By now you’ve seen the Academy Award nominees (and if you haven’t, why not?).

I hate to say it but I quite like the list. It would have been nice to see films like Children Of Men or Pan’s Labyrinth get more notice, of course, but those films simply opened too late to have any impact. The people predicting both films as Best Picture nominees were living in a dream world. And Little Miss Sunshine seemed more like a decent piece of fluff than an Oscar-calibre film to me, but I would rather solid fluff get nominated than total tripe like Chocolat. Clearly the studios pushing Letters From Iwo Jima, Venus and Half Nelson did their homework, while either the Dreamgirls team failed to do their job or the film really just couldn’t find the love.

In the acting categories, only the supporting actors provided any real surprises. Seeing Mark Wahlberg’s picture on the screen instead of Jack Nicholson’s was shocking, in a good way. I think Jack was fine in The Departed, but he didn’t really fit in with what the rest of the cast were doing; he was in his own little Jack world, doing crazy Jack work. Wahlberg was the classic supporting actor, appearing little, but always making an impact when he did. Kudos to him. Also kudos to the Little Children team for getting Jackie Earle Haley’s name up there. The two lead groupings were as predictable as could be, with the Academy stifling any chance of a Borat bid, or of anyone shaking up the Silver Foxes. And for once, the supporting actress category fell exactly as the consensus predicted. It might all seem a bit boring, but only because we listen to all of the talking heads put these names up there so often that we wind up with expectations. Had none of us paid any attention to the Oscar race until the lovely Salma read off the nominees, we would have been pleasantly surprised by a few of them, I’m sure.

In the Best Picture race, I’m stunned at Dreamgirls’ miss, but only because it seemed to be so perfectly placed. It opened at the right time, had solid reviews, a few guaranteed acting nominations, a Golden Globe win. Really, I think people can be forgiven for thinking it would be nominated. I think most people suspected that Letters For Iwo Jima would manage to push one of the front-runners out, but there was no agreement as to which front-runner was vulnerable. I wouldn’t have been shocked to see The Queen miss, or even Little Miss Sunshine. And in the Directors’ category, those sneaky buggers managed a surprise nomination again, how they manage to do it almost every year is beyond me. That their surprise this year is Paul Greengrass is wonderful. So I understand the decision some people have made to not see the film, I did see it, and found it to be emotionally wrenching, bringing up all kinds of feelings about 9/11 that had been dormant. The film’s impact is entirely thanks to the way Greengrass’ usual barf-cam tricks worked in the confined space of an airliner.

Apart from that, the rest of the categories are fairly predictable. I’m surprised Volver missed not only a screenplay nod, but a foreign-language nod as well! Not that Almodovar’s name guarantees a spot there, but the film has been hailed by all quarters. And it is nice see Children of Men and Pan’s Labyrinth get a handful of technical nominations, there truly were a lot of beautiful films this year.

Tim

Before I get into Lead Actor, here is a small addendum to the previous entry:

One actress who I forgot to mention as a dark horse candidate is Maggie Gyllenhaal for Sherrybaby. I don’t think it will happen. Her film made no money (just over 100k back in October) and only critical types are even mentioning her name, yet who knows, with the right push from the studio, Gyllenhaal could surprise everyone. Including me. Now, back to business.

Most years, the Lead Actor category is full to the brim with strong performances from popular actors, while Lead Actress is a wasteland showing a lack of well-written parts for women. But this year is the exact opposite; we’ve got Meryl vs Judi vs Helen, plus possibly Kate, Penelope, Renee or Naomi, while the men’s side is truly weak. It is nice to see, though I’m sure it is an aberration. A weak year means that actors with smaller pedigrees may finally find enough support to break into the Old Boys Club, and at least one or two of the five nominations will go to those newer faces.

Let’s quickly get this out of the way: Forest Whitaker will be nominated. There is no need to say anything more, he’ll be nominated. Winning every single award on the planet for male lead, including now the Golden Globe can do that for a guy (especially after hearing the crowd cheer at the Globe ceremony).

The consensus seems to be that Will Smith will be up for The Pursuit Of Happyness, Peter O’Toole will get his 8^th nomination, for Venus, and Leonardo DiCaprio will get nominated for something, either Blood Diamond or The Departed. The fifth spot is a matter of contention.

I am happy with the consensus, because it isn’t hard to believe that each of those actors will find a solid level of support. They all earned SAG nominations, their films either reviewed well, made a lot of money, or both. Their performances are uniformly strong (I’m going on word of mouth for O’Toole’s work), though in some cases they hold up what is an otherwise mediocre film (see Pursuit Of Happyness, Blood Diamond). But, I can’t be bothered to write an entry if it is just to list the consensus. So for now, let’s assume that Whitaker, Smith and O’Toole will be #1, 2 and 3 on the list and choose a surprise or two for the rest.

Leo needs some thought: for which film will he be nominated? Blood Diamond got mixed reviews but Leo and Djimon Hounsou earned kudos. The Departed got strong reviews all around, but has a large male cast and Leo could have to fight for votes. However, the key is that Leo will be fighting for those votes in the supporting category, as apparently every star of the film has been pushed there by the studio, and that is where the SAG nominated him. So if Leo is to earn a Lead nomination, it will be for Blood Diamond. For now, let’s place him in there as nominee #4.

There are two, and only two, strong possibilities for the fifth spot: Ryan Gosling (Half Nelson) and Sacha Baron Cohen (Borat). Gosling earned rave reviews as the star of Half Nelson, and earned a SAG nomination as thanks for it, but the film came out awhile ago and his momentum is likely no longer growing. Worrisome as well is the lack of a Golden Globe nod, something that points to a weak promotional effort by the studio. However, even if Ryan Gosling’s total vote count winds up lower than early indicators suggested it could be, I think that enough voters will list him high enough on the ballot that he should still be considered a major challenger.

Sacha Baron Cohen is a textbook example of someone earning fewer total votes, but a higher percentage of top votes. His performance as Borat is a one-of-a-kind phenomenon and everyone knows it, and judging from the crowd’s reaction at the Golden Globes, the man has some fans. If a strong enough subset of voters is impressed with Cohen’s work, they would simply have to list his name on the upper lines of the ballot. The big question is, how many voters were as turned off by the film as others were turned on? I think he gets in, because voters know we won’t see performance that audacious for some time.

