Exploiting Twitter for financial gain

How I was able to make £3,700 by reacting to breaking news on social media

I’ve spent the last few years helping build an algorithm which attempts to identify breaking news, before it breaks. Our approach, which was developed at Glasgow University, analyses thousands of tweets per second to determine when something is breaking — whether it’s an earthquake, a politician resigning or anything else.

I’m not a stock trader, however, I’ve always felt that there must be a way of making money (as an “average Joe”) by knowing about the news first.

This blog details the unconventional ways I was able to profit by reacting to breaking news on Twitter.

Using Twitter to make money, attempt 1

Betting on football transfers

In the beginning I noticed that social media was the first place for football transfer news to break. For example, let’s say Messi moved from Barcelona to Manchester City; this type of news would almost certainly be leaked on Twitter before the official announcement.

There are a few reasons for this:

• (Ex)-Football agents are on social media and often leak reliable information
• Club staff occasionally leak sensitive information (and sometimes get sacked for it)
• Members of the public often spot a footballer in an usual location (e.g. the car park of another club on deadline day 🤔) or meeting other managers in public places
• Sometimes the players themselves, or members of the management board, even post sensitive information.

Zlatan Ibrahimovic famously announced his arrival at Man United before they did.

Football player transfers are broken first on social media… so what? Well, unless you are a compulsive gambler, you may not know that you can actually bet on a player joining a club (or staying at their current club).

On one occasion the Leicester City chairman posted a photo, to his personal (!) Instagram account, of him signing a new contract with a key player (Riyad Mahrez). When I seen this photo a few minutes after it was uploaded, it struck me as very strange. Riyad Mahrez had been rumoured to join Arsenal for many months so when I saw this photo, I quickly checked to see if you could bet on “Riyad Mahrez to stay at Leicester” — which you could. During the frantic 5 minutes which followed, I bet as much money as my bookmaker would allow me.

Unfortunately he deleted the instagram photo I am talking about, however, he has posted many other photos which could be deemed “market moving information”.

I was able to use this strategy numerous times:

1. Wait for our algorithm to identify a breaking football transfer from Twitter
2. Quickly search to see if I could bet on this transfer
3. Bet on the transfer before the markets closed

This was really fun time. I had found a way to actually beat the market, something I’ve tried to do for a very long time. In the past I’d built (losing) poker bots, sports betting bots and football fantasy bots — but this system actually worked, and it felt far too easy…

Unfortunately the feeling of “free money” didn’t last long. On a Tuesday morning in February 2017 I received the following email from the bookmaker I had been using:

Apparently the bookies don’t like it when you win. BetVictor was the main bookmaker for football transfer betting in the UK and unfortunately they were no longer willing to take my action.

Pro’s:

• Football transfers almost always get leaked on Twitter before they are announced officially
• There was at least a 5 minute window before the football markets were closed

Con’s:

• The bookmakers will eventually ban you
• There isn’t a huge amount of liquidity in football transfer betting
• Football transfers only happen during a few months of the year
• The pendulum can swing. One or two times I lost money when the player pulled out at last minute, or failed the medical.

Result:

• +£2,000
• One banned sports betting account

Using Twitter to make money, attempt 2

Betting on political elections

When the football transfer season closed and I had my main betting account blocked I started to look for other opportunities.

If I could win money betting on football transfers, then surely there were other ways to profit by “knowing about the news first”?

Going through the “exotic” betting markets which exist on many bookmakers (e.g. Britain’s got Talent Winner, Hottest UK temperature of the year etc), one jumped out at me: Politics.

Could I use Twitter to identify the winner of a political election before the results were announced? I probably wasn’t going to be able to predict Trump, but I did notice that I could bet on a much smaller election: constituency by constituency betting in the UK 2017 general election (akin to betting on state by state in the US).

