis. This paper presents CPR, a novel methodology that leverages the power of Large Language Models (LLMs) and Topic Modeling to guide users in crafting insightful and well-rounded reviews. Our approach employs a three-stage process: first, we present users with product-specific terms for rating; second, we generate targeted phrase suggestions based on these ratings; and third, we integrate user-written text through topic modeling, ensuring all key aspects are addressed. We evaluate CPR using text-to-text LLMs, comparing its performance against real-world customer reviews from Walmart. Our results demonstrate that CPR effectively identifies relevant product terms, even for new products lacking prior reviews, and provides sentiment-aligned phrase suggestions, saving users time and enhancing reviews quality. Quantitative analysis reveals a 12.3% improvement in BLEU score over baseline methods, further supported by manual evaluation of generated phrases. We conclude by discussing potential extensions and future research directions.

Language Modeling for the Future of Finance: A Quantitative Survey into Metrics, Tasks, and Data Opportunities

Recent advances in language modeling have led to growing interest in applying Natural Language Processing (NLP) techniques to financial problems, enabling new approaches to analysis and decision-making. To systematically examine this trend, we review 374 NLP research papers published between 2017 and 2024 across 38 conferences and workshops, with a focused analysis of 221 papers that directly address finance-related tasks. We evaluate these papers across 11 qualitative and quantitative dimensions, identifying key trends such as the increasing use of general-purpose language models, steady progress in sentiment analysis and information extraction, and emerging efforts around explainability and privacy-preserving methods. We also discuss the use of evaluation metrics, highlighting the importance of domain-specific ones to complement standard machine learning metrics. Our findings emphasize the need for more accessible, adaptive datasets and highlight the significance of incorporating financial crisis periods to strengthen model robustness under real-world conditions. This survey provides a structured overview of NLP research applied to finance and offers practical insights for researchers and practitioners working at this intersection.

From Annotation to Adaptation: Metrics, Synthetic Data, and Aspect Extraction for Aspect-Based Sentiment Analysis with Large Language Models

This study examines the performance of Large Language Models (LLMs) in Aspect-Based Sentiment Analysis (ABSA), with a focus on implicit aspect extraction in a novel domain. Using a synthetic sports feedback dataset, we evaluate open-weight LLMs' ability to extract aspect-polarity pairs and propose a metric to facilitate the evaluation of aspect extraction with generative models. Our findings highlight both the potential and limitations of LLMs in the ABSA task.

AI Approaches to Qualitative and Quantitative News Analytics on NATO Unity

The paper considers the use of GPT models with retrieval-augmented generation (RAG) for qualitative and quantitative analytics on NATO sentiments, NATO unity and NATO Article 5 trust opinion scores in different web sources: news sites found via Google Search API, Youtube videos with comments, and Reddit discussions. A RAG approach using GPT-4.1 model was applied to analyse news where NATO related topics were discussed. Two levels of RAG analytics were used: on the first level, the GPT model generates qualitative news summaries and quantitative opinion scores using zero-shot prompts; on the second level, the GPT model generates the summary of news summaries. Quantitative news opinion scores generated by the GPT model were analysed using Bayesian regression to get trend lines. The distributions found for the regression parameters make it possible to analyse an uncertainty in specified news opinion score trends. Obtained results show a downward trend for analysed scores of opinion related to NATO unity. This approach does not aim to conduct real political analysis; rather, it consider AI based approaches which can be used for further analytics as a part of a complex analytical approach. The obtained results demonstrate that the use of GPT models for news analysis can give informative qualitative and quantitative analytics, providing important insights. The dynamic model based on neural ordinary differential equations was considered for modelling public opinions. This approach makes it possible to analyse different scenarios for evolving public opinions.

Linguistic Interpretability of Transformer-based Language Models: a systematic review

Language models based on the Transformer architecture achieve excellent results in many language-related tasks, such as text classification or sentiment analysis. However, despite the architecture of these models being well-defined, little is known about how their internal computations help them achieve their results. This renders these models, as of today, a type of 'black box' systems. There is, however, a line of research -- 'interpretability' -- aiming to learn how information is encoded inside these models. More specifically, there is work dedicated to studying whether Transformer-based models possess knowledge of linguistic phenomena similar to human speakers -- an area we call 'linguistic interpretability' of these models. In this survey we present a comprehensive analysis of 160 research works, spread across multiple languages and models -- including multilingual ones -- that attempt to discover linguistic information from the perspective of several traditional Linguistics disciplines: Syntax, Morphology, Lexico-Semantics and Discourse. Our survey fills a gap in the existing interpretability literature, which either not focus on linguistic knowledge in these models or present some limitations -- e.g. only studying English-based models. Our survey also focuses on Pre-trained Language Models not further specialized for a downstream task, with an emphasis on works that use interpretability techniques that explore models' internal representations.

