Method and apparatus for enabling individual or smaller investors or others to create and manage a portfolio of securities or other assets or liabilities on a cost effective basis

• US 7,546,267 B2
• Filed: 07/28/2003
• Issued: 06/09/2009
• Est. Priority Date: 03/11/1998
• Status: Expired due to Term

• Current Assignee: Folio Financial Incorporated (Goldman Sachs Group Incorporated)
• Original Assignee: FOLIOfn Incorporated (Goldman Sachs Group Incorporated)
• Inventors: Wallman, Steven M. H.
• Primary Examiner(s): MEINECKE DIAZ, SUSANNA M
• Application Number:
  US10/627,873
• Publication Number:
  US 20040024678A1
• Time in Patent Office: 2,143 Days
• Field of Search: 705/36.R, 705/37
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• 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 40/10 Tax strategies
• CPC Class Codes: G06Q 40/12 Accounting

Abstract

Smaller investors can create and manage on a cost-effective basis a complex portfolio of securities using a mechanism that enables the investor to provide to the system the investor'"'"'s preferences regarding his portfolio, to generate a portfolio, including fractional shares, that reflects the investor'"'"'s preferences. The system then permits aggregation of the orders, and netting of orders, generated by multiple investors at various times during the day for execution. In addition, the structure of the computer-based system of the present invention allows its cost to be based on access to or usage of the system (such as a monthly fee) as opposed to by securities orders entered into the system as per common brokerage. The result is that the investor can create a portfolio of directly owned securities with attributes, such as diversification, similar to a mutual fund.

Claims

1. A system for creating a portfolio of market tradable assets or liabilities and executing trades in the market tradable assets or liabilities to modify the portfolio, comprising:

a) a processor interfaced with an investor'"'"'s computer to select a plurality of market tradable assets or liabilities to be in the investor'"'"'s portfolio based on the investor'"'"'s indicated preferences, to manage the portfolio in accordance with market changes and changes in the investor'"'"'s indicated preferences, and to electronically place at least one trading order in accordance with the investor'"'"'s indicated preferences;

b) a communication interface coupled to the processor and coupled to a plurality of other investors by which the processor electronically places the at least one order; and

c) a central processor coupled to the communication interface, receiving a plurality of trading orders from among the plurality of investors , including at least an order for an odd lot of at least one market tradable asset or liability, an order for a fractional share of at least one market tradable asset or liability and an order for a single share of at least one market tradable asset or liability, aggregating all received trading orders into a single order for each market tradable asset or liability among the received trading orders, and electronically forwarding the aggregated trading orders for execution to a third party, wherein said central processor further uses a separate account to maintain up to one share for each of the plurality of market tradable assets or liabilities among the aggregated trading orders that included at least one fractional share order in said combining, said separate account made available for use as needed to aggregate the trading orders for execution.

2. An apparatus for creating a portfolio of market tradable assets or liabilities and executing trades in the market tradable assets or liabilities to modify the portfolio, comprising:

a) a processor interfaced with an investor'"'"'s computer to select a plurality of market tradable assets or liabilities to be in the investor'"'"'s portfolio based on the investor'"'"'s indicated preferences, to manage the portfolio in accordance with market changes and changes in the investor'"'"'s indicated preferences, and to electronically place at least one trading order in accordance with the investor'"'"'s indicated preferences;

b) a communication interface coupled to the processor and coupled to a plurality of other investors by which the processor electronically places the at least one order; and

c) a central processor coupled to the communication interface, receiving a plurality of trading orders from among the plurality of investors, including at least one order for a single share of at least one market tradable asset or liability and at least one order for a fractional share of at least one market tradable asset or liability, aggregating all received trading orders into a single order for each market tradable asset or liability among the received trading orders, and electronically forwarding the aggregated trading orders for execution to a third party, wherein said central processor further uses a separate account to maintain up to one share for each of the plurality of market tradable assets or liabilities among the aggregated trading orders that included at least one fractional share order in said combining, said separate account made available for use as needed to aggregate the trading orders for execution.

3. An apparatus for creating a portfolio of market tradable assets or liabilities and executing trades in the market tradable assets or liabilities to modify the portfolio, comprising:

a) a processor interfaced with an investor'"'"'s computer to select a plurality of market tradable assets or liabilities to be in the investor'"'"'s portfolio based on the investor'"'"'s indicated preferences, to manage the portfolio in accordance with market changes and changes in the investor'"'"'s indicated preferences, and to electronically place at least one trading order in accordance with the investor'"'"'s indicated preferences;

b) a communication interface coupled to the processor and coupled to a plurality of other investors by which the processor electronically places the at least one order; and

c) a central processor coupled to the communication interface, receiving a plurality of trading orders from among the plurality of investors, including an order for an odd lot of shares of at least one market tradable asset or liability and an order for a fractional share of at least one market tradable asset or liability, aggregating all received trading orders into a single order for each market tradable asset or liability among the received trading orders, and electronically forwarding the aggregated trading orders for execution to a third party, wherein said central processor further uses a separate account to maintain up to one share for each of the plurality of market tradable assets or liabilities among the aggregated trading orders that included at least one fractional share order in said combining, said separate account made available for use as needed to aggregate the trading orders for execution.

4. An apparatus for creating a portfolio of market tradable assets or liabilities and executing trades in the market tradable assets or liabilities to modify the portfolio, comprising:

a) a processor interfaced with an investor'"'"'s computer to select a plurality of market tradable assets or liabilities to be in the investor'"'"'s portfolio based on the investor'"'"'s indicated preferences, to manage the portfolio in accordance with market changes and changes in the investor'"'"'s indicated preferences, and to electronically place at least one trading order in accordance with the investor'"'"'s indicated preferences;

b) a communication interface coupled to the processor and coupled to a plurality of other investors by which the processor electronically places the at least one order; and

c) a central processor coupled to the communication interface, receiving a plurality of trading orders from among the plurality of investors, including an order for a fractional share of at least one market tradable asset or liability, aggregating all received trading orders into a single order for each market tradable asset or liability among the received trading orders, and electronically forwarding the aggregated trading orders for execution to a third party, wherein said central processor further uses a separate account to maintain up to one share for each of the plurality of market tradable assets or liabilities among the aggregated trading orders that included at least one fractional share order in said combining, said separate account made available for use as needed to aggregate the trading orders for execution.

5. An apparatus for creating a portfolio of market tradable assets or liabilities and executing trades in the market tradable assets or liabilities to modify the portfolio, comprising:

a) a processor interfaced with an investor'"'"'s computer to select a plurality of market tradable assets or liabilities to be in the investor'"'"'s portfolio based on the investor'"'"'s indicated preferences, to manage the portfolio in accordance with market changes and changes in the investor'"'"'s indicated preferences, and to electronically place at least one trading order in accordance with the investor'"'"'s indicated preferences;

b) a communication interface coupled to the processor and coupled to a plurality of other investors by which the processor electronically places the at least one order; and

c) wherein said processor receives a plurality of trading orders from among the plurality of investors including an order for a fractional share of at least one market tradable asset or liability, aggregates all received trading orders into a single order for each market tradable asset or liability among the received trading orders, and electronically forwards the aggregated trading orders for execution to a third party, and wherein said central processor further uses a separate account to maintain up to one share for each of the plurality of market tradable assets or liabilities among the aggregated trading orders that included at least one fractional share order in said combining, said separate account made available for use as needed to aggregate the trading orders for execution.