Systems and methods to balance portfolios of securities

• US 8,566,223 B2
• Filed: 05/04/2012
• Issued: 10/22/2013
• Est. Priority Date: 01/30/2012
• Status: Active Grant

• Current Assignee: Charles Schwab & Company Incorporated (Charles Schwab Corporation)
• Original Assignee: Motif Investing Incorporated
• Inventors: Walia, Hardeep Singh, Hilaly, Tariq Ali, Ghosh, Tuhin, Harris, Michael Vileisis
• Primary Examiner(s): TINKLER, MURIEL S
• Application Number:
  US13/464,719
• Publication Number:
  US 20130198014A1
• Time in Patent Office: 536 Days
• Field of Search: 705/35, 705/36.R, 705/37
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A system and associated method allows a client to balance the client'"'"'s security portfolio that includes constituent securities. A client device is provided with a client interface. A host server is coupled to the client device and executes logic resources for balancing the portfolio. A balancing engine allows a client to manipulate the client'"'"'s security portfolio and keep it in balance at all times. The balancing engine provides that any constituent moved by a client remains at a declared level and remaining constituents are proportionally balanced so that the sum of the weights adds to 100%.

Claims

1. A system for allowing a client to balance a client'"'"'s security portfolio that includes constituent securities with a set of securities within different segments of securities, comprising:

a client device with a client interface;

a host server coupled to the client device which in operation executes logic resources for balancing the portfolio;

a balancing engine with logic resources that in operation allow a client to change the client'"'"'s security portfolio with different segments and keep it in balance at all times, wherein the balancing engine in operation is configured to provide that any constituent moved by a client remains at a declared level and remaining constituents are proportionally balanced so that the sum of the weights adds to 100%, the logic resources determining if there are any unlocked securities that do not have weights set at levels declared by the client, if there are unlocked securities then, the set of securities is filtered to only include the unlocked securities;

computing a sum of the unlocked securities;

for each of a security to be adjusted, an adjustment is calculated as a weight of the security divided by a sum of weights of securities to be adjusted multiplied by a total amount to apply across the set of securities to create a proportional adjustment that is added to the security'"'"'s weight;

when there are no unlocked securities in the set of securities then the logic resources determines if it is allowed to modify the weights of locked securities whose weights have been set at declared levels by the client;

when a modification of locked securities is allowed, then the locked securities are used as the set of securities to be adjusted;

recalculating segment weights as a sum of the weights of securities within each segment; and

updating user interface elements related to the segments.

2. The system of claim 1, wherein the balancing engine in operation is configured to provide for adjustment of weight for a group of securities.

3. The system of claim 1, wherein positive and negative weights can be adjusted to represent long or short exposure to an underlying security, wherein a sum of an absolute value of the negative and positive percentages adds to 100%.

4. The system of claim 1, wherein a declared weight level of a stock can be overridden by client adjustment.

5. The system of claim 1, wherein a client can disable declared weight levels of a stock for a given constituent.

6. The system of claim 1, wherein errors are displayed to the client when the declared weight level of a stock prevents the desired action.

7. The system of claim 1, further comprising:

a trading engine which in operation processes client orders independently from other clients.

8. The system of claim 7, wherein the trading engine in operation does not net client orders when processing client orders.

9. The system of claim 1, further comprising:

a pricing engine configured to provide a market price of shares transacted from the inventory account.

10. The system of claim 1, wherein a client'"'"'s order is based on a pre-packaged or customized thematically weighted portfolio.

11. The system of claim 1, wherein the host server is configured to receive requests for dynamic advertisement.

12. The system of claim 1, wherein the client device is selected from at least one of, a smart or dumb terminal, network computer, personal digital assistant, wireless device, smartphone, tablet, game machine, music player, mobile telephone, laptop, palmtop, wireless telephone, information appliance, workstation, minicomputer, mainframe computer and other computing device.

13. The system of claim 1, wherein the client device includes logic resources that allow a client to perform at least one of, create, compare, customize, promote, track, optimize, and shop for portfolios of securities.

14. A method for allowing a client to balance a client'"'"'s security portfolio that includes constituent securities, comprising:

providing a client device with a client interface, and a balancing engine;

using the balancing engine to allow the client to change the client'"'"'s security portfolio with different segments and keep it in balance at all times;

applying the balancing engine to provide that any constituent moved by the client remains at a declared level and remaining constituents are proportionally balanced so that the sum of the weights adds to 100%;

determining if there are any unlocked securities that do not have weights set at levels declared by the client, if there are unlocked securities then, the set of securities is filtered to only include the unlocked securities;

computing a sum of the unlocked securities;

for each of a security to be adjusted, an adjustment is calculated as a weight of the security divided by a sum of weights of securities to be adjusted multiplied by a total amount to apply across the set of securities to create a proportional adjustment that is added to the security'"'"'s weight;

when there are no unlocked securities in the set of securities then the logic resources determines if it is allowed to modify the weights of locked securities whose weights have been set at declared levels by the client;

when a modification of locked securities is allowed, then the locked securities are used as the set of securities to be adjusted;

recalculating segment weights as a sum of the weights of securities within each segment; and

updating user interface elements related to the segments.

15. The method of claim 14, further comprising:

using the balancing engine to provide for adjustment of weight for a group of securities.

16. The method of claim 14, further comprising:

adjusting positive and negative weights to represent long or short exposure to an underlying security, wherein a sum of an absolute value of the negative and positive percentages adds to 100%.

17. The method of claim 14, wherein a declared weight level of a stock can be overridden by client adjustment.

18. The method of claim 14, further comprising:

enabling the client to disable declared weight levels for a given constituent.

19. The method of claim 14, further comprising:

displaying errors to the client when a declared weight level prevents the desired action.

20. The method of claim 14, further comprising:

providing a trading engine to processes client orders independently from other clients.

21. The method of claim 20, wherein the trading engine in operation does not net client orders when processing client orders.

22. The method of claim 14, further comprising:

using a pricing engine of the system to provide a market price of shares transacted from the inventory account.

23. The method of claim 14, wherein the client'"'"'s order is based on a pre-packaged or customized thematically weighted portfolio.

24. The method of claim 14, further comprising:

receiving requests for dynamic advertisement.