Systems and methods for providing investment opportunities

Abstract

The invention relates to methods and systems for providing investment competitions. In one aspect, trading algorithms that automatically generate trading instructions in response to market data are developed by and received from a distributed plurality of independent trading algorithm developers. The algorithms are periodically executed against market data and generate trading instructions, which, based on an association of investment accounts with the trading algorithms, initiate correlative trades in the investments accounts.

Description

CROSS-REFERENCE TO RELATED APPLICATIONS [0001] This application is a continuation of U.S. patent application Ser. No. 11 / 498,526, entitled “Systems and Methods for Providing Investment Opportunities” filed on Aug. 3, 2006, and claims priority to U.S. provisional patent application Ser. Nos. 60 / 708,570, filed Aug. 16, 2005, and 60 / 786,406, filed Mar. 27, 2006, the entire disclosures of which are incorporated herein by reference.TECHNICAL FIELD [0002] This invention relates to computer-based methods and systems for investing and, more particularly, to methods and systems for providing investment opportunities to individual and other non-institutional investors. BACKGROUND [0003] Investors have long struggled with the problem of how they should invest their savings. The public securities markets allow investors to buy and sell securities, but in the past the general public generally has been at a disadvantage to professional brokers and securities traders, in that individuals and other...

AI Technical Summary

Benefits of technology

[0007] Many individuals with backgrounds in computer science, math, and similar fields that are traditionally outside of the realm of the financial services industry often experiment with quantitative investment strategies using various algorithms, optimization techniques, and statistical theories. Some of these individual investors may even outperform the so-called “professional money managers” due at least in part to better investment decisions and reduced expenses. The intellectual challenge and personal satisfaction from “beating the street” provide further impetus and to continue to hone these investment strategies.

[0010] In a first aspect, the invention relates to a method for initiating trades in an investment account that includes administering trading qualification events among a group of traders, and based, for example, on the results of the events, selecting some of the traders as portfolio managers and allocating money to the portfolio managers, based, for example, on the portfolio managers' individual trading strategies. The method also includes distributing information regarding the portfolio managers and their investment strategies to investors (e.g., individual investors and / or groups of investors) and facilitating the investors' selection of portfolio managers. Trade instructions are received from the portfolio managers, and correlative trade instructions are initiated in investment accounts associated with the investors.

[0024] In another aspect, the invention provides a method for providing a trading algorithm competition including facilitating the development of trading algorithms for generating trading instructions in response to market data by algorithm developers, running a subset of the developed algorithms for a predetermined time period using market data as input to the algorithms, evaluating the performance of the algorithms for a predetermined period of time and publishing the results of the evaluation.

Problems solved by technology

Further, there is believed to be an untapped community of individuals who possess the technical ability to build and operate quantitative models that attempt to predict market behavior.

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