Systems and Methods for a Cross-Linked Investment Trading Platform

• US 20100005035A1
• Filed: 07/02/2009
• Published: 01/07/2010
• Est. Priority Date: 07/02/2008
• Status: Abandoned Application

• Current Assignee: Morgan Stanley Services Group Inc. (Morgan Stanley)
• Original Assignee: Cake Financial Corp. (Morgan Stanley)
• Inventors: Sharma, Manu, Junkergard, Sven, Carpenter, Steven A.
• Application Number:
  US12/497,513
• Publication Number:
  US 20100005035A1
• Time in Patent Office: Days
• US Class Current: 705/36.R
• 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

Systems and methods for an investment trading platform are described. An investment platform forms electronic links among member investors and investment portfolios and brokerage accounts of the investors, wherein a portfolio includes at least one investment position. The investment platform shares between the investors the portfolio data or the portfolios and/or brokerage data of the brokerage accounts. A trading application programming interface (API) conducts operations in portfolios and/or brokerage accounts in response to the portfolio data and/or the brokerage data. The trading API conducts automatic operations in portfolios and/or brokerage accounts in response to the portfolio data and/or the brokerage data.

Claims

1. A method comprising:

forming an electronic network between a plurality of investors, wherein the electronic network includes a coupling to portfolios and online brokerage accounts of the plurality of investors;

sharing between the plurality of investors via the electronic network at least one of investment data and brokerage data, wherein the investment data comprises data of the portfolios, wherein a portfolio comprises at least one investment position, wherein the brokerage data comprises data of the brokerage accounts; and

executing a first action involving an investment position in at least one of a first portfolio and a first brokerage account of a first investor of the plurality of investors, wherein the executing is in response to the at least one of the investment data and brokerage data indicating a second action taken in at least one of a second portfolio and a second brokerage account of at least one second investor of the plurality of investors.

2. The method of claim 1, wherein the executing of the first action comprises receiving an automatic notification of the second action taken in the second portfolio.

3. The method of claim 2, wherein the executing of the first action comprises, in response to the notification, presenting an action option to the first investor of taking the first action in the first portfolio.

4. The method of claim 2, wherein the executing of the first action comprises, in response to the notification, presenting an action option to the first investor of taking the first action in the first brokerage account.

5. The method of claim 2, wherein the executing of the first action comprises, in response to the notification, automatically taking the first action in the first portfolio.

6. The method of claim 2, wherein the executing of the first action comprises, in response to the notification, automatically taking the first action in the first brokerage account.

7. The method of claim 1, wherein the second action involves a second investment position that is equivalent to the first investment position.

8. The method of claim 1, wherein the second action involves a second investment position that is identical to the first investment position.

9. The method of claim 1, wherein the first action is equivalent to the second action.

10. The method of claim 1, wherein the first action is different than the second action.

11. The method of claim 1, wherein the first action is proportional to the second action.

12. The method of claim 1, wherein the first action is a trade involving the investment position.

13. The method of claim 12, wherein the executing comprises automatically issuing a command to a broker to initiate authentication of the trade, wherein the broker controls the brokerage account.

14. The method of claim 13, wherein the executing comprises automatically issuing a command to execute the trade.

15. The method of claim 14, wherein the executing comprises periodically issuing a command to check status of the trade.

16. The method of claim 15, wherein the executing comprises automatically issuing a notification message to the investor upon completion of the trade.

17. The method of claim 13, wherein the executing comprises automatically issuing a status message to the investor advising of status of the trade.

18. The method of claim 1, wherein the first action is a transaction option, wherein the transaction option includes at least one of a buy option and a sell option corresponding to an investment position.

19. The method of claim 1, wherein the first action is a transaction recommendation, wherein the transaction recommendation includes at least one of a buy recommendation and a sell recommendation corresponding to an investment position.

20. The method of claim 1, wherein the second action is change in a rating of the investment position.

21. The method of claim 1, wherein the second action is a change in value of the investment position.

22. The method of claim 1, wherein the second action is a trade involving the investment position.

23. The method of claim 1, comprising aggregating the investment data of the portfolios and the online brokerage accounts.

24. The method of claim 1, comprising aggregating the investment data of the portfolios.

25. The method of claim 24, comprising aggregating the investment data to include data of the online brokerage accounts.

26. The method of claim 25, comprising ranking each investor relative to every other investor of the plurality of investors using a rank score, the ranking according to investment performance derived from the investment data.

27. The method of claim 26, wherein the rank score ranks the investor relative to other investors based upon the investment data, wherein generating the rank score comprises generating the rank score for each investor by combining a skill score, a persistence score and a confidence score corresponding to the investor.

28. The method of claim 27, wherein the skill score represents a Sharpe Ratio (SR) and an Information Ratio (IR) of the investor.

