Spinout offers stock traders the chance to Scoop the competition
A University of Glasgow spinout company is harnessing the fast-moving world of social media to help traders make faster, smarter decisions about the stock market.
Scoop Analytics, founded by two former postgraduate students from the University’s School of Computing Science and their Professor, is today unveiling an online tool which uses an artificially intelligent algorithm to scour Twitter for breaking news. Their offering gives traders an edge allowing them to make informed trading decisions more swiftly than their rivals.
The Scoop Markets dashboard, which promises ‘market moving news, before it breaks’, provides retail stock traders with instant alerts when relevant information about markets hits social media, but before journalists and other news sources have had the chance to turn the information into news.
Unlike rival services, which often use retweets as a crude indicator of the worthiness of breaking news, Scoop’s system analyses the text within a tweet, making it faster and more effective at highlighting relevant information.
Scoop’s founders, Dr Phil McParlane and James McMinn, highlight two recent examples of Scoop Markets identifying breaking news.
In July, the service identified rumours of a merger between JP Morgan and WorldPay 60 seconds before the news broke, increasing WorldPay’s share price by around 14%. The next day, Scoop picked up details that the merger had fallen through. Four minutes after Scoop’s alert, WorldPay’s stock dropped 18%. According to Scoop’s founders, a trader who acted on both tips and bought £1000 in shares ahead of the WorldPay stock rise and then sold them again before the drop would have made £248 before trading fees were deducted – a return on investment of 24.8%.
In August, Scoop’s algorithm identified the unexpected removal of the Automobile Association’s CEO and alerted users 11 minutes ahead of the Financial Times and 90 minutes ahead of the BBC. A trader acting on this information ahead of it being reported could have made £119 on a £1,000 investment, or an ROI of 11.9%.
Dr McParlane said: “In a sense what we’re offering traders is a glimpse into the future – a chance to see news as it’s broken on alternative data sources, such as social media, and before it reaches mainstream media outlets. It may only be a few minutes before the information makes it to the news, but a smart trader can use that time advantage to make more informed trading decisions ahead of the curve.”
James McMinn added: “The underpinnings of our algorithm are a closely-guarded secret, but what we can say is that Scoop Markets looks at thousands of tweets every second to pull out data which is relevant to a trader’s area of interest. We’ve put a lot of time and effort into fine-tuning the system since Scoop was incorporated in 2015, and we’re confident that Scoop Markets will provide retail traders with a real advantage.”
Scoop’s pricing model has two tiers. The first entry-level package, Scoop Pro, costs £39 per month and has a 30-second delay. The second plan, Scoop Ultimate, removes the time delay to offer instant alerts and costs £199 per month. Free seven-day trials of Scoop Pro are available to anyone with a Twitter account.
Scoop Analytics, who recently appointed Simon Hardy as Chairman (previously Kelvin Connect CEO), was formed in 2015 with support from the University of Glasgow.
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First published: 25 September 2017