System and method for predicting security price movements using financial news

Abstract

A method of creating a price prediction model that forecasts short-term price fluctuations in financial instruments by collecting, analyzing and classifying financial news for a financial instrument into categories. Distributions for the changes in price of the financial instrument for a set period of time and distributions for the changes in price of the financial instrument as a result of the financial news for each news category for a set period of time are then obtained. If the distributions for the changes in price of the financial instrument are statistically significantly different than the distributions for the changes in price of the financial instrument for a particular news category, and the mean for the change in price is greater or less than zero, a signal is produced indicating the trading action that should be taken for the financial instrument.

1 - 28 . (canceled) 
   
   
       29 . A method of providing financial news items and significance of the financial news items, the method comprising the steps of:
 receiving financial news items for one or more financial instruments associated with business entities;   classifying the financial news items into categories that include:
 a positive category indicating that a particular news item is favorable to the financial outlook of the associated business entity; and 
 a negative category indicating that a particular news item is unfavorable to the financial outlook of the associated business entity; 
   sending the financial news items to a computer of a user for display on the user computer; and   sending the classified categories of the financial news items to the user computer for display on the user computer near the respective news items.   
   
   
       30 . The method according to  claim 29 , wherein:
 each category is represented by a graphic symbol; and   the step of sending the classified categories includes sending the associated graphic symbols.   
   
   
       31 . The method according to  claim 30 , wherein:
 a graphic symbol for the positive category includes an arrow pointing upwards; and   a graphic symbol for the negative category includes an arrow pointing downwards.   
   
   
       32 . The method according to  claim 29 , wherein the categories include a mixed category indicating that a particular news item contains both a favorable and unfavorable financial outlooks of the associated business entity. 
   
   
       33 . The method according to  claim 29 , wherein the categories include a mention category indicating that a particular news item mentions the associated business entity. 
   
   
       34 . The method according to  claim 29 , wherein the categories include a mention category indicating that a particular news item mentions the associated publicly traded company. 
   
   
       35 . A method of providing financial news items and significance of the financial news items for use in making trading decisions of financial instruments representing publicly traded companies, the method comprising the steps of:
 receiving financial news items for a plurality of financial instruments representing a plurality of publicly traded companies;   classifying the financial news items into categories that indicate the impact of the news items on the financial outlook of the associated publicly traded companies;   sending the financial news items to a computer of a user for display on the user computer; and   sending the classified categories of the financial news items to the user computer for display on the user computer near the respective news items for analysis by the user in making trading decisions of the financial instruments.   
   
   
       36 . The method according to  claim 35 , wherein the categories include:
 a positive category indicating that a particular news item is favorable to the financial outlook of the associated publicly traded companies; and   a negative category indicating that a particular news item is unfavorable to the financial outlook of the associated publicly traded companies.   
   
   
       37 . The method according to  claim 35 , wherein:
 each category is represented by a graphic symbol; and   the step of sending the classified categories includes sending the associated graphic symbols.   
   
   
       38 . The method according to  claim 37 , wherein:
 a graphic symbol for the positive category includes an arrow pointing upwards; and   a graphic symbol for the negative category includes an arrow pointing downwards.   
   
   
       39 . The method according to  claim 35 , wherein the categories include a mixed category indicating that a particular news item contains both a favorable and unfavorable financial outlooks of the publicly traded company. 
   
   
       40 . The method according to  claim 35  wherein the categories include a mention category indicating that a particular news item mentions the associated publicly traded company.