29. The method of claim 28, comprising generating the skill score, wherein generating the skill score comprises calculating the SR of each investor, wherein the SR of an investor comprises an average of an excess monthly return divided by a standard deviation of the excess monthly return.

30. The method of claim 29, wherein generating the skill score comprises calculating the IR of each investor, wherein the IR of an investor comprises an average of a weighted excess active monthly return divided by a standard deviation of the weighted excess active monthly return.

31. The method of claim 30, wherein generating the skill score comprises calculating a Final Ratio (FR) of each investor representing the IR and the SR of the investor, wherein calculating the FR of each investor comprises calculating a weighted average of the IR and the SR, wherein generating the skill score comprises normalizing the FR.

32. The method of claim 27, comprising generating the persistence score, wherein the persistence score represents skill of the investor relative to a benchmark.

33. The method of claim 32, wherein generating the persistence score comprises:

determining a winning score for each investor as a number of times the investor outperformed a benchmark;

calculating a mean for each investor using a number of trials, wherein the number of trials is a sum of a number of times the investor outperformed the benchmark and a number of times the investor failed to outperform the benchmark;

calculating a standard deviation of the number of trials for each investor;

calculating a distance from the mean for each investor as a first quantity divided by the standard deviation, wherein the first quantity is determined by subtracting the mean from the winning score;

generating a delta score for each investor by exponentiating the distance.

34. The method of claim 33, wherein generating the persistence score comprises:

identifying a minimum delta score among the delta scores of the plurality of investors;

generating a third interim score for each investor by subtracting the minimum delta score from the delta score of each investor;

identifying a maximum third interim score of the plurality of investors;

generating a fourth interim score for each investor by dividing the third interim score of each investor by the maximum third interim score;

generating the persistence score for each investor by multiplying the fourth interim score by 100.

35. The method of claim 27, comprising generating the confidence score, wherein the confidence score represents an investment win percentage relative to an investment loss percentage.

36. The method of claim 35, wherein generating the confidence score comprises:

calculating a weighted average win percentage for a portfolio of each investor;

calculating a weighted average loss percentage for a portfolio of each investor;

generating the confidence score as a ratio of the weighted average win percentage to the weighted average loss percentage.

37. The method of claim 36, wherein calculating the weighted average win percentage comprises:

calculating a first quantity by multiplying a percentage of the investment position in the portfolio and a percentage gain for the investment position, wherein the first quantity is calculated for each period of time of a plurality of periods of time for which the investment position outperformed a benchmark;

calculating a second quantity by summing each first quantity for all periods of time of the plurality of periods of time for which the investment position outperformed the benchmark;

calculating the weighted average win percentage by dividing the second quantity by a total number of investment positions that outperformed the benchmark.

38. The method of claim 37, wherein calculating the weighted average loss percentage comprises:

calculating a third quantity by multiplying a percentage of the investment position in the portfolio and a percentage loss for the investment position, wherein the third quantity is calculated for each period of time of a plurality of periods of time for which the investment position underperformed a benchmark;

calculating a fourth quantity by summing each third quantity for all periods of time of the plurality of periods of time for which the investment position underperformed the benchmark;

calculating the weighted average loss percentage by dividing the third quantity by a total number of investment positions that underperformed the benchmark.

39. The method of claim 38, comprising:

establishing a portfolio value for the portfolio at a time when the investment position is entered;

using the portfolio value to establish the percentage gain and the percentage loss.

40. The method of claim 36, comprising generating the confidence score for each trade during each period of time of a plurality of periods of time.

41. The method of claim 27, wherein generating the rank score comprises generating a weighted average of the skill score, the persistence score and the confidence score.

42. The method of claim 41, wherein generating the rank score comprises:

forming a skill component by multiplying the skill score by a first weight;

forming a persistence component by multiplying the persistence score by a second weight;

forming a confidence component by multiplying the confidence score by a third weight;

calculating the rank score by summing the skill component, the persistence component and the confidence component.

43. The method of claim 26, comprising generating security ratings for securities held by the plurality of investors using the ranking and the investment data.

44. The method of claim 43, wherein the generating of the security ratings comprises:

identifying a set of investors corresponding to each investment position of a plurality of investment positions, wherein each investor of the set of investors owns the investment position;

for each set of investors, generating the rank score for each investor, the rank score categorizing the investors for a time period of a plurality of time periods;

for each set of investors, generating an average rank score for the period of time;

for each set of investors, generating a trailing rank score by averaging the rank scores across the plurality of periods of time;

generating a stock rating score for each investment position by combining the average rank score and the trailing rank score of the set of investors corresponding to the investment position.

45. The method of claim 43, wherein the first action comprises generating customized recommendations corresponding to the investment position in the at least one of the first portfolio and the first brokerage account of the first investor, the customized recommendations considering at least one of investment performance derived from the investment data, the rankings, and the security ratings.

