News Column

"Loss Risk Management across Multiple Venues" in Patent Application Approval Process

February 25, 2014



By a News Reporter-Staff News Editor at Journal of Mathematics -- A patent application by the inventors Phelan, Gerard (New York, NY); Loveless, Jacob (Boca Raton, FL), filed on March 7, 2013, was made available online on February 13, 2014, according to news reporting originating from Washington, D.C., by VerticalNews correspondents.

This patent application is assigned to Cfph, Llc.

The following quote was obtained by the news editors from the background information supplied by the inventors: "An entity may risk money (e.g., through a stock exchange by buying a financial instrument such as a security). Such risks may result in losses to the entity over time (e.g., by selling a security at a lower price than it was purchased).

BRIEF DESCRIPTION OF THE FIGURES

"FIG. 1 shows an example system that may be used in some embodiments.

"FIG. 2 shows an example method that may be performed in some embodiments."

In addition to the background information obtained for this patent application, VerticalNews journalists also obtained the inventors' summary information for this patent application: "The following should be understood to be embodiments, not claims.

"A. An apparatus comprising: a risk manager configured to: receive reports of trading activity of a plurality of trading entities from a plurality of trading venues, calculate losses of the trading entities over time based on the reports of trading activity, and report the losses to the plurality of trading venues in substantially real time; and a trading venue of the plurality of trading venues, in which the trading venue is configured to: compare an amount of reported losses of the trading entity to a threshold amount of losses allowed for the trading entity, in which the threshold amount of losses allowed is based on an amount of collateral from the trading entity held by one or more collateral holding entities, and halt trading by the trading entity if the amount of reported losses exceeds the threshold amount of losses.

"The apparatus of claim A, in which the trading entity includes a high frequency algorithmic trader. The apparatus of claim A, in which the threshold includes a plurality of thresholds that cover different amounts of time such that larger losses are allowed over larger time amounts. The apparatus of claim A, in which the trading entity includes a market maker and the one or more collateral holding entities includes clearing houses. The apparatus of claim A, in which the trading venue is configured to receive an indication that a collateral holding entity of the plurality of collateral holding entities has increase collateral held on behalf of the trading entity, and in response, allowing trading by the entity again.

"B. An apparatus comprising: a trading venue configured to: determine matches between orders for financial instruments and facilitate trading based on said matches; report trading activity of a plurality of trading entities through the trading venue to a risk manager; receive a report of losses of each of the plurality of trading entities that occur through trades at the trading venue and a plurality of other trading venues; compare an amount of reported losses of a trading entity of the plurality of trading entities to a threshold amount of losses allowed for the trading entity, in which the threshold amount of losses allowed is based on an amount of collateral from the trading entity held by one or more collateral holding entities, and halt trading by the trading entity if the amount of reported losses exceeds the threshold amount of losses.

"The apparatus of claim B, in which the trading venue is further configured to receive a report of collateral held on behalf of the trading venue for the one or more collateral holding entities, and calculate the threshold based on the amount.

"C. A computing device comprising: a processor; and a machine readable medium having stored thereon a plurality of instructions that when executed by the processor cause the apparatus to: receive reports of trading activity of a plurality of trading entities from a plurality of trading venues; calculate losses of the trading entities over time based on the reports of trading activity; and report the losses to the plurality of trading venues in substantially real time, in which a trading venue of the plurality of trading venues is configured to: compare an amount of reported losses of a trading entity to a threshold amount of losses allowed for the trading entity, in which the threshold amount of losses allowed is based on an amount of collateral from the trading entity held by one or more collateral holding entities; and halt trading by the trading entity if the amount of reported losses exceeds the threshold amount of losses.

"The apparatus of claim C, in which the trading entity includes a high frequency algorithmic trader. The apparatus of claim C, in which the threshold includes a plurality of thresholds that cover different amounts of time such that larger losses are allowed over larger time amounts. The apparatus of claim C, in which the trading entity includes a market maker and the one or more collateral holding entities includes clearing houses."

URL and more information on this patent application, see: Phelan, Gerard; Loveless, Jacob. Loss Risk Management across Multiple Venues. Filed March 7, 2013 and posted February 13, 2014. Patent URL: http://appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&u=%2Fnetahtml%2FPTO%2Fsearch-adv.html&r=1000&p=20&f=G&l=50&d=PG01&S1=20140206.PD.&OS=PD/20140206&RS=PD/20140206

Keywords for this news article include: Cfph Llc, Algorithms.

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Source: Journal of Mathematics


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