Patent Publication Number: US-2010131398-A1

Title: System and method for providing market insight regarding securities trading

Description:
CROSS-REFERENCE TO RELATED APPLICATIONS 
     This application claims priority to U.S. Provisional Patent Application Ser. No. 61/038,335, the disclosure of which are incorporated herein by reference. 
    
    
     FIELD OF THE INVENTION 
     The present invention relates to a system and method for providing market insight regarding securities trading. 
     BACKGROUND OF THE INVENTION 
     A key component of the value of a securities exchange is the market information tools that it offers companies as a benefit of listing on that exchange. Currently, companies listed on an open-outcry exchange, such as the New York Stock Exchange (“NYSE”), may receive market insight from the exchange via a password-protected website, the specialists handling the company&#39;s securities on the floor of the exchange, or the exchange&#39;s client service representatives responsible for company accounts. 
     It may be desirable to have a market information service, or tool, that provides real-time market insight and color commentary regarding the trading of a company&#39;s stock and that of its peers. Such a service may use a sophisticated alert system, and may also include a team of market professionals, to provide alerts that include this information. 
     SUMMARY OF THE INVENTION 
     A system and method for generating alerts from exchange data and news data is disclosed, and includes an alert generator that further includes a processor coupled to a memory. The alert generator receives the exchange data and the news data. Alert generator software runs on the memory and processor, receives an alert profile, and compares the alert profile to the exchange data and the news data. An alert is created if the comparison indicates that a trigger has occurred. The alert includes information relating to the trigger, which may also include news stories relating to the trigger. 
     According to an embodiment of the invention, each listed company may create its own alert profile using an exchange&#39;s password-protected website. The user may select from a menu of alerts including one or more of: price and volume thresholds; pre-market activity; industry movers; economic news; research ratings; movement in commodity prices; and technical trading. One aspect of this embodiment of the alert system is the mapping of news to the movement of price and volume. Such an alert may have a quantitative comment (price movement) and a qualitative description (analyst changes rating on stock or sentiment on sector). 
     Embodiments of the alert generator of this invention may mine market data feeds from all markets (NYSE, Nasdaq, Nasdaq Trade Reporting Facility (“TRF”), Electronic Communication Networks (“ECNs”), and regional exchanges). In addition to the news, the alert may also provide insight regarding buying or selling patterns. For example, an alert may state Company ABC reached a new 52 week high and include the top five brokers for the day on an exchange, such as the NYSE. The alert generator may have access to data from the exchange in order to mine the market data, as well as a consolidated view of activity from all markets. Such an alert is referred to herein as a Market Access Center (“MAC”) alert. 
     Alert data may be sent to a MAC Analyst who may be an experienced market professional with a thorough understating of trading. The analyst reacts to calls related to the alerts and also proactively contacts companies in anticipation of market moving events. For example, an analyst would contact financial services companies in anticipation of a movement by the Federal Reserve. Interpretation of market moving events maybe an important role of such an analyst. 
     The analyst may have access to a dashboard or data base display that combines a contact management system with a robust market data site. This resource may serve as the basis for initial contact with the listed company. In addition, the analyst may have access to all the data sources used in creating the alerts. This will help the analyst respond to inquiries and serve as a resource for proactive outreach. 
    
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
       Features and other aspects of embodiments of the present invention are explained in the following description taking in conjunction with the accompanying drawings, wherein: 
         FIG. 1  illustrates an embodiment of a market insight alert generator in accordance with the principles of the method and system of the present disclosure; 
         FIG. 2  illustrates a flowchart embodying a market insight alert generation method in accordance with the principles of the method and system of the present disclosure; and 
         FIG. 3  illustrates an alert dashboard display in accordance with the principles of the method and system of the present disclosure. 
     
