Computer-implemented securities trading system

• US 8,606,685 B2
• Filed: 09/04/2003
• Issued: 12/10/2013
• Est. Priority Date: 03/25/1996
• Status: Expired due to Fees

• Current Assignee: CFPH LLC (Cantor Fitzgerald, L.P.)
• Original Assignee: CFPH LLC (Cantor Fitzgerald, L.P.)
• Inventors: Keiser, Timothy M., Burns, Michael R.
• Primary Examiner(s): Kazimi, Hani M
• Assistant Examiner(s): Graham, Clement B
• Application Number:
  US10/655,409
• Publication Number:
  US 20040049447A1
• Time in Patent Office: 3,750 Days
• Field of Search: 705/34, 705 35- 38, 705/35.R, 705/36.R, 705/38.R, 725/24
• US Class Current: 705/37
• CPC Class Codes: G06Q 10/063 Operations research, analysis or management
• 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

Abstract

A computer-implemented financial management system provides the trading of securities via a network using virtual currency. A server computer receives buy and sell orders for derivative financial instruments from a plurality of client computers. The server computer attempts to match the buy and sell orders and then generates a market price through the use of a virtual specialist program executed by the server computer. The virtual specialist program responds to an imbalance in the matching of the buy and sell orders. The virtual currency accumulated by HSX account holders as a result of successful trading may be converted to another currency, credited toward the cost of merchandise provided through a vendor'"'"'s web site, etc.

Claims

1. A method, comprising:

determining, using a computing device, an initial price of a financial instrument based at least in part on an estimated revenue for a movie, in which the financial instrument represents the movie;

receiving an order to buy the financial instrument;

receiving an order to sell the financial instrument;

determining, using the computing device, an imbalance between a quantity of received buy orders and a quantity of received sell orders for the financial instrument;

determining, using the computing device, a price of the financial instrument based at least in part on the imbalance; and

executing a trade on the financial instrument at the determined price.

2. The method of claim 1, in which the estimated revenue for the movie comprises a potential box office revenue for the movie.

3. The method of claim 1, further comprising:

attaching a warrant with a strike price to the financial instrument.

4. The method of claim 1, further comprising:

determining that the imbalance exceeds a threshold; and

stopping trading of the financial instrument based on the imbalance exceeding the threshold.

5. The method of claim 4, in which determining the price of the financial instrument comprises:

determining a price increase for the financial instrument based on the imbalance.

6. The method of claim 5, in which determining the price of the financial instrument further comprises:

comparing a threshold to the price increase; and

increasing the price of the financial instrument when the price increase exceeds the threshold.

7. The method of claim 5, in which determining the price of the financial instrument further comprises:

increasing a previous price of the financial instrument from a previous cycle by the price increase.

8. The method of claim 4, in which determining the price of the financial instrument comprises:

determining a price decrease for the financial instrument based on the imbalance.

9. The method of claim 8, in which determining the price of the financial instrument further comprises:

comparing a threshold to the price decrease; and

decreasing the price of the financial instrument when the price decrease exceeds the threshold.

10. The method of claim 8, in which determining the price of the financial instrument further comprises:

decreasing a previous price of the financial instrument from a previous cycle by the price decrease.

11. The method of claim 1, in which receiving the order to buy the financial instrument comprises:

receiving, from a remote device, the order to buy the financial instrument, in which the computing device and the remote device are in communication over a network.

12. An apparatus, comprising:

at least one computing device; and

a non-transitory tangible medium storing instructions that, when executed by the at least one computing device, cause the at least one computing device at least to;

determine an initial price of a financial instrument based at least in part on an estimated revenue for a movie, in which the financial instrument represents the movie;

receive an order to buy the financial instrument;

receive an order to sell the financial instrument;

determine an imbalance between a quantity of received buy orders and a quantity of received sell orders for the financial instrument;

determine a price of the financial instrument based at least in part on the imbalance; and

execute a trade on the financial instrument at the determined price.

