Electronic Platform for Transparent Structured Product Trading
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Solution Overview
Problem
Investors and financial advisors shy away from structured products due to a lack of understanding, lack of liquidity, and lack of transparency in pricing, making it difficult to effectively utilize these products for portfolio diversification.
Innovation Solution
An integrated electronic platform that generates customized structured investment products using real-time market data and client-specific data, provides education and certification, and facilitates trading and performance monitoring through a product generation, education, and exchange system.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If structured products are made more complex to provide portfolio diversification and potential returns, then investment capability is improved, but ease of operation deteriorates due to lack of understanding
Solution Approach 1:
The patent introduces an electronic platform as an intermediary between investors and structured products. This platform provides education modules, certification processes, and product generation tools that mediate the complex interaction between investors and structured products, making them more accessible while maintaining investment capability
Solution Approach 2:
The patent segments the structured product into educational components, certification components, and trading components through the electronic platform. This segmentation allows investors to progressively engage with structured products through education and certification before actual trading, reducing the perceived complexity
2Ease of operation
If structured products are made more transparent in pricing and structure, then ease of operation is improved, but device complexity increases due to detailed information requirements
Solution Approach 1:
The electronic platform enables self-service through automated product generation, pricing calculations, and educational materials. The system automatically provides transparent pricing and structure information without requiring complex manual analysis, achieving transparency while managing complexity through automation
Solution Approach 2:
The patent replaces manual analysis and understanding of complex structured products with an electronic system that automatically generates, prices, and explains product structures. This substitution of mechanical human analysis with electronic computation provides transparency without proportionally increasing perceived complexity for users
3Reliability
If certification and education requirements are implemented, then reliability is improved through better understanding, but productivity deteriorates due to additional time requirements
Solution Approach 1:
The patent implements preliminary education and certification actions before trading occurs. The electronic platform provides education modules and certification processes that prepare investors in advance, ensuring reliability through better understanding while allowing efficient trading once certified
Solution Approach 2:
The electronic platform serves multiple functions including education, certification, product generation, and trading execution. This multi-functionality consolidates what would otherwise be separate processes into a single integrated system, improving reliability through comprehensive education while maintaining productivity through streamlined operations
Data Source
AI summary
Example embodiments of the present invention are directed to an integrated system and methods performed thereon for identifying customized structured investment products, certifying users to use and sell such customized structured products, selling and trading such customized structured products, and monitoring the performance of the customized structured products. The customized structured products are built from real time market data, client specific data, and/or performance metrics of other customized structured products.