    
    
     DETAILED DESCRIPTION 
     Various embodiments of the present invention will now be described in greater detail with reference to the drawings. 
       FIG. 1  illustrates an embodiment of an alert generator system of the present disclosure. Data from one or more exchange data sources  101  and one or more news data sources  102  are communicated to alert generator  103 . Alert Generator  103  may be a server having a processor  104  and a memory  105  adapted to run Alert Generator software (not shown) for generating alerts from the data received from exchange data sources  101  and news data sources  102  in accordance with preferences and settings associated with a user&#39;s alert profile. Alerts generated by Alert Generator  103  are communicated to an exchange data storage memory  106 , as well as communicated through the internet  107  to alert receiving devices  108   a ,  108   b . An alert receiving device may be a full-screen device  108   a  or PDA  108   b . Users may set preferences by communicating from alert receiving devices  108   a ,  108   b  through the internet  107 , to Alert Generator  103 , which is also adapted to run Alert Profile Interface software (not shown). Alert Generator software and Alert Profile Interface software, along with any other software embodying aspects of the system and method of the present disclosure, may be stored on any computer readable medium including any optical, magnetic, or electrical storage medium, including computer memory, ROM, RAM, hard drive, flash memory, CD, or DVD storage. 
     Alert Profile Interface 
     Embodiments of this invention may include an Alert Profile Interface, web-based interface software enabling the user to select from a menu of data items that will serve as the user&#39;s alert profile. The user may be a representative of the issuer of a listed security, such as the Chief Financial Officer or Investor Relations officer, or another individual or entity authorized to receive alerts from the alert generator. Each user may have an individual profile. 
     The user&#39;s profile and any corresponding entitlement information may be accessed via the exchange&#39;s password-protected website. Security and access authorization may be performed authenticating the user by a User ID and password. The listed company or other entity associated with the user may be identified by the issuer name, company name, phone number, and email address. 
     The user&#39;s profile may be customized to indicate an industry associated with the issuer of the relevant security. The industry may be allocated by the Alert Generator, or the user may accept or select from a menu of industries. The Alert Profile Interface may capture data associated with the relevant securities (for example, through the use of ticker symbols) of the issuer&#39;s peer companies. Preferable, five peer companies&#39; data would be captured. 
     The user&#39;s profile may include preferences both on the types of alerts requested as well as preferences for thresholds (percentage or absolute changes) for alerts based on price or volume, or other data points with similar characteristics, relating to the relevant issuer&#39;s securities. The Alert Profile Interface may allow the user to select from a list of available alert types, and capture any thresholds set by the user. 
     Similarly, the user&#39;s profile may include preferences both on the types of alerts requested as well as preferences for thresholds (as discussed above) for the securities of the peer companies of the issuer, identified as part of the issuer&#39;s industry preferences. Again, the Alert Profile Interface may allow the user to select from a list of available alert types, and capture any thresholds set by the user. 
     The user&#39;s profile may also include preferences regarding news driven alerts. The user may be able to select from a menu of qualitative events, for example an analyst rating change, or an action by the U.S. Federal Reserve System. 
     For all alert types, the user&#39;s profile may allow the user to set rankings, such as “high,” “medium,” or “low,” to each alert type. 
     The user may also be able to select from various delivery options. For example, the user may be able to select an alert notification format, such as one adapted to be displayed on a device having full size terminal screen  108   a , or one adapted to be displayed on a PDA  108   b . As another example, the user may be able to select a particular medium or telecommunication protocol for transmission of the alert, such as a PDA-based protocol, email, or SMS. 
     The Alert Profile Interface software may be hosted on alert generator server  103 . The alert generator  103  creates and stores access and entitlement records of the individuals or other entities that have requested alerts and communicates these records to the exchange data center  106 . Preferably, the Alert Profile Interface display, or front end, has the look and feel of other user interfaces of the listing exchange. It is also preferable that the Alert Profile Interface be scalable to accommodate 1600 listed U.S. companies and 400 listed non-U.S. companies. 
     Data Sources 
     Proprietary content of the listing exchange, such as the NYSE, may be an important component of the market insight in the alert. As such, the Alert Generator  103  may take a data feed  101  from the listing exchange for certain components of the market information pool including short volume, block volume, and broker volume. Other market data sources  101  may include the Nasdaq Market, Nasdaq TRF, ECNs, and Regional Exchanges. News data sources  102  may include sources of general market news and economic news, which may be made up of primary and secondary news sources as well as market commentary. Other data sources may also be included. Research data may include analyst recommendations. Commodities data may include the pricing of energy and precious metals. 
     Alert Generator and Alert Examples 
     The Alert Generator engine, or mechanism, generates a complex alert by using mapping logic to correlate an alert to underlying news, trading activities, and/or market sentiment. 
     When an alert condition is reached, it triggers the sending of an alert email or other message to the user. The alert may contain quantitative and/or qualitative information. As an example of quantitative information (or remark) included as part of an alert, the stock of Company ABC (a semiconductor company) increases 20% from the previous night&#39;s close of $20/share, reaching a price of $22/share. As an example of qualitative information (or remark) included as part of an alert, news stories indicate that semiconductor stocks have risen based on a report citing an increase in personal computer demand. Price movement information may be mapped either to the primary market or the consolidated tape. 
     Users receiving the alert may be one or more of the issuer or its representative, a client service manager at the exchange responsible for the user&#39;s account, a MAC analyst, and a specialist. 
     As discussed above, according to one embodiment of the present disclosure, the user may define preferences to adjust the triggering of an alert. The user may set limits or thresholds against any current or historical market data point, with the potential to create multiple “if-then” scenarios relating to that data. 
     For example, Company XYZ typically trades 50,000 shares pre-market. The user sets a threshold at 60,000. On June 1, the pre-market trading volume in XYZ stock is 100,000 shares. Because the pre-market activity exceeds the threshold, an alert is triggered. The system searches (or sweeps) news data services for related stories, such as those relating to Company XYZ, its industry, or the day&#39;s pre-market activity. An alert is sent to the user with total shares traded and associated news. 
     For qualitative events, the Alert Generator sweeps or searches news services for listed company or peer related news. For example, a qualitative alert may be triggered by a peer&#39;s earnings release announcement. 
     Table 1 lists representative alerts types associated with trading activity that may be generated by the alert generator of the present disclosure. Table 2 lists representative alerts types associated with news releases that may be generated by the alert generator of the present disclosure. Table 3 lists representative alert types associated with rating changes, analysis, and asset classes, that may be generated by the Alert Generator of the present disclosure. Each alert type may be associated with a high (“H”), medium (“M”), or low (“L”) ranking in accordance with the user&#39;s alert profile. 
     