There are six names but only five spots. It isn’t possible to truly predict which of them will fail to muster the needed first-choice votes to get in. Ryan Gosling could easily fail. Not enough voters may like the perceived anti-Americanism of Borat. Will Smith could lose momentum. Peter O’Toole could simply not get enough voters, who really can say with a small film like that that has barely played outside of the major population centers. I think only Forest Whitaker can be considered a lock. So since I have to trim the list down to five, let’s bump out Ryan Gosling. The possibility of a Cohen nomination is just too juicy to let go of, and I’m going to stick with it. Expect Ryan Gosling to be left on the outside looking in.

Other minor contenders include Aaron Eckhardt for Thank You For Smoking (too early), Clive Owen for Children of Men (too late), Matt Damon for The Good Shepherd (too long) and Ken Watanabe (never took off).

Tim

Perusing all of the various Oscar prediction websites (OscarWatch, GoldDerby, etc.), I have found one category where there is almost universal agreement over who is to be nominated: Best Actress in a Lead Role. The experts have spoken, and they say that it will be the following five women, no exceptions, and no way that they are wrong:

Penelope Cruz for Volver

Helen Mirren for The Queen

Meryl Streep for The Devil Wears Prada

Kate Winslet for Little Children

Judi Dench for Notes on a Scandal

Now I grant you, this could easily come true. These really are the only actresses who have been mentioned more than once by anyone, they are the five SAG nominees, and I would not bet a single penny that the above list is incorrect. But it sometimes seems that we Oscar lovers come to our conclusions simply because other Oscar lovers have as well, and not based on any actual reasoning. So let’s take a closer look, keeping in mind the Academy’s voting system where an actress would need 16% of first place votes to be nominated (see two posts down for more info on that).

Helen Mirren’s spot has to be assured. She has won virtually every Lead Actress award out there, and there are a lot of them, believe me. The Queen is a favourite of every guild, earning nominations from all of them, and the film revolves around Mirren’s portrayal of Queen Elizabeth II. So let’s assume that we are all correct, and that Helen Mirren will get more first-place votes than anyone else. I have yet to see any compelling reason not to do so.

Meryl Streep has to be next, because, she’s Meryl Streep. She’s been nominated for truly garbage roles (Music of the Heart, anyone?) and this is one of her best performances in a long while, which means she should be assured a spot. However, there may be a small group of voters who list her as a supporting actress instead, which is probably the more correct spot for her. It isn’t likely, since the studios are often insistent on reminding voters of which category is “appropriate”, but it needs mentioning anyway.

Judi Dench is another actress with a history of nominations, often more for bland work (Chocolat) but her work in Notes on a Scandal is juicy and dark, enough to go with the flow and keep her on the list of “probables”.

Penelope Cruz has never been what one would call an Academy favourite, but Volver is unlike any of her Hollywood work. For whatever reason, Cruz is a solid actress is her native Spanish, but in English sometimes just goes off the rails. So with Volver, a big, lush Almodovar picture, Cruz may not get as many total votes as some of the competition, but she will definitely earn enough upper votes to keep her in the game; it is her breakthrough role, something that none of the “Silver Foxes” can claim.

Kate Winslet worries me greatly. Now this is partly because she is my favourite actress in the whole wide world and any perceived snub of Kate is an affront to me. But my worry mostly comes from the fact that at the age of 31, Kate already has four Oscar nominations under her belt. Streep, Dench and Mirren have been lauded before as well, but they’ve all put in some of their best work ever this year, and many voters likely just like to see them still giving their all when so many others from their era have fallen off of the map. I worry that voters will see Kate’s performance (not her best, truly) as something worth listing as a fourth or fifth choice, nowhere near enough to the top to get her in. This leaves her vulnerable to a dark horse candidate with a small number of highly-placed votes, and I’m actually predicting that Kate will be the big snub of the category. Oh, well. I’m sure that they will invite her to be a presenter, at least.

If Kate truly does fall, that means someone will take her spot, and predicting who it will be means thinking about which films are riding momentum right now. Annette Bening’s name had oft been listed in the early days of this Oscar campaign for Running With Scissors, but the film came and went without a peep and the SAG voters would have all seen it in time to judge it. Also, the film has a huge cast, and any support that is out there is likely diffused through them all.

What about Beyonce Knowles? Ah haha, I know. But, remember Chicago? Remember how every single cast member earned a nomination? Oh, wait, Richard Gere didn’t. Ah hahahahaha!!! Sorry, I hate Richard Gere. But, Dreamgirls is in a similar position, and though it is Eddie Murphy and Jennifer Hudson getting all of the kudos, it isn’t impossible for voters to love the film enough to write Beyonce’s name down. Not impossible, but improbable, because if voters feel the need to nominate another female member of the cast, it seems more likely that Anika Noni Rose would be their choice, as unlike Beyonce, she has actually earned positive reviews.

Toni Collette could surprise us all and earn a nomination for her work as the harried mother in Little Miss Sunshine. It is a solid performance, one that anchors the film against the many crazy characters around her, and Lord knows, the film is getting a ton of buzz. I don’t see it happening however, because those anchoring performances tend to be ignored in favour of loonier, flashier fare. If any other cast member will surprise us with a nomination, it would be Steve Carrell.

The Zellwegger is lurking out there with a little film called Miss Potter, in which she plays the title character. Never count the squinty-eyed wonder out, as the Academy voters seem to have a soft spot for her. But did the film get seen? It opened late in theatres, so it will come down to whether the studio got it out there in time. And in the new, shortened period for voters to make up their minds, you would really need a Weinstein to guarantee success in promotion. Oh wait, Miss Potters is being promoted by… The Weinstein Company. Let’s consider Renee a strong, strong dark horse contender.

My last stab at finding a surprise nominee is Naomi Watts, currently starring in The painted Veil with Ed Norton and Live Schreiber. It only just opened and I haven’t seen it, but a glance at the reviews on Rotten Tomatoes shows it to be an old-school period piece, something that Sydney Pollack might have made back in the day. The reviews for Watts are solidly positive and I would have to put her on par with Renee Zellwegger in terms of apparent chances, except that there is no Weinstein attached to her film.