BAR-Analytics: A Web-based Platform for Analyzing Information Spreading Barriers in News: Comparative Analysis Across Multiple Barriers and Events

This paper presents BAR-Analytics, a web-based, open-source platform designed to analyze news dissemination across geographical, economic, political, and cultural boundaries. Using the Russian-Ukrainian and Israeli-Palestinian conflicts as case studies, the platform integrates four analytical methods: propagation analysis, trend analysis, sentiment analysis, and temporal topic modeling. Over 350,000 articles were collected and analyzed, with a focus on economic disparities and geographical influences using metadata enrichment. We evaluate the case studies using coherence, sentiment polarity, topic frequency, and trend shifts as key metrics. Our results show distinct patterns in news coverage: the Israeli-Palestinian conflict tends to have more negative sentiment with a focus on human rights, while the Russia-Ukraine conflict is more positive, emphasizing election interference. These findings highlight the influence of political, economic, and regional factors in shaping media narratives across different conflicts.

Historical Ink: Exploring Large Language Models for Irony Detection in 19th-Century Spanish

This study explores the use of large language models (LLMs) to enhance datasets and improve irony detection in 19th-century Latin American newspapers. Two strategies were employed to evaluate the efficacy of BERT and GPT-4o models in capturing the subtle nuances nature of irony, through both multi-class and binary classification tasks. First, we implemented dataset enhancements focused on enriching emotional and contextual cues; however, these showed limited impact on historical language analysis. The second strategy, a semi-automated annotation process, effectively addressed class imbalance and augmented the dataset with high-quality annotations. Despite the challenges posed by the complexity of irony, this work contributes to the advancement of sentiment analysis through two key contributions: introducing a new historical Spanish dataset tagged for sentiment analysis and irony detection, and proposing a semi-automated annotation methodology where human expertise is crucial for refining LLMs results, enriched by incorporating historical and cultural contexts as core features.

Agent-Based Simulations of Online Political Discussions: A Case Study on Elections in Germany

User engagement on social media platforms is influenced by historical context, time constraints, and reward-driven interactions. This study presents an agent-based simulation approach that models user interactions, considering past conversation history, motivation, and resource constraints. Utilizing German Twitter data on political discourse, we fine-tune AI models to generate posts and replies, incorporating sentiment analysis, irony detection, and offensiveness classification. The simulation employs a myopic best-response model to govern agent behavior, accounting for decision-making based on expected rewards. Our results highlight the impact of historical context on AI-generated responses and demonstrate how engagement evolves under varying constraints.

SCRAG: Social Computing-Based Retrieval Augmented Generation for Community Response Forecasting in Social Media Environments

This paper introduces SCRAG, a prediction framework inspired by social computing, designed to forecast community responses to real or hypothetical social media posts. SCRAG can be used by public relations specialists (e.g., to craft messaging in ways that avoid unintended misinterpretations) or public figures and influencers (e.g., to anticipate social responses), among other applications related to public sentiment prediction, crisis management, and social what-if analysis. While large language models (LLMs) have achieved remarkable success in generating coherent and contextually rich text, their reliance on static training data and susceptibility to hallucinations limit their effectiveness at response forecasting in dynamic social media environments. SCRAG overcomes these challenges by integrating LLMs with a Retrieval-Augmented Generation (RAG) technique rooted in social computing. Specifically, our framework retrieves (i) historical responses from the target community to capture their ideological, semantic, and emotional makeup, and (ii) external knowledge from sources such as news articles to inject time-sensitive context. This information is then jointly used to forecast the responses of the target community to new posts or narratives. Extensive experiments across six scenarios on the X platform (formerly Twitter), tested with various embedding models and LLMs, demonstrate over 10% improvements on average in key evaluation metrics. A concrete example further shows its effectiveness in capturing diverse ideologies and nuances. Our work provides a social computing tool for applications where accurate and concrete insights into community responses are crucial.