46. The method of claim 1, wherein the investment data comprises data of current investment holdings, historical investment holdings, historical investment performance data, historical transactional data, and watch lists.

47. A method comprising:

electronically linking an investment platform to a plurality of investors, a plurality of brokerage accounts of the plurality of investors, and a plurality of portfolios of the plurality of investors, wherein a portfolio comprises at least one investment position;

sharing between the plurality of investors via the investment platform at least one of portfolio data of the plurality of portfolios and brokerage data of the plurality of brokerage accounts; and

automatically conducting operations involving at least one of the plurality of portfolios and the plurality of brokerage accounts in response to at least one of the portfolio data and the brokerage data.

48. A method comprising:

electronically linking an investment platform to a plurality of investors, a plurality of brokerage accounts of the plurality of investors, and a plurality of portfolios of the plurality of investors, wherein a portfolio comprises at least one investment position;

sharing between the plurality of investors via the investment platform at least one of portfolio data of the plurality of portfolios and brokerage data of the plurality of brokerage accounts; and

automatically conducting operations in at least one of the plurality of portfolios and the plurality of brokerage accounts in response to at least one of the portfolio data and the brokerage data.

49. An investment system comprising a processor and a plurality of couplings between the processor and a plurality of investors, a plurality of brokerage accounts of the plurality of investors, and a plurality of portfolios of the plurality of investors, wherein a portfolio comprises at least one investment position, the processor sharing at least one of portfolio data of the plurality of portfolios and brokerage data of the plurality of brokerage accounts among the plurality of investors the processor automatically conducting operations involving at least one of the plurality of portfolios and the plurality of brokerage accounts in response to at least one of the portfolio data and the brokerage data.

50. A system comprising a processor coupled to a trading application programming interface (API), wherein the trading API is coupled to portfolios and online brokerage accounts of a plurality of investors, the processor sharing between the plurality of investors via the electronic network at least one of investment data and brokerage data, wherein the investment data comprises data of the portfolios, wherein a portfolio comprises at least one investment position, wherein the brokerage data comprises data of the brokerage accounts, the trading API executing a first action involving an investment position in at least one of a first portfolio and a first brokerage account of a first investor of the plurality of investors, wherein the executing is in response to the at least one of the investment data and brokerage data indicating a second action taken in at least one of a second portfolio and a second brokerage account of at least one second investor of the plurality of investors.

51. The system of claim 50, wherein the trading API executing the first action comprises receiving an automatic notification of the second action taken in the second portfolio.

52. The system of claim 51, wherein the trading API executing the first action comprises, in response to the notification, presenting an action option to the first investor of taking the first action in the first portfolio.

53. The system of claim 51, wherein the trading API executing the first action comprises, in response to the notification, presenting an action option to the first investor of taking the first action in the first brokerage account.

54. The system of claim 51, wherein the trading API executing the first action comprises, in response to the notification, automatically taking the first action in the first portfolio.

55. The system of claim 51, wherein the trading API executing the first action comprises, in response to the notification, automatically taking the first action in the first brokerage account.

56. The system of claim 50, wherein the second action involves a second investment position that is equivalent to the first investment position.

57. The system of claim 50, wherein the second action involves a second investment position that is identical to the first investment position.

58. The system of claim 50, wherein the first action is equivalent to the second action.

59. The system of claim 50, wherein the first action is different than the second action.

60. The system of claim 50, wherein the first action is proportional to the second action.

61. The system of claim 50, wherein the first action is a trade involving the investment position.

62. The system of claim 61, wherein the executing comprises automatically issuing a command to a broker to initiate authentication of the trade, wherein the broker controls the brokerage account.

63. The system of claim 62, wherein the executing comprises automatically issuing a command to execute the trade.

64. The system of claim 63, wherein the executing comprises periodically issuing a command to check status of the trade.

65. The system of claim 64, wherein the executing comprises automatically issuing a notification message to the investor upon completion of the trade.

66. The system of claim 62, wherein the executing comprises automatically issuing a status message to the investor advising of status of the trade.

67. The system of claim 50, wherein the first action is a transaction option, wherein the transaction option includes at least one of a buy option and a sell option corresponding to an investment position.

68. The system of claim 50, wherein the first action is a transaction recommendation, wherein the transaction recommendation includes at least one of a buy recommendation and a sell recommendation corresponding to an investment position.

69. The system of claim 50, wherein the second action is change in a rating of the investment position.

70. The system of claim 50, wherein the second action is a change in value of the investment position.

71. The system of claim 50, wherein the second action is a trade involving the investment position.

72. The system of claim 50, comprising the processor aggregating the investment data of the portfolios and the online brokerage accounts.

73. The system of claim 50, comprising the processor aggregating the investment data of the portfolios.

74. The system of claim 73, comprising the processor aggregating the investment data to include data of the online brokerage accounts.