       
         
           
               
               
               
               
             
               
                 TABLE 1 
               
               
                   
               
               
                 Alert 
                 Ranking 
                 Alert Types 
                 Description 
               
               
                   
               
             
            
               
                 Trading 
                 H 
                 Pre-Market Off 
                 News associated with trading 
               
               
                   
                   
                 Board Trading 
                 activity. Threshold may be 
               
               
                   
                   
                   
                 related to historical pre-market 
               
               
                   
                   
                   
                 activity. 
               
               
                   
                 H 
                 Delayed Opening 
                 Explanation for delay. If 
               
               
                   
                   
                   
                 appropriate, provide context 
               
               
                   
                   
                   
                 vis-a-vis the broader market 
               
               
                   
                 H 
                 Imbalance - Market 
                 Number of shares and price 
               
               
                   
                   
                 Opening 
               
               
                   
                 H 
                 Trading Halts 
                 Halts for listed company and its 
               
               
                   
                   
                   
                 listed peer companies 
               
               
                   
                 H 
                 Imbalance - Market 
                 Orders on Closing Price 
               
               
                   
                   
                 on Close (MOC) 
               
               
                   
                   
                 Orders 
               
               
                   
                 H 
                 Price Percentage 
                 Price analysis 
               
               
                   
                   
                 Moves vs. 52 week 
               
               
                   
                   
                 range 
               
               
                   
                 H 
                 Volume Percentage 
                 Volume analysis 
               
               
                   
                   
                 Moves vs. 52 week 
               
               
                   
                   
                 range 
               
               
                   
                 H 
                 Block Volume 
                 Size and broker block volume 
               
               
                   
                   
                   
                 (from, for example, NYSE 
               
               
                   
                   
                   
                 data source) 
               
               
                   
                 H 
                 Block volume - Off 
                 Size and block volume, with 
               
               
                   
                   
                 Board 
                 broker attribution (from for 
               
               
                   
                   
                   
                 example, non-NYSE sources 
               
               
                   
