DETAILED ACTION
Notice of Pre-AIA or AIA Status
The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
Status of Claims
This action is in reply to the application filed on 11/12/2024. Claims 1-5 are currently pending and have been examined.
Claim Rejections - 35 USC § 101
35 U.S.C. 101 reads as follows:
Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.
Claims 1-5 are rejected under 35 U.S.C. 101 because the claimed invention is directed to an abstract idea without significantly more. A Section 101 analysis is below.
(Step 1) The claims recite a method. For the purposes of this analysis, representative claim 1 is addressed.
(Step 2A, prong 1) Abstract ideas are in bold below, and represents the mental process of enhancing options trading for the purpose, as discussed in Applicant’s specification, [0054], of transforming options data into actionable insights. Please see MPEP 2106.04(a)(2)(III) discussing the "mental processes" abstract idea grouping is defined as concepts performed in the human mind, and examples of mental processes include observations, evaluations, judgments, and opinions.
1. A computer-implemented method for enhancing options trading, comprising steps:
(a) receiving, by a computing system, options data including options attributes for a plurality of options contracts;
(b) calculating, by the computing system, options attributes including implied volatility values and Greeks for the plurality of options contracts using an options pricing model;
(c) applying, by the computing system, a user-defined or preset formula to at least one options attribute to generate transformed options data;
(d) storing, by the computing system, the transformed options data in a database;
(e) generating, by the computing system, at least one graphical user interface that displays the transformed options data, wherein the interface includes interactive elements allowing a user to construct options strategies, visualize and analyze the transformed options data across different options contracts and expirations;
(f) analyzing, by the computing system, patterns in the transformed options data to identify trading opportunities and predict market movements.
(Step 2A prong 2) The additional elements are considered as follows:
Regarding the “computing system”, “database”, “graphical user interface”, and “interactive elements”, these additional elements are no more than mere instructions to implement an abstract idea or other exception on a computer. Please see MPEP 2106.05(f)(2) discussing when the claim invokes computers or other machinery merely as a tool to perform an existing process including use of a computer or other machinery for economic tasks or other tasks (e.g., to receive, store, or transmit data), this does not show integration into a practical application.
(Step 2B) The claims do not include additional elements that are sufficient to amount to significantly more than the judicial exception. As discussed above with respect to integration into a practical application, the additional elements amount to no more than mere instructions to apply the abstract idea of using generic computer components. The claim elements when considered separately and in an ordered combination, do not add significantly more than implementing the abstract idea of transforming options data into actionable insights using a computing system, database, graphical user interface and interactive elements.
Dependent claims 2-5 recite additional details which only further narrow the abstract idea and do not add any additional features, alone or in combination, that would provide a practical application or provide significantly more. No further additional elements are recited in the dependent claims.
Claim Rejections - 35 USC § 103
In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis (i.e., changing from AIA to pre-AIA ) for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status.
The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action:
A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.
The factual inquiries for establishing a background for determining obviousness under 35 U.S.C. 103 are summarized as follows:
1. Determining the scope and contents of the prior art.
2. Ascertaining the differences between the prior art and the claims at issue.
3. Resolving the level of ordinary skill in the pertinent art.
4. Considering objective evidence present in the application indicating obviousness or nonobviousness.
Claims 1-5 are rejected under 35 U.S.C. 103 as being unpatentable over Forsythe (US 8,315,938) in view of Horwarth (US 2011/0179360).
Claim 1 recites:
A computer-implemented method for enhancing options trading, comprising steps: (Forsythe, Fig. 1, 2:28-2:43, Option Analysis; Fig. 6, 5:31-5:50, computer system)
(a) receiving, by a computing system, options data including options attributes for a plurality of options contracts; (Forsythe, Fig. 1, 2:54-2:61, launch Option Analysis, strategy is a two legged spread consisting of two individual option contracts)
(b) calculating, by the computing system, options attributes including implied volatility values and Greeks for the plurality of options contracts using an options pricing model; (Forsythe, Fig. 3B, 3:50-4:19, volatility; Fig. 3B, 4:63-5:3, Greeks; Fig. 10, 6:57-7:3, “computing analysis data from the Spectral Map, including but not limited to the Spectral Slice and Greek risk metrics delta, gamma, theta, vega and rho”)
(c) applying, by the computing system, a user-defined or preset formula to at least one options attribute to generate transformed options data; (Forsythe, Fig. 11, 7:4-7:22, Fig. 8, 6:1-6:20, calculating probability of a security price to be in a specified range at a particular point in time; 7:48-7:54, “analyzing an option comprises using a calculation to predict probable price outcomes based on volatility and statistical distributions of likely price outcomes and determine a strategy's (e.g., an option strategy) profitability. In some embodiments, a graphical tool displays the outcome to provide a matrix of outcomes for efficient conveyance of the model predictions to a user.”)
