U.S. patent application number 13/616937 was filed with the patent office on 2013-05-16 for systems and methods for creating and trading dynamic securities.
The applicant listed for this patent is Mary Ann Gilbert. Invention is credited to Andrew C. Gilbert.
Application Number | 20130124379 13/616937 |
Document ID | / |
Family ID | 21921549 |
Filed Date | 2013-05-16 |
United States Patent
Application |
20130124379 |
Kind Code |
A1 |
Gilbert; Andrew C. |
May 16, 2013 |
SYSTEMS AND METHODS FOR CREATING AND TRADING DYNAMIC SECURITIES
Abstract
Systems and methods for creating and trading dynamic securities
are provided. Dynamic securities according to the invention may
preferably include any security or non-securitized investment. To
form the dynamic security, a user may select a plurality of
securities including stocks, bonds, baseball cards and modern art
paintings to create a dynamic security. The selection may be
limited to a pre-determined list of securities.
Inventors: |
Gilbert; Andrew C.;
(Califon, NJ) |
|
Applicant: |
Name |
City |
State |
Country |
Type |
Gilbert; Mary Ann |
Califon |
NJ |
US |
|
|
Family ID: |
21921549 |
Appl. No.: |
13/616937 |
Filed: |
September 14, 2012 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
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10042371 |
Dec 27, 2001 |
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13616937 |
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Current U.S.
Class: |
705/37 |
Current CPC
Class: |
G06Q 40/04 20130101;
G06Q 40/06 20130101 |
Class at
Publication: |
705/37 |
International
Class: |
G06Q 40/04 20060101
G06Q040/04 |
Claims
1. A method for creating a dynamic security comprising: selecting a
plurality of securities from a list of securities to form a
selected plurality of securities; and forming a dynamic security
from the selected plurality of securities.
2. The method of claim 1, the selecting a plurality of securities
comprising selecting from a list including fixed income
securities.
3. The method of claim 1, the selecting a plurality of securities
comprising selecting from a list including stocks.
4. The method of claim 1, the selecting a plurality of securities
comprising selecting from a list including a futures contract.
5. The method of claim 1, the selecting a plurality of securities
comprising selecting from a list including an options contract.
6. The method of claim 1, the selecting a plurality of securities
comprising selecting from a list a real property lease.
7. The method of claim 1, the selecting a plurality of securities
comprising selecting from a list including a collectible.
8. The method of claim 1, the selecting a plurality of securities
comprising selecting from a list including a security.
9. The method of claim 1, the selecting a plurality of securities
comprising selecting from a list including a non-securitized
instrument.
10. The method of claim 1, further comprising trading the dynamic
security.
11. The method of claim 1, further comprising trading at least one
of the selected plurality of securities separate from the dynamic
security.
12. The system of claim 1, further comprising monitoring a rate of
return of the dynamic security.
13. The system of claim 12, further comprising comparing the rate
of return to a pre-determined target rate of return.
14. The system of claim 13, further comprising providing a
notification when the rate of return deviates at a pre-determined
ratio from the target rate of return.
15. The system of claim 1, further comprising monitoring a rate of
return of each of the selected plurality of securities.
16. The system of claim 15, further comprising comparing the rate
of return of each of the selected securities to a pre-determined
target rate of return.
17. The system of claim 16, further comprising providing a
notification when the value of a selected one of each of the
selected plurality of securities deviates at a pre-determined ratio
from the target rate of return.
18. The method of claim 15, further comprising implementing the
method in an electronic trading platform.
19. A system for creating a dynamic security comprising: means for
selecting a plurality of securities from a list of securities; and
means for forming a dynamic security from the selected plurality of
securities.
20. The system of claim 19, wherein the means for selecting a
plurality of securities comprises a means for selecting from a list
including a fixed income securities, stocks, bonds, futures or
options.
21. The system of claim 19, further comprising means for trading
the dynamic security.
22. The system of claim 19, further comprising means for trading at
least one of the selected plurality of securities separate from the
dynamic security.
23. The system of claim 19, further comprising means for monitoring
a rate of return of the dynamic security.
24. The system of claim 23, further comprising means for comparing
the rate of return to a pre-determined target rate of return.
25. The system of claim 24, further comprising means for providing
a notification when the rate of return deviates at a pre-determined
ratio from the target rate of return.
26. The system of claim 19, further comprising means for monitoring
a rate of return of each of the selected plurality of
securities.
