WO2014115013A1 - System and method for digitally tradable equity investment competition - Google Patents

Abstract

The invention comprises systems and methods for simulated Digitally Tradable Equity market participation, in the form of a participatory game. Players compete against one another in an attempt to achieve best results, reach a certain target first, or the like. In parallel, sums proportional to those in the game may be trade in the real market, adding an element of live action to the game.

Description

SYSTEM AND METHOD FOR DIGITALLY TRADABLE EQUITY

INVESTMENT COMPETITION

BACKGROUND

Technical Field

[0001] Embodiments of the present invention relate generally to systems and methods for a Digitally Tradable Equity trading activity, including real and 'virtual' components each possibly leading to real reward.

Description of Related Art

[0002] The securities market (Digitally Tradable Equity, or currency market) is one of many forms of decentralized global trade. A wide range of different types of buyers and sellers act as endpoints for trading. Trading is based on utilizing the shifting relative values of different securities in the global market.

[0003] For example, The Digitally Tradable Equity market enables conversion of foreign currency and as such helps international trade and investment. For example, in the United States the Digitally Tradable Equity trade permits import of goods from EU member states, using United States dollars. The value of the currencies directly supports speculation and trade, based on such factors as the interest rate differential between the two currencies on speculation.

[0004] A typical foreign exchange transaction has a party pay a certain amount of one currency to another party in a given currency to purchase certain amounts of another currency. Modern government restrictions on foreign exchange market foreign exchange transactions are based on the Bretton Woods system of monetary management after World War II, wherein the world's leading industrial states established the rules for commercial and financial relations between.

[0005] The foreign exchange market is unique due several characteristics. It has the highest liquidity on a huge trading volume representing the world's largest asset class; it has great geographical dispersion; it is characterized by nearly continuous operation; has a wide variety of factors that affect exchange rates; compared with other markets offers fixed income relative benefits of low margins, and leverage to enhance profit and loss margins with respect to account size and use.

[0006] As such, it is used as a means of currency intervention by central banks in the market as the closest instrument to the ideal of perfect competition. According to the Bank for International Settlements, as of April 2010, the average daily turnover in global foreign exchange market hit $ 3.98 trillion. Some firms specializing on foreign exchange market average daily turnover in excess of U.S. $ 4 trillion.

[0007] Merchant banks, central banks, institutional investors, currency speculators, corporations, governments, other financial institutions, and retail investors are involved. Average daily turnover in global foreign exchange and related markets is continuously growing.

[0008] The United Kingdom accounted for 36.7% of total trading. Business in the United States accounted for 17.9%, and Japan accounted for 6.2%.

[0009] A diverse selection of execution venues and the development of electronic execution of transaction costs, increased market liquidity, reduced and attracted greater participation from many customer types. In particular, electronic trading via online portal to make it easier for retail traders to trade in the Digitally Tradable Equity market has been made. By 2010, retail trade turnover of spot 10%, or $ 150 billion per is estimated to account for over-the-counter foreign exchange market where brokers / dealers negotiate directly with one another, so there is no central exchange or clearing house.

[0010] The biggest trading center is in London, which, according to estimates increased its share from 34.6% in April 2007 to 36.7% of global Digitally Tradable Equity trade in April 2010. Due to London's dominance in the market, a particular currency's quoted price is usually the London market price. For example, when the IMF SDR's value is calculated every day, in the afternoon they use the London market prices.

[0011] Given the increasing popularity of the Digitally Tradable Equity market, an improved method for a Digitally Tradable Equity investment competition is a long felt need. BRIEF SUMMARY

[0012] An aspect of the present invention provides a Digitally Tradable Equity trading competition comprising: an online server adapted to receive, send and store information concerning user accounts, trades, and Digitally Tradable Equity data; a plurality of clients adapted to issue transaction orders to said server and receive data therefrom; wherein a virtual competition between clients is performed in parallel with actual trades in Digitally Tradable Equity markets, providing a combined virtual and actual trading competition.

[0013] It is further within provision of the invention to provide a method for Digitally Tradable Equity trading competition comprising steps of: registering a number of players for a competition; charging registration fees from said players; defining a competition type; facilitating trading by said players in some combination of actual and virtual Digitally Tradable Equity markets; deciding a winner to said competition based on competition type.

[0014] It is further within provision of the invention wherein said competition type is selected from the group consisting of: time-based competition; earning-based competition; goal-based competition; ratings based competition; turn based competition; leveraged competitions; and combinations thereof.