So let us proclaim Renee Zellwegger as our dark horse candidate for the 5^th Oscar nomination, and damn all of the experts who have anointed Kate Winslet has sure to hit the five-timer club. Helen, Meryl, Judi, Penelope and Renee. We’ll know soon enough!

Tim

Previously, I looked at the apparent frontrunners for the Best Director Oscar and separated the “locks” from the vulnerable. Now comes the hard part: figuring out which filmmakers, if any, can find the support to push their way in.

Guessing the dark horse is hard because there are no trends or indicators to use as guides. For instance, it was easy to guess that Marc Forster was vulnerable for his work on Finding Neverland, but how could one safely assume that it would be Mike Leigh who would take his place for his work on Vera Drake? Similarly, Gary Ross was nowhere near being a lock with Seabiscuit, but only a handful of Oscar prognosticators guessed that it would be Fernando Meirelles earning a surprise nomination for his work on City Of God.

Sometimes the dark horse is an eccentric filmmaker (David Lynch, Mulholland Drive) though others of that ilk have failed (David Cronenberg, A History Of Violence). Sometimes the surprise is a big-name foreign filmmaker (Pedro Almodovar, Talk To Her), sometimes simply the director of an uplifting film (Stephen Daldry, Billy Elliott) or even of a weepie melodrama (Lasse Hallstrom, The Cider House Rules). If there is any constant between these lucky few, it must be that their promoters get a great job of making sure that the Academy voters saw their films.

We previously identified Stephen Frears and the duo of Jonathan Dayton & Valerie Faris as those most at risk of being bumped from the Oscar shortlist. Historically, only one DGA nominee gets bumped, and having just seen Little Miss Sunshine last night, I’m sticking with the idea that Dayton/Faris will be out of luck. We’ll give Stephen Frears a pass.

So who will bump the intrepid directing duo? There is a long list, all of whom are likely to have a small pocket of support amongst Academy directors, but one of whom is likely to reach that crucial 16% level (see previous post for details on that). First up are Alfonso Cuaron (Children of Men) and Guillermo Del Toro (Pan’s Labyrinth), who along with Alejandro Gonzalez Inarritu (Babel) make up the Mexican Trio that has Hollywood buzzing this year. All three are apparently worthy of recognition (I’m stilling waiting for Pan’s Labyrinth to play here, so can’t directly comment), but it seems as if they are going to attract the same voters. So let’s say that a significant handful of voters list all three on their ballot; could enough of them list Cuaron as #1 and Del Toro #2, or vice versa, to push one of them past Gonzalez Inarritu? It seems likely that since he has already earned a DGA nom and there is so little time between ballots being due for the DGA and the Academy that Gonzalez Inarritu will remain the one member of the Mexican Trio to get through to the Oscar level, while the other two will come up short.

Next we have to consider Paul Greengrass, who made United 93. Lots of people were stunned to not see his name listed as a DGA nominee, judging from various Oscar websites with message boards. But Greengrass’ film came out ages ago, had a small but significant number of detractors, and also has to contend with the presence of another 9/11 film, from a better-known director, Oliver Stone’s World Trade Center. If a voter wanted to list a 9/11 picture, and liked both films, which would they choose? The one they saw ages ago about the plane (to put it in blunt terms) or the more recent one about the Twin Towers? Just like with the news coverage back in those fateful days, the Towers falling get more attention, and so I think Paul Greengrass’ chances were doomed from the start.

So far we have yet to find a convincing argument for anyone to bump out even a weak nominee like Dayton/Faris, but there is obvious one left to talk about: The Clint.

Clint Eastwood has been talked about for months now, with his pair of Iwo Jima films garnering much discussion. Some people loved Flags of our Fathers, many did not. Some people are raving about Letters From Iwo Jima, many have not even seen it. Eastwood has had such a strong string of recent films that many thought he could even be nominated for both films, pulling a Steven Soderbergh, but apparently the DGA isn’t as apt to nominate you based on your name as some feared. We’re left to wonder if Clint vote-splitted (vote-splat?) or if neither of his films is being well-received? I think it is a case of the older directors choosing to vote for Fathers, you know, the one about the American soldiers taking over Iwo Jima and kicking Japan’s butt, and the younger, more left-leaning voters picking Letters because it is (apparently) the better film and also because picking the one told from the Japanese side just feels like a left-wing thing to do. Where I’m going with this is that I don’t think we will see a rallying behind one film or the other; I think Clint is out of luck this year, though perhaps not for Best Picture (we’ll cover that down the road).

Which leaves me with only one last, crazy choice as a dark horse contender, and that is Robert Altman for A Prairie Home Companion. Everyone knows that he never won an Oscar for direction. Everyone knows that he died this past year. Could enough voters look at this year’s crop of frontrunners, like Dayton/Faris, Frears and maybe even Bill Condon, and think “Screw it, I’m putting Robert Altman’s name down”? I think this is a possibility, because I doubt anyone will list Altman’s name on the fifth spot on their ballot. Or fourth. Or third. If a voter writes the name Robert Altman, it will be on the very top line of the ballot, because they will making a statement with their choice. Unlike Clint Eastwood, who will likely be listed in a lot of #2 spots behind Martin Scorsese, or Bill Condon, who will have a lot #2 and #3 votes, Altman’s are #1 all the way. The only question is, am I right that a significant number of directors will want to honour him in this way? We’ll see, but I’m going out on a limb to say that Robert Altman will be 2006’s surprise nominee for Best Director at the Academy Awards.

Thoughts?

Tim

Three days, folks. That’s all the time that remains for directors and their corporate backers to push for some attention from Oscar (The Golden Dude, as Robin Williams memorably tagged him). Because even though the nominees aren’t announced until January 23^rd, those ballots are due by Saturday morning. So for all of you Children of Men fans, and Pan’s Labyrinth supporters, and United 93 enthusiasts, I’ve got some bad news: it ain’t gonna happen.

I know…

I know.

There’s always a chance.

But no.

It’s over.