27. The system of claim 26, further comprising means for comparing
the rate of return to a pre-determined target rate of return.
28. The system of claim 27, further comprising means for providing
a notification when the value of a selected one of each of the
selected plurality of securities deviates at a pre-determined ratio
from the target rate of return.
29. The system of claim 19, further comprising means for
implementing the system in an electronic trading platform.
Description
BACKGROUND OF THE INVENTION
[0001] In recent years, electronic trading systems have gained a
widespread acceptance for trading securities. For example,
electronic trading systems have been created which facilitate the
trading of financial instruments such as stocks, bonds, currency,
futures, or other suitable financial instruments. Other tradeable
instruments also include more non-traditional commodities such as
baseball cards, art pieces, and other collectibles.
[0002] Many investors rely upon mutual funds to create a
diversified investment base to lower investing risk. Typically,
however, investors in mutual funds have no control over the
creation of the fund, or the selection of individual securities
which make up the mutual fund basket of securities. Investors in
mutual funds also are unable to sell the individual components of
the fund.
[0003] Accordingly, it would be desirable to provide systems and
methods for electronic trading whereby investors may create their
own basket of securities, including both traditional securities
investments as well as non-traditional securities of any sort,
whether it includes commodities, securities, non-securitized items,
leases, collectibles, or any other possible tradeable tangible or
intangible item.
[0004] It would also be desirable that this basket of securities
could be traded as a whole, or in the alternative, that its
individual components can be isolated and traded separate from the
basket as a whole. It would further be desirable to provide systems
and methods for comparing the rate of return of the dynamic
security or of its individual components to a pre-determined target
rate of return, and for notifying the user if the actual rate of
return deviates substantially from the target rate of return.
SUMMARY OF THE INVENTION
[0005] Therefore, it is an object of the invention to provide
systems and methods for electronic trading whereby investors may
create their own basket of securities, including both traditional
securities investments as well as non-traditional securities of any
sort, whether it includes securities--i.e., instruments that show
an evidence of debt or of ownership such as a stock certificate or
bond--non-securitized items--i.e., instruments or objects that do
not show an evidence or debt or of ownership--leases, commodities,
collectibles, real property lease or any other possible tradeable
tangible or intangible item.
[0006] It is also an object of this invention that this basket of
securities could be traded as a whole, or in the alternative, that
its individual components can be isolated and traded separate from
the basket as a whole. It would further be desirable to provide
systems and methods for comparing the rate of return of the dynamic
security or of its individual components to a pre-determined target
rate of return, and for notifying the user if the actual rate of
return deviates substantially from the target rate of return.
[0007] The present invention relates to systems and methods for
creating and trading dynamic securities. A dynamic security is a
basket of securities composed of two or more identifiable
securities, in which the dynamic security may be traded as a whole
or in which the identifiable securities included in the dynamic
security may be divided from the plurality of securities and sold
or traded individually.
[0008] More particularly, the present invention relates to the
creation of a personalized basket of securities that may be traded
electronically as a whole. In the alternative, the owner of the
basket of securities may isolate individual components of the
basket of securities and trade them separate from the basket as a
whole. The present invention may also monitor the rate of return of
the dynamic security as well as the individual components of the
basket of securities, and compare them to a pre-determined target
rate of return. The present invention may notify the user when
individual components of the dynamic security deviate substantially
from the target rate.
[0009] It is an object of this invention to provide systems and
methods for creating and trading dynamic securities. In accordance
with the present invention, systems and methods for creating and
trading dynamic securities are provided.
[0010] A method according to the invention for creating a dynamic
security includes selecting or creating a basket of securities
chosen from a preferably pre-determined menu or list of securities
choices. The securities listed in the menu may include traditional
securities such as stocks, bonds, currencies, or futures. The menu
may also include less traditional forms of securities including
commodities, collectibles, or any other tradeable tangible or
intangible items.
[0011] A method according to the invention for trading the dynamic
security includes trading the entire basket of securities on an
electronic exchange. An additional method according to the
invention for trading the security includes isolating individual
components of the basket of securities and trading one or more of
them separate from the basket as a whole.
[0012] A method according to the invention for monitoring the
security involves monitoring the rate of return of the dynamic
security and of the individual components that constitute the
dynamic security and comparing them to a pre-determined rate of
return. When the monitored rates of return deviate substantially
from a pre-determined rate of return, the system preferably
notifies the user.