[0015] It is further within provision of the invention wherein a predetermined amount of said registration fees are collected by the competition organizers and the remainder are distributed as a playing pot.

[0016] It is further within provision of the invention wherein said a predetermined fraction of said playing pot is invested in actual Digitally Tradable Equity markets and a complementary fraction is invested in virtual markets.

[0017] It is further within provision of the invention wherein said virtual markets comprise markets created using data from said players' trades. [0018] It is further within provision of the invention wherein said step of deciding winners is based upon a combination of performance characteristics selected from said actual markets and said virtual markets.

[0019] It is further within provision of the invention wherein said trades are selected from the group consisting of: Buy long, Buy short, (full or partial) close transaction, Buy (long) or buy limit, Buy (long) or buy stop, buy (short) or sell stop, buy (short) or sell stop, Buy (short) or Sell Limit, puts, calls, transfers, buys, sells.

[0020] It is further within provision of the invention wherein said trading is performed using market data selected from the group consisting of: simulated market data; real-time market data; historical market data; virtual market data.

[0021] It is further within provision of the invention providing access to player personal information selected from the group consisting of: updateable personal information; amount of money in account; deposit and withdrawals; trade history; win and loss history; relative positions; rating and location.

[0022] These, additional, and/or other aspects and/or advantages of the present invention are: set forth in the detailed description which follows; possibly inferable from the detailed description; and/or learnable by practice of the present invention.

BRIEF DESCRIPTION OF THE DRAWINGS

[0023] In order to understand the invention and to see how it may be implemented in practice, a plurality of embodiments will now be described, by way of non-limiting example only, with reference to the accompanying drawings, in which:

FIG. 1 illustrates a graph of the Digitally Tradable Equity markets of the invention;

FIG. 2 also illustrates a graph of the Digitally Tradable Equity markets of the invention; FIG. 3 illustrates yet another graph of the Digitally Tradable Equity markets of the invention.

FIG. 4 is a flow chart in accordance with one particular embodiment of the invention.

DETAILED DESCRIPTION

[0024] The following description is provided, alongside all chapters of the present invention, so as to enable any person skilled in the art to make use of said invention and sets forth the best modes contemplated by the inventor of carrying out this invention. Various modifications, however, will remain apparent to those skilled in the art, since the generic principles of the present invention have been defined specifically to provide a means and method for providing a system and method for Digitally Tradable Equity gaming providing interaction with the real Digitally Tradable Equity market.

[0025] In the following detailed description, numerous specific details are set forth in order to provide a thorough understanding of embodiments of the present invention. However, those skilled in the art will understand that such embodiments may be practiced without these specific details. To justly and entirely describe renditions of each embodiment may not yield full reportage of underlying concepts. Thus we may generally articulate that not all embodiments are necessarily described herein, but that the concepts underlying the invention are fully disclosed.

[0026] Reference throughout this specification to "one embodiment" or "an embodiment" means that a particular feature, structure, or characteristic described in connection with the embodiment is included in at least one embodiment of the invention.

[0027] The term 'plurality' refers hereinafter to any positive integer (e.g, 1,5, or 10).

[0028] The term 'Digitally Tradable Equity' refers hereinafter to securities (financial properties or assets) including Currency Trading (Forex), Indices, Commodities, CFDs, Stocks, Bonds, Options and Futures on all of the above. [0029] The term 'Trading houses' refers hereinafter to actual tradeing houses as well as banks, brokers, ECNs, investment houses and other financial establishments.

[0030] The inventive system and method comprise a Competitive Trading (CT) platform enabling individuals from around the world to compete with each other in online trading of marketable Digitally Tradable Equity.

[0031] The invention comprises systems and methods for simulated Digitally Tradable Equity market participation, in the form of a participatory game. Players compete against one another or against the computer in an attempt to achieve best results, reach a certain target first, or the like. In parallel, sums proportional to those in the game may be traded in the real market, adding an element of live action to the game.

[0032] There are at least three possible income sources for the inventive system and method: 1) all registration fees have a premium deducted, this being a fixed amount or percentage taken from the competition registration fee; and 2) the platform will work out a fee arrangement such as percentage or fixed fee with the various trading houses involved in operation of the invention, the trading houses then transferring some fraction of the margin trading revenue coming from the additional clients provided by the invention operators to the trading houses; 3) advertisement on the online sections of the inventive method and system.

[0033] In one embodiment of the invention a series of steps is followed as in the following example:

[0034] First, each player receives an amount of virtual money to his or her virtual account.

