A new platform that aims to inform traders about potentially market-moving events hours before they
hit mainstream news outlets by tracking social media conversations has launched in the UK.
The website Trading.co.uk analyses 22bn bits of data every day from various social media channels,
including Twitter and blog comments, and alerts users if it spots a spike in activity or sentiment.
“Our dashboard will show the event 20 minutes to two hours before there is a price movement,” said
chief executive Gareth Mann. “It’s not a predictive analytics engine, it’s an indicator that something’s
going on that you need to look at.”
The platform said it flagged the Smiler roller coaster crash at Alton Towers within minutes, and nearly
an hour before media reports were published and Merlin Entertainment’s share price dropped by 10pc.
on social media
Trading.co.uk, which has been operating in beta, also said its algorithm noticed online chatter around
Volkswagen and the words “recall”, “cheating”, “scandal”, “EPA”, “tests”, “pollution” and “emissions”
around two hours before markets closed that Friday. News outlets picked up the story after trading
hours, and shares in the automaker dropped 16pc when markets opened on Monday.
What happens in seconds and minutes can drastically change the decisions traders make
– Gareth Mann, Trading.co.uk
The website also claims to have informed users about AB InBev’s takeover of SAB Miller, Tesco’s
decision to stop selling sugary drinks and Barclay’s announcement of a new chief executive before the
majority of news outlets had picked up the stories.
“What happens in seconds and minutes can drastically change the decisions traders make,” Mr Mann
said. “Social media is a vital source of information if companies and traders want to stay ahead of the
curve. We’ll pick up the key phrases from a conversation before it hits Bloomberg.”
The platform, which has an ad-supported free service and a bespoke enterprise offering, does not predict
which stocks might rise and fall but aims to alert users about heightened activity around a certain
company so they can make a decision about what to do with their shares.
Mr Mann said that the service is aimed at the day trader, who is buying and selling shares, and the
market observer, who wants to keep an eye on their investments.
“Gone are the days when you had your bonds handed down to you by your parents. We’re showing
people different ways that things move the market and opening trading up to a wider audience.”
The algorithm, which learns as it goes along, uses only 10pc of the data available to it, as it ignores
information that would not be relevant to the markets.
“A person tweeting ‘I don’t like my phone’ is very different to a conversation about company results or a
chief executive’s behaviour,” Mr Mann said.
“The proof is in the pudding we pump out. I’m not claiming our data is 100pc but it’s damn good.”
The company has raised $3.8m from investors including John Maltby, the former chief executive of RBS
division Williams & Glyn, and Adrian Ware, managing director of financial advisers Cavendish Ware,
and Dave Wallace, boss of WPP-owned agency HealthWallace.