BRIEF DESCRIPTION OF THE DRAWINGS
[0013] Further features of the invention, its nature and various
advantages will be apparent from the following detailed description
of the preferred embodiments, taken in conjunction with the
accompanying drawings, in which like reference characters refer to
like parts throughout, and in which:
[0014] FIG. 1 is an illustration of an electronic implementation of
a dynamic security system in accordance with certain embodiments of
the present invention;
[0015] FIG. 2 is an illustration of an interface that may be
presented in accordance with certain embodiments of the present
invention; and
[0016] FIG. 3 is an illustration of a flow diagram for the creation
and trading of a dynamic security in accordance with certain
embodiments of the present invention.
DETAILED DESCRIPTION OF THE INVENTION
[0017] One example of systems and methods of creating and trading
dynamic securities according to the invention is as follows. A user
may select a plurality of securities including stocks, bonds,
baseball cards and modern art paintings to create a dynamic
security. A list of securities from which to choose may be provided
to a user. When trading occurs within this predetermined list, the
commissions for trading may be substantially reduced. The system
may monitor the value of the dynamic security as well as the value
of the individual securities of stocks, bonds, baseball cards and
modern art paintings. The system may periodically compare the rate
of return of the dynamic security and of the individual securities
to a pre-determined rate of return. If the actual rate of return
deviates from the target rate of return by more than a
pre-determined percentage such that the deviation is considered to
be a substantial deviation, then the system may notify the user.
The extent of deviation required in order to be considered a
"substantial deviation" may be configured by the user or may be
pre-configured by the system. At any point, the user may trade the
dynamic security as a whole, or the user may isolate or separate
individual securities from the plurality of securities that
constitute the dynamic security and trade these isolated securities
individually.
[0018] For example, a user may select 100 shares of Stock A at a
price of $10 each, 50 Bonds B at a price of $15, one rookie card of
baseball player C at a price of $100, and one original modern art
painting by artist D at a price of $5,000. This chosen plurality of
securities constitutes the user's dynamic security. The user
selects a target rate of return of 20%. The system monitors the
value of the dynamic security as well as the value of the
individual components of the dynamic security. If the value of the
dynamic security or the value of one of the individual components
deviates more than 50% (as pre-selected by the user) from the
targeted rate of return, the user will be notified of the
deviation.
[0019] For example, suppose baseball player C is elected to the
Baseball Hall of Fame, and this causes the value of C's rookie card
to double in value. The system would notify the user of the
dramatic increase in value of the investment since it exceeds the
pre-determined 20% target rate of return by more than the
pre-selected amount of 50%. Similarly, if an influential critic
disparages the recent efforts of artist D and it causes the value
of the modern art painting to drop in value to $1,000, the system
would notify the user of this dramatic decrease in value. In
response to these developments, the user may choose to hold on to
the baseball card and choose to trade the painting, or the user may
pursue alternate choices.
[0020] The previous example was intended for purposes of
illustration only. It should be understood, however, that the
systems and methods according to the invention apply to any
commodity that may be traded, including both traditional securities
investments as well as non-traditional securities of any sort,
whether it includes commodities, collectibles, or any other
possible tradeable tangible or intangible item. It is most
preferred that this system be implemented in an electronic trading
platform. Nevertheless, the systems and methods of the invention do
not necessarily require an electronic trading platform.
[0021] The present invention is now described in more detail in
conjunction with FIGS. 1-3.
[0022] FIG. 1 is an illustration of an electronic implementation of
a dynamic security system in accordance with certain aspects of the
present invention. As shown, system 100 may include one or more
user computers 102 that may be connected by one or more
communication links 104 and a computer network 106 to a trading
server 108.
[0023] In system 100, user computer 102 may be a computer,
processor, personal computer, laptop computer, handheld computer,
personal digital assistant, computer terminal, a combination of
such devices, or any other suitable data processing device. User
computer 102 may have any suitable device capable of receiving user
input and displaying user choices.
[0024] Communications links 104 may be optical links, wired links,
wireless links, coaxial cable links, telephone line links,
satellite links, lightwave links, microwave links, electromagnetic
radiation links, or any other suitable communications links for
communicating data between user computers 102 and trading server
108.
[0025] Computer network 106 may be the Internet, an intranet, a
local area network (LAN), a wide area network (WAN), a metropolitan
area network (MAN), a virtual private network (VPN), a wireless
network, an optical network, an asynchronous transfer mode network
(ATM), a cable network, a frame relay network, a digital subscriber
line network (DSL), or any other suitable network.