                   
                   
                 such as Nasdaq, ECN, or 
               
               
                   
                   
                   
                 regional market data) 
               
               
                   
                 H 
                 NYSE Short 
                 Daily short volume 
               
               
                   
                   
                 Volume vs. historic 
               
               
                   
                   
                 norm 
               
               
                   
                 H 
                 Shareholder 
                 Name of institution buying/ 
               
               
                   
                   
                 identification 
                 selling stock 
               
               
                   
                 H 
                 13 D/G/F Filing 
                 Name of institution filing SEC 
               
               
                   
                   
                 Announcements 
                 document 
               
               
                   
                 M 
                 Active brokers, 
                 Example: UBS upgrades 
               
               
                   
                   
                 block and short 
                 Company EFG and stock moves 
               
               
                   
                   
                 volume included in 
                 10%. Alert is released at 
               
               
                   
                   
                 certain alerts 
                 11:30 a.m. Included in the alert 
               
               
                   
                   
                   
                 is the volume traded, short 
               
               
                   
                   
                   
                 volume, and block volume on 
               
               
                   
                   
                   
                 the exchange. 
               
               
                   
               
            
           
         
       
     
     
       
         
           
               
               
               
               
             
               
                 TABLE 2 
               
               
                   
               
               
                 Alert 
                 Ranking 
                 Alert Types 
                 Description 
               
               
                   
               
             
            
               
                 News 
                 H 
                 M &amp; A Activity 
                 Peer news 
               
               
                 Releases 
                 M 
                 Earnings 
                 Peer news 
               
               
                   
                   
                 Announcements 
               
               
                   
                 M 
                 Earnings Relative 
                 Company and Peer news 
               
               
                   
                   
                 News 
               
               
                   
                 M 
                 General Economic 
                 Foe example: Fed News, 
               
               
                   
                   
                 News 
                 Treasury, Unemployment 
               
               
                   
                   
                   
                 Data, Beige Book 
               
               
                   
                 H 
                 Commodity Driven 
                 Prices for precious metals and 
               
               
                   
                   
                   
                 energy related commodities 
               
               
                   
                 M 
                 Addition to/Drop 
                 Company and Peer 
               
               
                   
                   
                 from Index 
               
               
                   
                 L 
                 Business News, 
                 Peer news 
               
               
                   
                   
                 Innovation, Product 
               
               
                   
                   
                 Launches, etc 
               
               
                   
                 L 
                 Leadership 
                 Peer news 
               
               
                   
                   
                 Changes 
               
               
                   
               
            
           
         
       
     
     
       
         
           
               
               
               
               
             
               
                 TABLE 3 
               
               
                   
               
               
                 Alert 
                 Ranking 
                 Alert Types 
                 Description 
               
               
                   
               
             
            
               
                 Rating 
                 H 
                 Sell side research 
                 Initiation of coverage by 
               
               
                 Changes 
                   
                 coverage 
                 sell-side; rating changes 
               
               
                 Analysis 
                 H 
                 Technical Charting 
                 Alert is triggered when stock 
               
               
                   
                   
                 Analysis 
                 reaches support or resistance 
               
               
                   
                   
                   
                 threshold. Qualitative com- 
               
               
                   
                   
                   
                 mentary should accompany 
               
               
                   
                   
                   
                 the alert. 
               
               
                   
                 L 
                 Program Trading 
                 Secondary Information used 
               
               
                   
                   
                   
                 by the MAC for color 
               
               
                   
                   
                   
                 commentary 
               
               
                 Asset 
                 M 
                 Options 
                 Trading analysis, Put/Call 
               
               
                 Classes 
                   
                   
                 Ratios 
               
               
                   
                 M 
                 Derivatives 
                 Indicator of Market activity 
               
               
                   
               
            
           
         
       
     