And I’ll tell you why: because the Directors Guild nominees were announced yesterday. And your guy wasn’t there.

The DGA nominations always come out right around when the Academy Award nominations are due, and thanks to their timing, they provide a certain snapshot of the future. On average, four out of the five DGA nominees move on to Academy Award nominations, and their films, often all five, move on to Best Picture. What can be said about the directors who fail to earn Oscar nods after some DGA love? Well lots, actually, but none of it can be consistently applied to each occurrence. The main thing to consider is the different voting systems of the Guild and Academy. The Guild’s nominees are chosen based on who was listed the most on members’ ballots. The Academy however uses a preferential system where each member can list up to five choices – once a film garners about 16% of the first choice votes, it becomes a nominee (I’d explain the 16% number but it’s not that interesting, trust me). So the accountants drop the films with the lowest #1 votes, and move those ballots to their second choice, etc. until five nominees are determined. This mean that though a film or person can be mentioned often (like Gary Ross, director of Seabiscuit, for instance), if they are seldom listed near the top of the ballot (like Gary Ross, director of Seabiscuit, for instance), they may not become an Oscar nominee.

It’s all about the love, is what I’m saying. Look at the directors who failed to get Oscar nods. Marc Forster for Finding Neverland. Gary Ross for Seabiscuit. Cameron Crowe for Almost Famous. They all kinda feel like fourth choices, don’t they? Compare that to Ang Lee for Crouching Tiger, Hidden Dragon or Peter Jackson for Return Of The King or Steven Spielberg for Schindler’s List. They all feel like first choices.

This year’s DGA nominees are:

Bill Condon – Dreamgirls

Jonathan Dayton & Valerie Faris – Little Miss Sunshine

Stephen Frears – The Queen

Alejandro Gonzalez Inarritu – Babel

Martin Scorsese – The Departed

Do any of those feel like fourth or fifth choices? Try to think of whether a film is heralded because of, or in spite of its director. Babel may have strong performances, but it is Gonzalez Inarritu getting most of the buzz. The Departed is overflowing with strong male performances, but it is Marty getting all of the love. And Dreamgirls? Well okay, Jennifer Hudson is getting most of the love there, but Bill Condon is getting his fair share as well. None of them feel like fifth choices to me.

Stephen Frears may be a third of fourth choice nominee. His name has only occasionally been attached to a heralded film (The Grifters would probably be the last big one), and though The Queen is on everyone’s faves list from 2006, it is because of Helen Mirren, not him. So let’s consider him vulnerable.

Jonathan Dayton & Valerie Faris are definitely vulnerable. Everyone loved Little Miss Sunshine, but you know why? Because of little Abigail Breslin and the way she closed out the film. They love it because it is a little cinematic treat. Not, at least I think not, because of Dayton & Faris’ direction. So if anyone is getting booted this year, it simply has to be them. But the big question is, will they? We’ll figure that out next…

Tim Chandler

T’was the night before Christmas, when all though the house
Not a creature was stirring, except for a grouse
The tube socks were hung on the lampshade with care
In hopes that Ol’ Santy Claus soon would be there
Little Jimmy was snugly tucked in his dog-bed
While visions of sty-ro-foam danced in his head
And Jimmy in his wood-pile and Jimmy in her cot
Had just gone to sleep, as good Jimmys ought
When down from the street came the sound of a siren
They sprang from their beds to see what was transpirin?
Jimmy flew to the window to see what she could
While Jimmy nervously munched on a big hunk of wood
As she peered through the darkness and into the night
Outside was the flash of a red and blue light
And, what to her shock should she see down below
But a single blue cop car, parked in the snow
With a little old driver, all big, fat and hairy
It must be the Sherriff, their old adversary!
Forcing his girth from the car, he got out
And, raising a megaphone, he started to shout:
“Now Jimmy and Jimmy, you Possible twins!
Ha ha! I bet that you thought that you’d win!
I know that you thought that you had me confounded,
But you’d better come out! I’ve got you surrounded!”
Up in their apartment the two Jimmys sighed
Jimmy opened the window and then he replied
“Our name is IM-possible, you fat stupid boor!
You just don’t listen! We’ve told you before!”
Laughing, the Sheriff said, “Not that old trick!
You two must think I’m as dumb as a stick!
Since you won’t come out,” he said with a grin
While he cocked his gun, “I’ll just have to go in!”
With a thunderous kick he beat down the door
And started upstairs to Jimmy and Jimmy’s floor
The Jimmys grabbed Little Jimmy, his goggles and cape
And ran to the roof to make their escape
They opened the door and ran into the night
When their eyes were met with a fabulous sight
Eight tiny reindeer stood there on the roof
With bells round their necks and on every hoof
Behind them, a beautiful shiny red sleigh
Filled to the brim with gifts for Christmas Day
But Jimmy and Jimmy had no time to waste
They had to hide from the Sheriff in haste!
All out of breath the Sheriff arrived
And behind the sleigh the two Jimmys dived
Madly, the Sheriff was looking around
When he slipped on some ice and fell to the ground
His head hit the roof with an awful loud CRACK
And he lay there, unconscious, stretched out on his back
At first the two Jimmys weren?t sure what to do
But then in an instant they knew, yes, they knew
From the back of the sleigh they took one empty bag
Stuffed the Sheriff inside and stuck on a tag
On it they wrote “From Santa, To Gina
Special Delivery, Destination: Argentina”
And once they had put the bag back on the sled
Downstairs they crept and went right back to bed
But they heard the Sheriff exclaim, as he woke in his sack
“You darned Possible twins! I’ll get you! I’ll be BAAAACK!”

Welcome to April. If I told you we were about to enter the slowest month on average in the past five years at the box office, you’d probably label me mad. “What of January and February? Isn’t this where movies go to die?” Perhaps, but opening weekends during January (avg. 7.04) and February (avg. 6.90) seem monsterous compared to April’s paltry 5.84 average. Similarily, April has the lowest delist average among all the months at 17.79.

The average multiplier over the past five years is slightly higher than HSX’s adjust multiplier of 2.9, at 3.0. April has an average multiplier of only 2.76. Not great, but not the lowest monthly multiplier. (That would be January and November at 2.62.) Average screen counts are below average (1773) at 1641, but higher than January’s low of 1492.

