METHOD AND SYSTEM FOR PROVIDING ELECTRONIC INFORMATION FOR RISK ASSESEMENT AND MANAGEMENT VIA NET WORTH FOR MULTI-MARKET ELECTRONIC TRADING

• US 20100312718A1
• Filed: 07/12/2010
• Published: 12/09/2010
• Est. Priority Date: 06/08/2004
• Status: Abandoned Application

• Current Assignee: Rosenthal Collins Group LLC (Marex Spectron Group Ltd.)
• Original Assignee: Rosenthal Collins Group LLC (Marex Spectron Group Ltd.)
• Inventors: Rosenthal, Leslie, Adams, Brian
• Application Number:
  US12/834,300
• Publication Number:
  US 20100312718A1
• Time in Patent Office: Days
• US Class Current: 705/36R
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A method and system for providing risk management, reporting and assessment for multi-market electronic trading. The method and system allow risk assessment management and reporting to be determined using current and historical trading losses over a pre-determined trading period compared against a pre-determined percentage of current and historical net worth values for electronic trading at a trading firm, a trading firm office and a trading account. Risk thresholds are selectively and dynamically configurable for automatically displaying risk information for and automatically disabling electronic trading when risk thresholds are exceeded.

Claims

1. A method for analyzing risk for electronic trading, comprising:

collecting automatically and periodically in real-time electronic trading information for an electronic trader via a communications network via a risk application executing in a memory on a server network device with one or more processors,

wherein the collected electronic trading information includes current and historical electronic trading execution information comprising current net worth information, current profit and loss information, historical net worth information and historical profit and loss information for the electronic trader and current market trading information from a plurality of data streams from a plurality of electronic trading exchanges;

processing the electronic trading information via the risk application on the server network device with a pre-determined method to create a set of risk parameters, wherein the set of risk parameters include current risk parameters and historical risk parameters and provide an integrated view of current and historical trading activities and trading resources of the electronic trader across all electronic trading exchanges the electronic trader is trading on;

determining a risk assessment from the created set of risk parameters, wherein the risk assessment includes one or more risk thresholds determined automatically and dynamically from the created set of risk parameters and wherein the one or more risk threshold values are dynamically and automatically determined using a pre-determined hierarchy;

conducting a test to determine if the risk assessment exceeds one or more determined risk thresholds,

and if so, issuing one or more risk trading alerts in real-time from the server network device to another risk application on a target network device with one or more processors via the communications network,

wherein the test is conducted periodically and continuously in real-time as the electronic trader'"'"'s positions dynamically change and as market conditions dynamically change on the plurality of electronic trading exchanges,

wherein the one or more risk trading alerts are used to notify one or more brokers servicing the electronic trader and other designated parties that the electronic trader has currently exceed one or more risk thresholds; and

displaying automatically the one or more issued risk trading alerts in one or more different colors via the risk application in one or more graphical windows on a graphical user interface on the server network device.

2. One or more processors with a computer readable medium having stored therein a plurality of instructions for causing the one or more processors to execute the steps of the method of claim 1.

3. The method of claim 1 wherein the pre-determined hierarchy includes a trading account hierarchy comprising a trading firm, a trading firm office and a trading account.

4. The method of claim 1 wherein the risk assessment includes determining a plurality of risk ratios comprising a calculation of any current and historical trading losses over a pre-determined trading period against a pre-determined percentage of current and historical net worth value for the electronic trader.

5. The method of claim 4 wherein the pre-determined trading period is a thirty day trading period.

6. The method of claim 4 wherein the pre-determined percentage of net worth value includes a 25%, 40% and 60% of net worth value.

7. The method of claim 1 wherein the one or more graphical windows include a Risk Display window, a Risk Query window, an Aggregated Book View/Ask Bid Volume (ABV) window, an Order Ticket window or a Reports window.

8. The method of claim 1 wherein the one or more issued risk trading alerts include a plurality of different notification, warning and emergency risk trading alerts.