     Alert Generation Method 
       FIG. 2  is a flowchart illustrating an embodiment of an alert generation method in accordance with the present disclosure. The user logs in to a password-protected website of an exchange,  201 . The user then has access to the Alert Profile Interface software,  202 . The user may input, or the Alert Profile Interface software determines, the listed company associated with the user,  203 . The Alert Profile Interface software determines, or the user selects, an industry associated with the listed company,  204 . The Alert Profile Interface software determines, or the user selects, one or mote peer companies associated with the listed company,  205 . 
     The user selects alert types for both the listed security and for the securities of peer companies,  206 . The user selects thresholds for alerts based on quantitative information,  207 . The user selects events for qualitative alerts,  208 . The user selects an alert notification format,  209 , and alert telecommunication protocol,  210 . The Alert Profile Interface software creates a user profile,  211 , and feeds it to the Alert Generator software,  212 . 
     Data from exchanges is fed to the Alert Generator,  213 , and news data is also fed to the Alert Generator,  214 . The Alert Generator software compares the thresholds for the quantitative alert types to the exchange data,  215 , and compares the events for the qualitative alert types to the news data,  216 . 
     If a threshold for a quantitative alert type are triggered,  217 , the Alert Generator software searches the news data for stories related to the quantitative alert type,  218 . The Alert Generator software then creates an alert containing the quantitative and related news,  219  and sends the alert to the user,  220 , sends the alert to storage,  221 , and updates the dashboard,  222 . Similarly, if an event for a qualitative alert is triggered,  223 , the Alert Generator software searches the news data for stories related to the qualitative alert type,  224 . The Alert Generator software then creates an alert containing the qualitative event and related news,  225 , and sends the alert to the user,  220 , sends the alert to storage,  221 , and updates the dashboard,  222 . The Alert Generator continues to compare the alert profile to the exchange data and news data sources so alerts are generated in real time. 
     Alert Dashboard Display 
     In accordance with a further embodiment of the present disclosure, the Alert Generator software may also generate an Alert Support Dashboard display. The Alert Support Dashboard may serve as a contact management tool and market data source for a MAC analyst or other authorized users. The Dashboard may be the first line of support for research and analysis for the analyst and client service manager. There may be other data sources that complement the alert system and associated dashboard display. 
       FIG. 3  illustrates an Alert Support Dashboard display  301  in accordance with the principles of the method and system of the present disclosure. 
     The Issuer Data portion  302  of the Dashboard may allow the user to access one or more of: a historical file of the issuer&#39;s alerts; the issuer&#39;s alert profile settings; and the name and descriptive profile for the issuer&#39;s company representatives. The issuer data portion  302  of the dashboard may also allow the user to input notes related to the issuer. 
     The Productivity Measurement portion  303  of the Dashboard may allow the user to view one or more of the number of calls received, the number of alerts sent, the number of companies receiving alerts, the number of companies requesting alerts, as well as the number of inquires opened, pending, and closed. 
     The Trading Information portion  304  of the Dashboard may display trading information for issuer securities listed on both the listing exchange (such as the NYSE) and other exchanges. This information may include one or more of: the real time price performance for the listed company and its peers; the current day and intra-day price and volume; the previous day close and volume; pre-market opening data; a 30, 60, or 90 day look-back; the 52 week high and low; and technical trading and charting information. 
     The News portion  305  of the Dashboard may provide a comprehensive news service display, including news stories relating to the listed company, its peers, and the industry, as well as general market news, economic news, and commodity news. 
     In a preferred embodiment, the authorized users of the Dashboard include up to 3 MAC analysts and up to 50 client service managers. User access to the Dashboard may be through the exchange&#39;s password-protected website. 
     A user of the Dashboard, such as a MAC analyst, may respond to inquiries from recipients of an alert, such as an issuer&#39;s representative. As another example, a MAC analyst or other dashboard user may proactively call an issuer when there is aberrant market activity for the company or its peers, or there is general market news (for example, major market indices reach new high or low). 
     Although illustrative embodiments have been shown and described herein in detail, it should be noted and will be appreciated by those skilled in the art that there may be numerous variations and other embodiments that may be equivalent to those explicitly shown and described. For example, the scope of the present invention is not necessarily limited in all cases to execution of the aforementioned steps in the order discussed. Unless otherwise specifically stated, terms and expressions have been used herein as terms of description, not of limitation. Accordingly, the invention is not to be limited by the specific illustrated and described embodiments (or the terms or expressions used to describe them) but only by the scope of claims.