[0035] Each player then allocates money for the competition, using some combination of their account balance and money borrowed on margin.

[0036] Transactions may be conducted using a default size of one share, and leverages, for example of 1:100.

[0037] If a competitor decides to 'delete' or withdraw the amount allocated to the game, he loses the round and forfeits the entrance fee. Platform content

[0038] A front-end is provided, comprising a website or mobile / tablet app with a list of assets (these being the tools of commerce of the game) available for use. This front end further delivers quotes and / or graphs, in realtime, simulated, or otherwise, for all assets available. A UI is provided that allows input of transactions of all kinds (sell, buy, long/short, close position (full/partial), buy stop, buy limit, sell stop, sell limit, stop loss, trailing stop, etc.)

[0039] A given player can join any of a number of competitions; a list is provided of all competitions a player is involved in. To allow for joining competitions, a list is provided showing the available competitions. There is also a possibility of setting up a new competition, as well as provision for inviting other players.

[0040] A set of competition indicators is provided showing inter alia location, time end, distance from target, and the like.

[0041] It is within provision of the invention that a basic social network be provided as well, including for instance provision for chat, internal e-mail, forums, and the like.

[0042] A page presenting personal information and parameters is also within provision of the invention, comprising inter alia:

i. Updateable personal information

ii. Amount of money in account

iii. Deposits and Withdrawals

iv. Historical Trades

v. Historical wins and losses

vi. Relative position

vii. Rating and Location

Back-end [0043] It is within provision of the invention to provide an identification and management system for users. Furthermore a credit clearing system may be implemented. A monitoring, control and analysis module may also be provided comprising several sub-elements: i. Client Activity Monitoring System database ii. Online Support System iii. CRM System iv. Automated and ad-hoc analysis of user actions

[0044] An interface to the company's accounting system may further be provided for purposes of transaction facilitation. A user's rating system may also be supplied allowing for users to rate and comment upon different aspects of the system.

[0045] Transmission of the system of transactions to various trading houses may further be provided in certain embodiments consistent with the invention.

Broadcast of transactions

[0046] Provision is made for broadcast of certain transactions to some subset of users. A trader who has an account in one of the recognized trading houses in action can connect his activities to the CT system trading account.

[0047] With the establishment of the account (and at any other point) a user can give his trading account detail for use with the system.

[0048] This option is marked by default to be enabled.

[0049] Required information for establishment of this type of account are the trading house name, account number, password, and default size of leverage. All trades will be for a predetermined number of shares. It may be required to establish a Master, Account management agreement between the platform and the custmer [0050] All transactions mark with this option will be executed at the best rate possible with the trading marked by the merchant, provided there is an agreement in force with the trading house in question.

Competition Participation

[0051] There are a number of prerequisites for participating in competitions of the invention. Firstly, only registered players can participate, and only if they have sufficient credit in their balance to do so; this may take the form of a strict lower limit, or a per-trade Umit (for example based on the size of the trade, margin restrictions, and the like). Computer trading algorithms may function as participants.

[0052] Players wishing to participate, log on to the platform. Players can select games or competitions available at a given time on the site, or open new and invite others to join them.

[0053] Various different types of competitions may be offered. Parameters for games may include entry fee, money available to a given participant, type of leverage and amount, game type (such as a time-based game, a game with a profit target, a tournament, etc.) Other parameters include relevant investment tools, minimum number of participants, maximum number of participants, limitations concerning player ratings, use or nonuse of leverage, and the like.

[0054] Competitions without leverage may be undertaken when two or more competitors wish to compete in one of the potential competitions. They can compete without leverage, and the game participation fees deposited will be taken into the account platform. The winner takes the pot, offset by the platform fee.

[0055] For a competition without leverage, at any given moment only one transaction is open on a particular investment vehicle. Such competitions involve checking the player's the ability to gain 'pips', 'point's or percentages, without regard to money management issues.

[0056] In Forex, A 'pip' is smallest price change that a given exchange rate can make; since most major currency pairs are priced to four decimal places, the smallest change is that of the last decimal point - for most pairs this is the equivalent of 1/100 of one percent, or one basis point. It stands for 'percentage in point'. For other trading instruments, there are other minimal price change such as 'point' etc.

Competitions with leverage

[0057] When using with leverage, a player can initiate certain transactions, using any size and any specific trading tools to compete. In addition to the accumulation of 'pips', leverage also allows the entry of the money management element in the game.

