Patent ID: 8335732

Claim:
A method for pricing securities such as stocks, bonds, and related indices, composites, or derivative instruments using a general-purpose computer and one or more processors comprising: a. collecting and storing input data including historical data and optional projected data related to one or more securities; b. implementing a security pricing tool by said processor based on a security pricing model; c. computing by said processor a plurality of scenario prices and price indicators utilizing said input data for a plurality of time horizons for one or more securities as a function of a change in one or more factors affecting a security's price (P) from a group comprising of earnings per share (EPS), price to earnings (PE) ratio, or combinations and variations thereof, using the price equation P=EPS*PE and its partial differential form: Δ P= ΔEPS*PE 0 +EPS 0 *ΔPE wherein ΔP is the expected price change, ΔEPS and ΔPE are measured, estimated, or projected change in earnings per share and price to earnings ratio, and EPS 0 and PE 0 are starting values for earnings per share and price to earnings ratio for an initial price point (P 0 ), wherein a target price is computed by adding said expected price change to said initial price, using the equation: P T =P 0 +ΔP d. computing by said processor a Divergence indicator for a plurality of time horizons as a ratio of the target price spread ΔP T over the observed market price at elapsed time t, using the equation: Divergence ⁢ ⁢ ( t ) = Δ ⁢ P T P wherein ΔP T =P T −P, with P T as said target price and P as the market price at elapsed time t, where Divergence represents the expected gain/loss opportunity for a security; e. computing by said processor a Velocity indicator for a plurality of time horizons, using the equation: Velocity ⁢ ⁢ ( t ) = ± 2 ⁢  Δ ⁢ P T  P wherein vertical bars represent an absolute value of said target price spread at elapsed time t, and the direction of movement is indicated with a choice of sign, where Velocity represents the anticipated direction and speed of price movement; f. displaying saving, or retrieving one or more said security prices and price indicators via a provided user or client system interface.