So let’s take a look at some of the best and worst performers on record for April over the past five years and see if we can find anything interesting that could help us with predicting April openers.

Best Openings

1. 1. Lost In Space 20.15 (3306 screens) 1998
2. 2. Anaconda 16.62 (2456 screens) 1997
3. 3. The Saint 16.28 (2307 screens) 1997

I must say that I’m shocked at the number of screens that Lost In Space got last year. By the looks of our top three grossers and good openings for Bad Boys (15.52) and The Big Hit (10.81), I’d say that action flicks tend to do well this month. This, coupled with the fact that Lost In Space and Mercury Rising (10.10) both opened the same weekend in double digits, seem to be very good signs for The Matrix (MATRX) which opens on the cusp of April, March 31.
Possibly influenced movies: MATRX, ENTRP

Worst Openings

1. 1. Destiny Turns On The Radio 0.68 (1126 screens) 1995
2. 2. Chasers 0.73 (782 screens) 1994
3. 3. Fatihful 0.97 (803 screens) 1996

Uh…I’ve never even heard of any of these movies. ‘Nuff said?

Best Per Screen Average

1. 1. Thin Line Between Love And Hate 8231.65 (1131 screens) 1996
2. 2. Friday 7618.50 (865 screens) 1995
3. 3. Bad Boys 7279.55 (2132 screens) 1995

There’s Big Willy again. Man, he can pack’em in the theatre. I don’t know much about the first two movies, but with great per screen averages like this, I’m betting New Line had wished they’d opened wider.

Worst Per Screen Average

1. 1. Destiny Turns On The Radio 603.91 (1126 screens) 1995
2. 2. Tarzan And The Lost City 786.12 (1412 screens) 1998
3. 3. The Pebble And The Penguin 851.71 (1315 screens) 1995

Destiny…rears its ugly head as it tries to cement itself as one ot those bombs that goes down in history. I think Tarzan is trying to join it.

Best Multiplier

1. 1. Four Weddings And A Funeral 4.89 1994
2. 2. While You Were Sleeping 4.70 1995
3. 3. Barney’s Great Adventure 4.38 1998

Love is in the air this month as romantic movies have great legs. Our top two here, along with The Truth About Cats And Dogs (3.59) and City Of Angels (3.61) make you wonder if Valentine’s Day has moved.
Possibly influenced movies:MTRLD, LOSTN, FORCS

Our dreaded Purple Pal Barney lets us know that school is out. Easter holidays mean great legs for kids movies. Barney, Thumbelina (3.77), A Goofy Movie (4.24), James and The Giant Peach (3.03) and Paulie (3.41) all have great multipliers. Look for the box office reciepts for Doug’s First Movie (DOUG) to pick up again before delist.
Possibly influenced movies:DOUG, BABYG, KINGI

Worst Multiplier

1. 1. Destiny Turns On The Radio 1.59 1995
2. 2. Major League 3 1.63 1998
3. 3. Brainscan 1.76 1994
4. 4. Eight Heads In A Duffel Bag 1.76 1997

Destiny again. You might want to avoid stoopid comedies (ala Major League and Eight Heads) as they tend to perform badly this month.
Hope this gives you some help in deciding what to hold and what to short in the coming month. Tune in for Part 5 as we take on blockbusters The Lost World and Mission Impossible and look ahead to the blockbuster to be, Star Wars: Episode One.
Off with their hot pants!
Jimmy Impossible

INVENTOR: Keiser, Timothy Maxwell, Los Angeles, California
Burns, Michael R., Los Angeles, California
ASSIGNEE-AT-ISSUE: HSX, Inc., Los Angeles, California (02)
APPL-N0: 620,906
FILED: Mar. 25, 1996
INT-CL: [6] G06F 17#60
US-CL: 705#37; 705#36; 705#35
CL: 705
SEARCH-FLD: 705#37, 36
REF-CITED:
U.S. PATENT DOCUMENTS
3,499,646
3/1970
*
Burgess, Jr. et al.
273#278
3,573,747
4/1971
*
Adam et al.
705#37
3,581,072
5/1971
*
Nymeyer
705#37
4,412,287
10/1983
*
Braddock, III
705#37
4,597,046
6/1986
*
Musmanno et al.
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1992.
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Oct. 1996.
PRIM-EXMR: MacDonald, Allen R.
ASST-EXMR: Crecca, Michele Stuckey
LEGAL-REP: Brown Raysman Millstein Felder & Steiner LLP
ABST:
The present invention discloses a method, apparatus, and article of manufacture for a computer-implemented financial management system that permits the
trading of securities via a network. A server computer receives buy and sell orders for derivative financial instruments from a plurality of client computers. The
server computer matches the buy orders to the sell orders and then generates a market price through the use of a virtual specialist program executed by the server
computer. The virtual specialist program responds to an imbalance in the matching of the buy and sell orders.
NO-OF-CLAIMS: 12
EXMPL-CLAIM: 1
NO-OF-FIGURES: 6
NO-DRWNG-PP: 4
SUM:

BACKGROUND OF THE INVENTION
1. Field of the Invention
This invention relates in general to computer-implemented financial systems, and in particular to an improved automated securities trading system.
2. Description of Related Art
Computer-implemented securities trading systems are well known in the art. One such system is that disclosed U.S. Pat. No. 4,674,044, issued to Kalmus et al.,
entitled “Automated Securities Trading System”, and incorporated by reference herein. These computer-implemented securities trading systems obtain bid and
asked prices for securities from a database and then execute trades based on the bid and asked prices. However, there is generally still a human component to such
systems.
For example, most financial markets also employ one or more market makers called “specialists.” These specialists fill customer orders from the specialist’s
inventory position if there are no matches for the customer orders in the open market. In the prior art, the specialist function is not automated, but is performed by a
firm or individual. Thus, there is a need in the art for an improved computer-implemented trading system that includes an automated specialist function to create a
market for the securities traded and to lessen the volatility of smaller securities markets.