[0026] Trading server 108 may be a processor, a computer, a data
processing device, or any other suitable server capable of
processing electronic trades of dynamic securities.
[0027] All trading interactions between user computers 102
preferably occur via computer network 106, trading server 108, and
communications links 104. Traders or users at user computers 102
may conduct trading transactions using suitable input devices
connected to or part of user computers 102.
[0028] FIG. 2 is an illustration of an interface that may be
presented in accordance with certain aspects of the present
invention. As shown, interface 200 may include a menu of securities
202, up and down arrows 204, price of security field 206, quantity
of security field 208, up and down arrows 210, purchase button 212,
basket of securities 220, up and down arrows 222, and sell button
224.
[0029] In order to create a dynamic security using interface 200,
the user preferably first selects two or more different securities
from a menu of securities 202. Up and down arrows 204 are used to
scroll through the menu of securities. As the user scrolls through
the menu, individual securities will be highlighted one at a time.
The price of each highlighted security is displayed in field 206.
The user chooses the quantity to be purchased of the highlighted
security in field 208, said quantity which can be increased or
decreased through the use of up and down arrows 210. Once the
desired security and quantity thereof have been specified, the user
may submit the purchase order by pressing purchase button 212. Once
the purchase has been completed, the security will appear in the
basket of securities 220. Basket of securities 220 shows the
contents of the dynamic security.
[0030] In order to trade the dynamic security, the user can sell
the entire basket of securities 220 by highlighting the entire
collection of securities in field 220 and pressing sell button 224.
Alternatively, the user can sell individual securities by selecting
individual securities from field 220 through the use of the up and
down arrows 222. Once the desired individual security has been
selected from field 220, the user may complete the sale by pressing
sell button 224.
[0031] FIG. 3 is an illustration of a flow diagram for the creation
and trading of a dynamic security in accordance with certain
aspects of the present invention. As shown, a system and methods of
creating and trading dynamic securities 300 may include displaying
a menu or list of securities 302, and allowing the user to create a
dynamic security by selecting a plurality of securities from the
menu or list of securities 304. This preferably pre-selected list
may be pre-selected so as to allow securities providers to offer
their securities as part of a dynamic security for reduced or
otherwise altered commissions.
[0032] The system and methods 300 may monitor the trading price of
the dynamic security 306 or monitor the trading price of individual
securities that are included in the dynamic security 308. Step 310
involves comparing the rate of return on investment of the dynamic
security to a pre-determined target rate of return. Such comparison
allows the user to evaluate the growth of the dynamic security and
to compare its progress toward a target return. Step 312 performs a
similar comparison on the individual securities that constitute the
dynamic security. The user is notified in Step 314 and Step 316
when securities deviate substantially from the pre-determined
target rate. Such notification may occur when the value of the
security rises considerably, which may prompt the user to sell at a
great profit or pursue some other course of action. Such
notification may also occur when a security stagnates for a
considerable time or when it decreases substantially in value,
which may prompt the user to sell the security or pursue some other
course of action. In either case, the volatile security of interest
is brought to the attention of the user.
[0033] If the user decides to sell a security, Step 318 allows the
user to trade either the entire dynamic security or else to trade
the individual securities that constitute the dynamic security. At
any time, the user may return to the beginning 302 and add
securities to the basket of securities.
[0034] In one preferable embodiment of the invention, a dynamic
security may be referred to by alpha-numeric indicators. These
indicators may correspond to individual securities. For example, a
security may be designated 100.alpha..beta.32 wherein the
100.alpha. corresponds to 100 shares of IBM stock, the .beta.
corresponds to 1 Henry Aaron rookie baseball card and the 32
corresponds to 32 '07 United States Treasury Bonds. The security is
identified as 100.alpha..beta.32 and that is how it is traded.
Alternatively, the security 100.alpha..beta.32 can be broken down
into component parts and traded separately--e.g., 100.alpha.,
.beta., 32 or in some other suitable combination. The total number
of different securities in a dynamic security may be
user-configured or may be pre-set by the security provider to be
limited to a particular number.
[0035] Accordingly, systems and methods for creating and trading
dynamic securities are provided. It will be understood that the
foregoing is merely illustrative of the principles of the invention
and that various modifications can be made by those skilled in the
art without departing from the scope and spirit of the invention,
with is limited only by the claims that follow.
* * * * *