Headlines vs Body Text as Signals

A news signal built purely from headlines and one built from full article text behave differently, and a pipeline that only reads headlines is implicitly trading a different thing than one that reads the whole story. Headlines are written to be attention-grabbing and are available first, often seconds before the body text, which matters for latency-sensitive strategies. But they are also compressed and prone to overstating certainty — "Company Misses Earnings" can hide a body paragraph explaining the miss was due to a one-off charge that markets shouldn't care about.

Body text arrives later but carries qualifiers, numbers, and context that change or reverse the apparent direction of a headline. A signal that reacts only to headline sentiment will systematically overreact to stories the body text would have tempered, and a signal that waits for the full body sacrifices the speed advantage that made news trading attractive in the first place.

Worked example

A headline reads "Retailer Slashes Guidance." A pure headline-sentiment model scores this strongly negative and a strategy sells immediately. The body text, arriving 40 seconds later, clarifies the cut was driven entirely by a currency translation effect from a stronger dollar, not falling demand — informed traders who read past the headline don't sell, and the price partially recovers. A pipeline combining both signals would flag the initial negative headline reaction as low-confidence until the body-text signal confirms or contradicts it.