Patent ID: 7464052

Claim:
A method for managing portfolio risk on a computer system by a trader or investor for trading investment instruments in a real time trading environment to remain within determined risk-of-loss parameters, the method comprising: storing a plurality of parameters associated with an investment instrument held or to be held in a portfolio or an account on a computer-readable medium, the parameters including an identifier, a market price, a stop-loss price, and a number of shares or contracts held or to be held in the portfolio or the account; storing an equity value associated with the portfolio or the account; determining a point risk value of the instrument, the point risk value comprising an intermediate value multiplied by the number of shares or contracts, the intermediate value comprising the market price minus the stop-loss price for a long transaction or the market price plus the stop-loss price for a short transaction; determining a number of shares or contracts held or to be held in the portfolio or the account associated with the point risk value for a selected size risk value, the number determined by multiplying the selected size risk value by the equity value and dividing by the point risk value; repeating the step of determining a number of shares or contracts held or to be held in the portfolio or the account for a plurality of selected size risk values; and displaying a plurality of risk scenarios corresponding to the plurality of selected size risk values, the displaying step including displaying the number of shares or contracts held or to be held in the portfolio or the account corresponding to each of the plurality of size risk values.