SUMMARY OF THE INVENTION
To overcome the limitations in the prior art described above, and to overcome other limitations that will become apparent upon reading and understanding the
present specification, the present invention discloses method, apparatus, and article of manufacture for a computer-implemented financial management system that
permits the trading of securities via a network. In accordance with the present invention, a server computer receives buy and sell orders for derivative financial
instruments from a plurality of client computers. The server computer matches the buy orders to the sell orders and then generates a market price through the use
of a virtual specialist program executed by the server computer. The virtual specialist program responds to an imbalance in the matching of the buy and sell orders.
An object of the present invention is to lessen the price volatility of derivative financial instruments traded in narrower markets.
A feature of the present invention is a virtual specialist program that engages in trading in the market to offset the price volatility and to provide liquidity to the
market.
DRWDESC:
BRIEF DESCRIPTION OF THE DRAWINGS
Referring now to the drawings in which like reference numbers represent corresponding parts throughout:
FIG. 1 is a block diagram of an exemplary hardware environment of the preferred embodiment of the present invention;
FIG. 2 is a flowchart illustrating the general logic of the present invention;
FIG. 3 is a flowchart illustrating the logic of the pricing/trading program of the present invention;
FIG. 4 is a flowchart illustrating the logic of the generate market price program of the present invention;
FIG. 5 is a flow diagram illustrating the logic of the virtual specialist program of the present invention; and
FIG. 6 is a flow diagram illustrating the logic of the stop trading program of the present invention.
DETDESC:

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT
In the following description of the preferred embodiment, reference is made to the accompanying drawings which form a part hereof, and in which is shown by way
of illustration a specific embodiment in which the invention may be practiced. It is to be understood that other embodiments may be utilized and structural changes
may be made without departing from the scope of the present invention.

OVERVIEW
The present invention comprises a computer-implemented trading system for derivative financial instruments. The present invention accepts buy and sell orders
from traders for the derivative financial instruments, sets a market price based on the supply and demand, and participates in the market as a trader in order to
minimize price volatility. One preferred embodiment of the present invention is a computer-implemented “Hollywood Stock Exchange”, which may be
implemented as a simulation (i.e., game) or as an actual trading system for derivative financial instruments representing movies, talent, CDs, and television
programs. These derivatives could be purchased with dollars or with a virtual currency known as “Hollywood dollars” which are controlled by a virtual reserve
bank.
The derivative financial instruments are identified by a Current Trading List displayed for the traders that comprises a list of movies in various stages of production,
talent, and other entertainment-oriented assets. The list contains:
name of the derivative financial instrument;
genre of the movie (action-adventure, mystery, western, comedy, etc.);
production status (scripting, pre-production, filming, editing, release, home-video, etc.);
number of shares in circulation;
last trading price (printed every 15 minutes);
price movement (i.e. +/- Hollywood Dollars) since the previous midnight (PST);
price movement since the previous mid-day;
price movement year to date;
Traders are able to view the list sorted by:
name, alphabetically;
genre, alphabetically;
production status, alphabetically;
most active (number of shares traded yesterday);
biggest gainers;
biggest losers; and
fastest movers today (e.g., fastest 20 movers up and fastest 20 movers down).
Similar information would be provided for other derivative financial instruments offered on the Hollywood Stock Exchange.
Each trader’s portfolio is identified by a Portfolio data structure that comprises the trader’s account status. This information includes:
the amount of cash in the trader’s account (paid interest at the system discount rate plus some increment, compounded daily);
current percentage rate paid to cash;
the total value of held stocks at the last selling price;
the total value of held bonds at the last selling price;
total portfolio value (TPV) (cash + bonds + stocks);
percentage of TPV in cash;
percentage of TPV in bonds; and
percentage of TPV in stocks.
Traders can generate any number of different reports for display, including:
lists of stocks and bonds being traded (see above);
index of total Hollywood stocks (HSXI) expressed as a number, with 1000 defined as the aggregate total stock price value on opening day, wherein HSXI =
(today’s gross stock-value)/(opening day gross stock-value);
index of total Hollywood bonds (HBXI) expressed as a number, with 1000 defined as the aggregate total bond price value on opening day, wherein HBXI =
((today’s gross bond-value)/(opening day gross bond-value));
index of total Hollywood Stock Exchange (HMXI) comprised of all stocks and bonds, and expressed as a number, with 1000 defined as the aggregate total stock
price value on opening clay, wherein HMXI = ((today’s gross market-value)/(opening day gross market-value));
lists of the top market performers, e.g., the top 10 traders in percentage portfolio growth calculated as net portfolio value – change = (% change of cash) + (%
change of stocks) + (% change of bonds), and for each of the categories: yesterday (midnight to midnight), last week (7 days, ending midnight, each thursday), last
month (closes at midnight last calendar day of month), last quarter (closes at midnight on last day of last month/quarter), year-to-date (running daily total of
percentage value changes)/(days year-to-date), and annually (closes at midnight on December 31 each year);
overall market condition report, including a list of stopped issues with:
name;
last trading price;
time that stop-trade condition occurred;
percentage the issue actually moved on-the-day before the stop-trade;
number of total shares and/or bonds traded today;
dollar value of total trades today;
number of buy and sell trades today; and
number of buy and sell trades this month.
Use of the above information will guide traders in making future buy and sell orders.

HARDWARE ENVIRONMENT
FIG. 1 is a block diagram that illustrates an exemplary hardware environment for the preferred embodiment of the present invention, and more particularly,
illustrates a typical distributed computer system using the Internet 10 to connect client computers 12 executing for example, Web browsers, to server computers 14
executing a computer program embodying the present invention. A typical combination of resources may include client computers 12 that are personal computers
or work stations connected via the Internet 10 to server computers 14 that are personal computers, work stations, minicomputers, or mainframes.
Generally, both the client computers 12 and the server computers 14 are comprised of one or more CPUs 16, various amounts of RAM 20 storing computer
programs and other data, and other components typically found in computers. In addition, both the client computers 12 and the server computers 14 may include
one or more monitors, and fixed or removable data storage devices 20 such as hard disk drives, floppy disk drives, and/or CD-ROM drives. Also included may be
input devices such as mouse pointing devices and keyboards.
Both the client computers 12 and the server computers 14 operate under the control of an operating system, such as Windows, Macintosh, UNIX, etc. Further, both
the client computers 12 and the server computers 14 each execute one or more computer programs 18 under the control of their respective operating systems. The
present invention is preferably implemented as one or more computer programs 18 executed by the server computer 14, although in alternative embodiments these
computer programs 18 may also be executed on the client computer 12.
Generally, the computer programs 18 implementing the present invention are tangibly embodied in a computer-readable medium, e.g. one or more of the fixed
and/or removable data storage devices 20 attached to the computer. Under control of the operating system, the computer programs 18 may be loaded from the data
storage devices 20 into the RAM of the computer for subsequent execution by the CPU 16. The computer programs 18 comprise instructions which, when read
and executed by the computer, causes the computer to perform the steps necessary to execute the steps or elements of the present invention.
Those skilled in the art will recognize that the exemplary environment illustrated in FIG. 1 is not intended to limit the present invention. Indeed, those skilled in the
art will recognize that other alternative hardware environments may be used without departing from the scope of the present invention.