(d) storing, by the computing system, the transformed options data in a database; (Forsythe, Fig. 8, 6:1-6:20, storing in database)
(e) generating, by the computing system, at least one graphical user interface that displays the transformed options data, wherein the interface includes interactive elements allowing a user to construct options strategies, visualize and analyze the transformed options data across different options contracts and expirations; (Forsythe, Fig. 3B, 3:50-4:19, spectral map; Fig. 10, 6:57-7:3, spectral map)
(f) analyzing, by the computing system, patterns in the transformed options data to identify trading opportunities and predict market movements. (Forsythe, 7:48-7:57, predicted outcomes; 8:30-8:42, predicted level of profitability. Forsythe does not specifically disclose analyzing “patterns”. Horwarth, [0025], discusses certain patterns signify lower risk and opportunity over other patterns. It would have been obvious to a person of ordinary skill in the art before the time of effective filing to modify the predicted outcomes of Forsythe to include the patterns in order to recognize market opportunities as discussed in Horwarth, [0025], and Forsythe, 2:28-2:43.)
Claim 2 recites:
The method of claim 1, further comprising step (g) providing, by the computing system, trade recommendations or strategies to the user based on the analysis of the transformed options data. (Forsythe, Figs. 12A-12C, 7:58-8:10, “The spectral map shows a potential future underlying investment price and a profit or a loss for the strategy. In some embodiments, the spectral map shows a potential future underlying investment price and one or more of the following: a profit or a loss, a delta, a gamma, a theta, a vega, or a rho for the strategy, or any other appropriate metric.”)
Claim 3 recites:
The method of claim 1, wherein the at least one graphical user interface is a formula-applied term structure chart displaying a put line and a call line, wherein the put line and the call line are displayed separately allowing the user to predict the direction of an option contract, the plurality of option contracts, or the underlying security. (Forsythe, Figs. 3A, 3B, 3:3-3:49, display the stock price path. Forsythe does not specifically disclose displaying a put line and a call line, wherein the put line and the call line are displayed separately allowing the user to predict the direction of an option contract, the plurality of option contracts, or the underlying security. Horwarth, Fig. 1A, [0026], shows and discusses a conventional option volatility skew chart 100 that includes two curves: curve 101 corresponds to put options and curve 102 corresponds to call options. It would have been obvious to a person of ordinary skill in the art before the time of effective filing to modify Forsythe to include the conventional skew chart that includes both a put options curve and a call options curve of Horwarth in order to recognize market opportunities as discussed in Horwarth, [0025], and Forsythe, 2:28-2:43.)
Claim 4 recites:
The method of claim 1, wherein the at least one graphical user interface is a statistical analysis interface configured to display a risk profile superimposed over historical price changes over a predetermined time period allowing the user to determine if a particular trade was profitable over the predetermined time period’s price and volatility moves. (Forsythe, Fig. 3B, 3:3-4:19, spectral map overlay, risk profile line for selected time, price and volatility; 7:58-8:10, superimposed)
Claim 5 recites:
The method of claim 4, wherein the statistical analysis interface comprises: a statistical distribution histogram showing underlying price movements; (Forsythe, 3:4-3:49, stock price path, style of chart may be a bar chart; see also 7:48-7:57, statistical distribution)
a first Y-axis representing relative frequency and a X-axis representing underlying prices; (Forsythe, Fig. 3B, 3:50-4:19, price and volatility shown on x and y axes)
data plots indicating the total number of price moves tested at a number of instances at a spot price; (Forsythe, Fig. 3B, 3:50-4:19, pair 336 represents delta, or the amount the strategy price moves given a move in the underlying)
a profit and loss at each spot price is calculated and plotted; (Forsythe, Fig. 3B, 3:50-4:19, band 322 represents profit and loss)
a second Y-axis indicating relative IV change; (Forsythe, 3:32-3:34, the style of the chart may be changed and overlays may be used. Forsythe does not specifically disclose a second Y-axis indicating relative IV change. Horwarth, [0026], discusses “the variable on the vertical (Y) axis is the implied volatility. As it is well known to persons of ordinary skill in the art, the option implied volatility (IV) is the measure of the volatility of the underlying implied by the market price of the option.” It would have been obvious to a person of ordinary skill in the art before the time of effective filing to modify the chart that is adapted to use overlays of Forsythe to include another Y axis to chart the implied volatility as disclosed in Horwarth in order to recognize market opportunities as discussed in Horwarth, [0025], and Forsythe, 2:28-2:43.)
a probability calculated from the selected portion of the histogram plotted; and (Forsythe, Fig. 3B, 3:50-4:19, see the probability of being in the range)
wherein the average return per test from the dataset is indicated providing an expected performance metric. (Forsythe, 4:20-4:51, user can easily see where the option strategy experiences profits and losses)
Conclusion
The prior art made of record and not relied upon is considered pertinent to applicant's disclosure includes: US 20150058258; US 20140344186; US 8706598; US 8620792; US 20130103615; US 20120197817; US 20120116943; WO 2012047793; US 20110282802; US 7996296; US 20110178953; WO 2011063078; US 7689496; US 7590587; US 20090222372; US 20080228633; US 20080120217; US 20070233594; US 20070198387; WO 2005114517; WO 03001325; and US 20020174056.
Any inquiry concerning this communication or earlier communications from the examiner should be directed to Gregory Harper whose telephone number is (571)272-5481. The examiner can normally be reached M-Th 7am-5pm.
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If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Ryan Donlon can be reached on (571) 270-3602. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300.
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/GREGORY HARPER/Examiner, Art Unit 3692
/RYAN D DONLON/Supervisory Patent Examiner, Art Unit 3692