Playing for time

[0058] These types of time-limited games involve allowing players (two or more) to determine play time length, which will generally be fixed. Game initiation starts when all players agree on the start time. The game system starts at a specific initiative provided with more than one player

[0059] It is within provision of the invention that a player can join more than one game. During the game everyone has access his own position, and the relative positions of other players. Depending on the game, the time limit, and other circumstances, the player with the largest number of percentage points/ pips and/or the player who made the most money is declared the winner and will receive a prize fund, which may be determined for example from the net amount of the participation fee.

Goal-Driven Game

[0060] In this type of game the players attempt to reach certain targets, and the winner is determined based upon these goals (for example the winner being the first to reach the goal). A player may propose such a game, or allow the system to initiate a game. In such games the winner may be determined for example as the first that achieves a certain profit target (pips or money).

[0061] Each player assigns an amount of virtual money to the game. Game initiation occurs when all players agree to start, as long as more than one player has signed up.

[0062] A player may sign up for more than one such competition, and during the course of play each player may be apprised of his relative position. The game system may also initiate goal-based competitions, which will start at predetermined times as long as more than one player has signed up.

[0063] In such competitions, there is not necessarily any ending time for the game. The system displays the distance of each of the competitors from the target, for example in terms of 'dollars to goal' or the like. The system informs participants when the first player has achieved the target.

[0064] When the first player reaches the target, this player receives a prize determined for example by the total participation fees of other players, minus a platform fee.

General Tournament

[0065] The game rules are like normal game except for certain conditions. For example the tournament ends when only one player remains with Margin in his account. Furthermore a player may announce withdrawal ; in this situation the player relinquishes his participation fees. There is no limit on the time taken by such tournaments.

Tournament with rounds

[0066] This type of tournament allows for each player performing at least one action within a specific time limit. Failure to perform an action within a specified period of time will be counted as abandonment.

Turn based Tournament

[0067] Players may sign up for this tournament as they would sign up for a tournament with rounds. The game proceeds by turns, with first player making his transactions, pay then passing to the next player in line, proceeding apace in turn- based fashion down the line. The player turn arrangement may change, in accordance with ranking for instance. In these competitions each player has a fixed predetermined amount of time (for instance 2 minutes) to enter his trades.

Using the platform [0068] Use of the platform starts with initial registration. Users will be prompted for some subset of the following information: First name, last name, Mr / Ms, user name (this being the only name exposed on platform), alias (name as it appears to other users), Birthplace, etc.

[0069] Some minimal amount of money will be transferred (above a certain threshold), using credit card, PAYPAL, or the like.

[0070] Withdrawal of funds may be accomplished using the same means as that for deposit of funds.

[0071] Identification may be accomplished by means of a unique user name and strong password (for example, at least eight characters, letters and numbers).

[0072] There may be a number of embodiments involving use of cellular applications for purposes of the invention, such as allowing full participation in the games of the invention by means of cell phone.

[0073] An example of a user profile and associated information and flow is given below:

• Full Name - John Smith

• User name - JSmith

• Alias - ForexShark

[0074] The player logs in to the platform. The player enters his user name and password and clicks on 'Login'.

[0075] A screen then displays "Welcome" Username

[0076] A welcome screen will then display the following data: player nickname, games in which the player is currently participating, and game status (as well as player status within the game, for example earnings, standings, distance from goal, and the like.) A list of games that are available for joining will furthermore be listed. A hyperlink or several will be provided for joining new games. [0077] There is provision in the invention for User Ratings of the games and other aspects of the invention. Each user may also be ranked by the system in terms of player strength. This rating is determined by various means, for example the ratio of winning trades to losing trades, earnings percentage, the total number of trades in a tournament, the total number of wins, and more.

[0078] These principles of operation will be further expounded upon by means of reference to the figures. Information may be presented to users of the system in the form of graphs, for example those shown in Figs. 1-3. Figs. 1-2 exemplify a situation in which the trader may observe long vs. short trading activity for a given instrument. These may be presented by use of volume and/or transaction size information as well.

[0079] Fig. 3 illustrates a situation in which the trader is able to view information concerning the ratios between chosen instruments , including conditional presentation based on triggers and the like based on one or more parameters that the trader may define.

Fig. 4 presents a flow chart in accordance with one particular embodiment of the invention. The flowchart presents steps typical of an embodiment, namely employing steps of: defining a competition type 401; registering a number of players for a competition 402; charging registration fees from said players 403; facilitating trading by said players in some combination of actual and virtual Digitally Tradable Equity markets 404; deciding a winner to said competition based on competition type 405.