Therefore, on the 8th of June I set my laptop up for 4 hours of intense political betting, exploiting insider knowledge posted publicly to Twitter. Specifically, I was looking for any tweets which could indicate the result of the next seat in various local councils in the UK.

To my surprise there were many tweets which indicated the forthcoming results. Members of the public are allowed in the polling stations (where votes are counted) and mobile phones are also not prohibited — a toxic mix. Insider information began to leak online, and I was actively looking for it in our streams.

As an example, you could still bet against Nick Clegg when this tweet was posted…

Every time I seen a tweet like this, I would rush over to my bookmaker and bet accordingly. I did this 21 times, winning 20 bets in 4 hours.

The results of my 4 hour political betting experiment

Pro’s:

• There were many occasions when tweets (from journalists, members of the public, politicians themselves) revealed the outcome before the votes are counted & announced.
• Sometimes, even after the result had been announced by an official TV channel, you could still bet for around 30 seconds — easy money!
• It was a lot of fun, if not completely exhausting
• My new bookmaker didn’t ban me this time

Con’s:

• Elections only happen every few years
• There isn’t a huge amount of liquidity in local election betting

Result:

• +£981

Using Twitter to make money, attempt 3

Trading cryptocurrencies

Now for my latest venture. In the past year, I’ve noticed that our algorithm has started to identify an increasing number of cryptocurrency news stories, whether it’s coins being listed on exchanges, or major partnerships.

An analysis of the cashtags in our tweet collection.

After the successes of my football transfer and political betting experiments, I’ve decided it’s time try something more serious (or less serious depending on your viewpoint): cryptocurrency trading.

Cryptocurrency and social media go hand in hand. In my opinion, the lack of regulation makes “trading the news” far more profitable for cryptocurrencies, in comparison to using the same strategy to trade stocks.

It could be as simple as a single tweet from a cryptocurrency’s social media page, or the public disagreement between two influential Ethereum developers; “news” can dramatically increase or decrease the value of a cryptocurrency.

For example, we recently identified a leaked image of the Waltonchain CEO standing beside a representative from Alibaba… before the coin increased 40% in value.

This latest attempt at using Twitter to make money is a new world to me. My plan is to look for news on the following topics:

• Coins announcing partnerships
• Coins being listed on new exchanges
• Announcements about announcements e.g. “there will be huge news released on X date”. In this case, I will almost always buy the rumour, sell the news
• Software / roadmap updates
• Hacks

I’ve been planning on trading crypto’s for a while now, but it was only till a couple of weeks ago that I put this motion into action. My first trade was made based on the back of the following tweet:

From left to right: # of retweets / likes, time posted, the computed sentiment, the cryptocurrency, the update.

Even to a complete trading noob like myself, this was obviously a very bullish update. Any partnership with a multi billion $ company, even if it turns out to be nonsense, represents an ideal trading scenario. Further, this announcement was posted by the official Enigma Project twitter account — it would almost certainly move the market.

At this point my thinking was to quickly buy and sell a few minutes later, as in my experience, these pumps don’t last long. As can be seen below, I bought and held for just 5 minutes before closing a ~10% profit.

My first crypto trade 🎉

Pro’s:

• There are occasions everyday when tweets move cryptocurrency markets
• No fear of getting banned
• The liquidity is huge in comparison to sports / political betting

Con’s:

• These markets are obviously much more competitive than sports / political betting

Result (so far):

• +£700

How else can I earn money by reacting to pre-breaking news on Twitter?

The final results

I’m not stopping there however, I feel there are other opportunities to be had:

• Betting on football managers getting sacked or signed
• Betting state-by-state on the next US election
• Betting on winners of TV shows etc — I could analyse the number of mentions of a particular hashtag…?
• Betting on the next James Bond…? 🤔
• Any ideas are appreciated 😉

Written by the founder of Scoop Markets.

Scoop is the breaking news & analytics dashboard for stock & crypto traders.

• Our algorithm analyzes thousands of tweets every second to identify breaking news, before it breaks.
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