Part-of-speech (POS) tagging
On Tuesday, October 10, 2017, between 9:34 AM and 9:36 AM, the US Dow Jones newswire encountered a technical error that resulted in it posting some strange headlines. One of them was, "Google to buy Apple." These four words managed to send Apple stock up over two percent.
The algorithmic trading systems obviously failed here to understand that such an acquisition would be impossible as Apple had a market capitalization of $800 billion at the time, coupled with the fact that the move would likely not find regulatory approval.
So, the question arises, why did the trading algorithms choose to buy stock based on these four words? The answer is through part-of-speech (POS) tagging. POS tagging allows an understanding of which words take which function in a sentence and how the words relate to each other.
spaCy comes with a handy, pretrained POS tagger. In this section we're going to apply this to the Google/Apple news story. To start the POS tagger, we need to run the...