Can Twitter Inform Stock Trades?

A hedge fund called Derwent Capital Markets says it will launch a new fund in February that will trade based in part on analysis of Twitter sentiment. This approach is built on research from the University of Manchester and Indiana University that showed how the number of emotional words on Twitter could be used to predict moves in the Dow Jones index.

http://arxiv.org/PS_cache/arxiv/pdf/1010/1010.3003v1.pdf

Researchers said they found that a change in emotions as expressed on Twitter would be followed by a move in the index between two and six days later, and that this method had greater than 87-percent accuracy.

Someone Is Trading Stocks Based on Your Tweets