GENERAL LOGIC OF THE TRADING SYSTEM
FIG. 2 is a flowchart illustrating the general logic of the present invention.
Block 200 represents the server computer 14 waiting for the next event to occur. Once the event occurs, control is transferred to blocks 202-224 to identify the
event and respond accordingly.
Block 202 is a decision block that represents the server computer 14 determining whether it received a request to display data from the client computer 12. If so,
block 204 represents the server computer 14 transmitting data to the client computer 12 for subsequent display. The data transmitted for display preferably includes
at least three types of data: the current list of trading derivative financial instruments, the trader’s portfolio, and other reports generated by the server computer 14.
Block 206 is a decision block that represents the server computer 14 determining whether it received a request to submit a buy order from the client computer 12
for a particular derivative financial instrument, e.g., stock or bond. If so, block 208 represents the server computer 14 processing the buy order by placing it in a
queue in the memory of the server computer 14. The buy order is a data structure comprising:
trader’s account number;
trader’s name;
the time and date of the order;
the stock or bond to buy;
the cash balance in the trader’s account;
a text-field where the trader may enter the total number to buy (generally in multiples of 100);
The buy order waits in the queue for the expiration of a predetermined “sweep pricing cycle”. In the preferred embodiment, the sweep pricing cycle occurs every 15
minutes although other intervals could be used. The market price the trader actually pays for the derivative financial instrument is determined by the aggregate
supply/demand for the derivative financial instrument at the end of the sweep pricing cycle during which the order was placed. The market price is set by the
pricing/trading program executed by the server computer, which is described below in FIG. 3. The trader’s account is then charged the market price for the
derivative financial instrument. If the purchase uses up all available cash in the trader’s account, the trader is “loaned” enough money to pay for the purchase, and
their account is charged interest at a predetermined rate, e.g., 18% a year compounded daily, on the negative account balance. The interest is charged against the
trader’s account until they accumulate more cash to zero out the balance, either by selling stocks or buying dollars.
Block 210 is a decision block that represents the server computer 14 determining whether it received a request to submit a sell order from the client computer 12. If
so, block 212 represents the server computer 14 processing the sell order by placing it in a queue in the memory of the server computer 14. The sell order is a data
structure comprising:
trader’s account number;
trader’s name;
the time and date of the order;
the stock or bond to sell;
the amount of the stock or bond in the trader’s account;
a text-field where the trader may enter the total number to sell (generally in multiples of 100);
Like the buy order, the sell order waits in the queue for the expiration of the predetermined sweep pricing cycle. The market price at which the trader actually sells
the derivative financial instrument is determined by the aggregate supply/demand for the derivative financial instrument at the end of the sweep pricing cycle during
which the order was placed. The market price is set by the pricing/trading program executed by the server computer, which is described below in FIG. 3. The
trader’s account is then credited with the market price for the derivative financial instrument.
The sell order can be either produced by a trader or generated by the server computer 14, as will be explained in more detail below. For a sell order produced by a
trader, the trader views a list of stocks or bonds owned by the trader on a monitor attached to the client computer and chooses to sell a quantity at the market price.
When the trader requests to view the list of stocks, the server computer 14 transmits certain information to the client computer 12 for display, including, for each
stock owned, the last trading price (LTP), the quantity of stocks, the purchase price, and the date purchased. Similarly, when viewing the list of bonds, the server
computer 14 transmits certain information to the client computer 12 for display, including, for each bond owned, the last trading price (LTP), the interest rate being
earned for each kind of bond, the quantity of bonds, the purchase price, and the date purchased.
Block 214 is a decision block that represents the server computer 14 determining whether an internal timer for the sweep pricing cycle has expired. If so, block 216
represents the server computer 14 processing the timer by executing a pricing/trading program as described in FIG. 3.
Block 218 is a decision block that represents the server computer 14 determining whether it received a request to change the discount rate. If so, block 220
represents the server computer 14 executing a discount rate program. In order to add or subtract liquidity, the server computer 14 occasionally steps in to act as a
virtual reserve bank and adjust the discount rate. The discount rate is adjusted based on the performance of the specific industry of the market. For the Hollywood
Stock Exchange, the discount rate is adjusted to add or subtract liquidity to affect the growth of the entertainment industry. When the server computer 14 lowers
the discount, all the bonds seem to be a better deal, because the bonds are paying a fixed rate interest that never changes. This encourages traders to buy more
bonds, and this surge in buying demand causes a correlated increase in bond prices as described above. The same thing happens to stocks, because traders are
making less money on the interest being paid on the cash balance in their trading account. When the server computer 14 raises the discount, the bonds seem to be a
worse deal, since their advantage over the discount is smaller. Thus, the server computer 14 relaxes the buying pressures or demands for bonds, which should result
in additional sell orders, or at least slow the buying of bonds, thus decreasing their prices as they trade in the market. Likewise, stocks seem less attractive, since
traders could make more money by keeping cash in their accounts and getting interest on it.
Block 222 is a decision block that represents the server computer 14 determining whether it received a request to revise the derivative list. If so, block 224
represents the server computer 14 executing a listing program. The server computer 14 determines whether the list of derivatives trading in the system should be
revised. The list could be revised to reflect new derivative offerings, expired derivatives, and delisted derivatives.
When a new derivative is offered, the price is based on the derivative’s potential value. For example, for a new stock offering, which represents a movie on the
Hollywood Stock Exchange, the initial price of the stock could be based on the movie’s potential box office revenue. For a bond offering, which represents talent
on the Hollywood Bond Exchange, the price of the bond could be based on the Hollywood Reporter’s Star Power Index. A bond representing a talent with a low
Star Power Index of 15 would be issued with a higher yield than a bond representing a talent with a high Star Power Index rating.
A warrant with a strike price is attached to the new derivative when it is offered. When the derivative and warrant are first issued, the warrant is of no value until the
strike price is reached. For a stock, the strike price could be reached after the movie has grossed a certain level of revenue. When a derivative is delisted from the
exchange, a stock due to the movie ending its production run or a talent due to retirement or death, for example, the warrants are called and the traders are paid the
value of the warrants, thus providing off-balance sheet financing for studios.