9. The method of claim 8 wherein the notification risk trading alert corresponds to a trading loss of 25% of net worth of the electronic trader, a warning risk trading alert corresponds to a trading loss of 40% of the net worth of the electronic trader and an emergency trading alert corresponds to a trading loss of 60% of the net work of the electronic trader.

10. The method of claim 1 wherein the one more different colors include a green color for an issued risk trading alert for a notification, a yellow color for an issued risk trading alert for a warning and a red color for an issued risk trading alert for an emergency.

11. The method of claim 1 further comprising:

displaying automatically the one or more risk trading alerts in or more different colors via another risk application in one or more graphical windows on a graphical user interface on the target network device.

12. The method of claim 8 further comprising:

conducting a test on the risk application on the server network device to determine if any of the issued one or more risk trading alerts include an emergency risk trading alert, and if so

sending a message from the server network device via the communications network to the target network device indicating that any further electronic trading is being suspended;

rejecting automatically any further electronic trade requests on the server network device requested by the target network device via the communications network.

13. The method of claim 1 wherein the issued risk trading alerts are displayed graphically using one more different colors in one or more graphical windows on a graphical user interface including a risk management graphical meter, a graphical line graph or a graphical bar graph.

14. The method of claim 1 wherein the one or more risk thresholds are selectively and dynamically configurable from the server network device.

15. A system for analyzing risk for electronic trading, comprising in combination:

means for collecting automatically and periodically in real-time electronic trading information for an electronic trader via a communications network via a risk application executing in a memory on a server network device with one or more processors,

wherein the collected electronic trading information includes current and historical electronic trading execution information comprising current net worth information, current profit and loss information, historical net worth information and historical profit and loss information for the electronic trader and current market trading information from a plurality of data streams from a plurality of electronic trading exchanges;

means for processing the electronic trading information via the risk application on the server network device with a pre-determined method to create a set of risk parameters, wherein the set of risk parameters include current risk parameters and historical risk parameters and provide an integrated view of current and historical trading activities and trading resources of the electronic trader across all electronic trading exchanges the electronic trader is trading on;

means for determining a risk assessment from the created set of risk parameters, wherein the risk assessment includes one or more risk thresholds determined automatically and dynamically from the created set of risk parameters and wherein the one or more risk threshold values are dynamically and automatically determined using a pre-determined hierarchy;

means for conducting a test to determine if the risk assessment exceeds one or more determined risk thresholds, and if so,

means for issuing one or more risk trading alerts in real-time from the server network device to another risk application on a target network device with one or more processors via the communications network,

wherein the test is conducted periodically and continuously in real-time as the electronic trader'"'"'s positions dynamically change and as market conditions dynamically change on the plurality of electronic trading exchanges,

wherein the one or more risk trading alerts are used to notify one or more brokers servicing the electronic trader and other designated parties that the electronic trader has currently exceed one or more risk thresholds;

means for displaying automatically the one or more issued risk trading alerts in one or more different colors via the risk application in one or more graphical windows on a graphical user interface on the server network device;

means for displaying automatically the one or more risk trading alerts in or more different colors via another risk application in one or more graphical windows on a graphical user interface on the target network device; and

means for conducting a test on the risk application on the server network device to determine if any of the issued one or more risk trading alerts include an emergency risk trading alert, and if so sending a message from the server network device via the communications network to the target network device indicating that any further electronic trading is being suspended, and rejecting automatically any further electronic trade requests on the server network device requested by the target network device via the communications network.

16. The system of claim 15 wherein the pre-determined hierarchy includes a trading account hierarchy comprising a trading firm, a trading firm office and a trading account.

17. The system of claim 15 wherein the risk assessment includes determining a plurality of risk ratios comprising a calculation of any current and historical trading losses over a pre-determined trading period against a pre-determined percentage of current and historical net worth value for the electronic trader.

18. The system of claim 15 wherein the one or more graphical windows include a Risk Display window, a Risk Query window, an Aggregated Book View/Ask Bid Volume (ABV) window, an Order Ticket window or a Reports window.