[0080] All of the data presented is based on platform data which itself may be derived from historical sources, live feeds, simulations, or the like.

[0081] A user who has no account on a trading house may receive a propsal to join the site by presenting him with a banner/recommendation/link directing him to the trading site, whereat he may fill out a questionnaire or otherwise leave information allowing for his eventual registration and participation. As will be clear to one skilled in the art such participants may be referred to trading house website with various compensation schemes in place such as a per-transaction kickback.

[0082] Although selected embodiments of the present invention have been shown and described, it is to be understood the present invention is not limited to the described embodiments. Instead, it is to be appreciated that changes may be made to these embodiments without departing from the principles and spirit of the invention, the scope of which is defined by the claims and the equivalents thereof.

Claims

1. A Digitally Tradable Equity trading competition comprising: an online server adapted to receive, send and store information concerning user accounts, trades, and Digitally Tradable Equity data; a plurality of clients adapted to issue transaction orders to said server and receive data therefrom; wherein a virtual competition between clients is performed in parallel with actual trades in Digitally Tradable Equity markets, providing a combined virtual and actual trading competition.

2. A method for Digitally Tradable Equity trading competition comprising steps of: defining a competition type; registering a number of players for a competition; charging registration fees from said players; facilitating trading by said players in some combination of actual and virtual Digitally Tradable Equity markets; deciding a winner to said competition based on competition type.

3. The method of claim 2 wherein said competition type is selected from the group consisting of: time-based competition; earning-based competition; goal- based competition; ratings based competition; turn based competition; leveraged competitions; and combinations thereof.

4. The method of claim 2 wherein a predetermined amount of said registration fees are collected by the competition organizers and the remainder are distributed as a playing pot.

5. The method of claim 4 wherein said a predetermined fraction of said playing pot is invested in actual Digitally Tradable Equity markets and a complementary fraction is invested in virtual markets.

6. The method of claim 5 wherein said virtual markets comprise markets created using data from said players' trades.

7. The method of claim 2 wherein said step of deciding winners is based upon a combination of performance characteristics selected from said actual markets and said virtual markets.

8. The method of claim 2 wherein said trades are selected from the group consisting of: sell, buy, long/short, close position, buy stop, buy limit, sell stop, sell limit, stop loss, trailing stop.

9. The method of claim 2 wherein said trading is performed using market data selected from the group consisting of: simulated market data; realtime market data; historical market data; virtual market data.

10. The method of claim 2 further providing access to player personal information selected from the group consisting of: updateable personal information; amount of money in account; deposit and withdrawals; trade history; win and loss history; relative positions; rating and location.

11. A method for Digitally Tradable Equity trading competition comprising: providing an online server adapted to receive, send and store information concerning user accounts, trades, and Digitally Tradable Equity data; providing a plurality of clients adapted to issue transaction orders to said server and receive data therefrom; wherein a virtual competition between clients is performed in parallel with actual trades in Digitally Tradable Equity markets, providing a combined virtual and actual trading competition.

12. A system for facilitating Digitally Tradable Equity trading competition comprising steps of: means for registering a number of players for a competition; means for charging registration fees from said players; means for defining a competition type; means for facilitating trading by said players in some combination of actual and virtual Digitally Tradable Equity markets; means for deciding a winner to said competition based on competition type.

13. The system of claim 12 wherein said competition type is selected from the group consisting of: time-based competition; earning-based competition; goal- based competition; ratings based competition; turn based competition; leveraged competitions; and combinations thereof.

14. The system of claim 12 wherein a predetermined amount of said registration fees are collected by the competition organizers and the remainder are distributed as a playing pot.

15. The system of claim 14 wherein said a predetermined fraction of said playing pot is invested in actual Digitally Tradable Equity markets and a complementary fraction is invested in virtual markets.

16. The system of claim 15 wherein said virtual markets comprise markets created using data from said players' trades.

17. The system of claim 12 wherein said step of deciding winners is based upon a combination of performance characteristics selected from said actual markets and said virtual markets.

18. The system of claim 12 wherein said trades are selected from the group consisting of: sell, buy, long/short, close position, buy stop, buy limit, sell stop, sell limit, stop loss, trailing stop.

19. The system of claim 12 wherein said trading is performed using market data selected from the group consisting of: simulated market data; realtime market data; historical market data; virtual market data.

20. The system of claim 12 further providing access to player personal information selected from the group consisting of: updateable personal information; amount of money in account; deposit and withdrawals; trade history; win and loss history; relative positions; rating and location.