13. The apparatus of claim 12, in which the estimated revenue for the movie comprises a potential box office revenue for the movie.

14. The apparatus of claim 12, wherein the instructions, when executed by the at least one computing device, further cause the at least one computing device at least to:

attach a warrant with a strike price to the financial instrument.

15. The apparatus of claim 12, wherein the instructions, when executed by the at least one computing device, further cause the at least one computing device at least to:

determine that the imbalance exceeds a threshold; and

stop trading of the financial instrument based on the imbalance exceeding the threshold.

16. The apparatus of claim 15, in which determining the price of the financial instrument comprises:

determining a price increase for the financial instrument based on the imbalance.

17. The apparatus of claim 16, in which determining the price of the financial instrument further comprises:

comparing a threshold to the price increase; and

increasing the price of the financial instrument when the price increase exceeds the threshold.

18. The apparatus of claim 16, in which determining the price of the financial instrument further comprises:

increasing a previous price of the financial instrument from a previous cycle by the price increase.

19. The apparatus of claim 15, in which determining the price of the financial instrument comprises:

determining a price decrease for the financial instrument based on the imbalance.

20. The apparatus of claim 19, in which determining the price of the financial instrument further comprises:

comparing a threshold to the price decrease; and

decreasing the price of the financial instrument when the price decrease exceeds the threshold.

21. The apparatus of claim 19, in which determining the price of the financial instrument further comprises:

decreasing a previous price of the financial instrument from a previous cycle by the price decrease.

22. The apparatus of claim 12, in which the at least one computing device comprises the non-transitory tangible medium.

23. The apparatus of claim 12, in which the at least one computing device does not comprise the non-transitory tangible medium.

24. An article of manufacture, comprising:

a non-transitory tangible medium storing instructions that, when executed by at least one computing device, cause the at least one computing device at least to;

determine an initial price of a financial instrument based at least in part on an estimated revenue for a movie, in which the financial instrument represents the movie;

receive an order to buy the financial instrument;

receive an order to sell the financial instrument;

determine an imbalance between a quantity of received buy orders and a quantity of received sell orders for the financial instrument;

determine a price of the financial instrument based at least in part on the imbalance; and

execute a trade on the financial instrument at the determined price.

25. The article of manufacture of claim 24, in which the estimated revenue for the movie comprises a potential box office revenue for the movie.

26. The article of manufacture of claim 25, further comprising the at least one computing device.

27. The article of manufacture of claim 24, wherein the instructions, when executed by the at least one computing device, further cause the at least one computing device at least to:

attach a warrant with a strike price to the financial instrument.

28. The article of manufacture of claim 24, wherein the instructions, when executed by the at least one computing device, further cause the at least one computing device at least to:

determine that the imbalance exceeds a threshold; and

stop trading of the financial instrument based on the imbalance exceeding the threshold.

29. The article of manufacture of claim 28, in which determining the price of the financial instrument comprises:

determining a price increase for the financial instrument based on the imbalance.

30. The article of manufacture of claim 29, in which determining the price of the financial instrument further comprises:

comparing a threshold to the price increase; and

increasing the price of the financial instrument when the price increase exceeds the threshold.

31. The article of manufacture of claim 29, in which determining the price of the financial instrument further comprises:

increasing a previous price of the financial instrument from a previous cycle by the price increase.

32. The article of manufacture of claim 28, in which determining the price of the financial instrument comprises:

determining a price decrease for the financial instrument based on the imbalance.

33. The article of manufacture of claim 32, in which determining the price of the financial instrument further comprises:

comparing a threshold to the price decrease; and

decreasing the price of the financial instrument when the price decrease exceeds the threshold.

34. The article of manufacture of claim 32, in which determining the price of the financial instrument further comprises:

decreasing a previous price of the financial instrument from a previous cycle by the price decrease.