PRICING/TRADING PROGRAM
FIG. 3 is a flowchart illustrating the logic of the pricing/trading program of the present invention. Block 300 represents the server computer 14 retrieving the buy
and sell orders that have accumulated in the queue during the period since the prior sweep pricing cycle. Block 302 represents the server computer 14 matching the
buy orders with the sell orders, although it is likely that an identical number of buy and sell orders would not have accumulated in the queue during the period.
Block 304 represents the server computer 14 executing the generate market price program described in FIG. 4 to determine the market price for the derivative
financial instruments. After the market price is determined, block 306 represents the server computer 14 updating the traders’ portfolios to reflect the buy and sell
orders in the queue being processed at the market price. Block 308 represents the end of the pricing/trading program.

GENERATE MARKET PRICE PROGRAM
FIG. 4 is a flowchart illustrating the logic of the generate market price program of the present invention. One purpose of the generate market price logic is to
generate a market price for a derivative financial instrument that reflects the demand or lack of demand for the derivative financial instrument in the market. Block
400 represents the server computer 14 measuring the imbalance between the buy and sell orders during the period since the prior sweep pricing cycle. Block 402
represents the server computer 14 determining the price movement of a derivative financial instrument caused by the imbalance in buy and sell orders. Block 404
represents the server computer 14 executing a virtual specialist program as described in FIG. 5 to provide stability and liquidity to the market. Block 406 represents
the server computer 14 executing the stop trade program, as described in FIG. 6, to stop trading in a derivative financial instrument if the projected price movement
is excessive during the trading day and threatens the integrity of the market for that instrument. Block 408 represents the server computer 14 setting the market
price, which becomes the price the pricing/trading program uses to update the traders’ portfolios. Block 410 represents the end of the generate market price
program.
In measuring the imbalance between buy and sell orders, as represented by block 400, the absolute difference between the number of sells and the number of buys
is defined as the net movement in sweep (NMS). A sweep increment variable (SIV) is defined as the increase or decrease in price caused by an incremental
imbalance in the number of buy orders and sell orders. A lot movement variable (LMV) represents the incremental lot size that will result in a price increase or
decrease of one SIV. The projected price movement (PM) can be expressed as:
PM = (NMS/LMV)*SIV.
For example, with 42,000 buy orders and 30,000 sell orders for a particular stock, the NMS = (42,000 – 30,000) = 12,000. With SIV = $ 0.25 and LMV = 5000,
the price movement of the particular stock will be (12,000/5,000)*0.25 = $ 0.50. Thus, the market price of the particular stock will be $ 0.50 greater than the last
trading price.
One can easily see that, with such a pricing scheme, there is the potential for great volatility in the price of a derivative financial instrument and the eventual loss of
investor confidence in the market mechanism. In exchanges such as the Hollywood Stock Exchange, it would be possible for one or more individuals to pursue
trading strategies that would purposely cause drastic price fluctuations.
In order to encourage growth and stability in the capital market regulated by the trading system of the present invention, a virtual specialist program is executed by
the server computer, as represented by block 404 in FIG. 4. In executing the virtual specialist program, the server computer 14 regulates the trading by actively
trading in the market out of a virtual specialist portfolio (VSP). The virtual specialist portfolio initially contains half of all the issued shares of each derivative
financial instrument.

VIRTUAL SPECIALIST PROGRAM
FIG. 5 is a flow diagram illustrating the logic of the virtual specialist program of the present invention. Block 500 is a decision block that represents the server
computer 14 determining whether or not the price movement during the sweep pricing cycle is greater or equal to an adjusted price movement threshold (APT). The
APT is a constant in the memory of the server computer 14. If the APT is greater than the price movement, then the server computer 14 does not trade in the
market. If the price movement is greater than or equal to the APT, then the server computer 14 trades out of a virtual specialist portfolio. The level of trading by the
server computer 14 is determined by the amount that the price movement exceeded the APT. The greater the price movement, the more shares the server computer
14 trades to offset the price movement.
In an exemplary embodiment of the present invention, the ATP = 1.25 and the server computer 14 performs the following steps: if PM = APT then the server
computer 14 matches 20% of unmatched shares; if PM = APT + 0.25 then the server computer 14 matches 20%of unmatched shares; if PM = APT + 0.50 then
the server computer 14 matches 30% of unmatched shares; if PM = APT + 0.75 then the server computer 14 matches 40% of unmatched shares; if PM = APT +
1.0 then the server computer 14 matches 50% of unmatched shares; if PM = APT + 1.25 then the server computer 14 matches 60% of unmatched shares; if PM =
APT + 1.50 then the server computer 14 matches 70% of unmatched shares; or if PM = APT + 1.75 then the server computer 14 matches 80% of unmatched
shares.
Block 502 represents the server computer 14 generating a buy or a sell order to offset the price movement. The buy or sell order generated by the server computer
14 is placed in the queue with the trader buy and sell orders to be processed during the next sweep cycle.
Since the virtual specialist portfolio initially includes half of all the securities traded, the server computer 14 could eventually deplete the virtual specialist portfolio
or cause the virtual specialist portfolio to own all the shares of a stock. In order to maintain a balanced virtual specialist portfolio, and provide some liquidity to the
market, the server computer 14 generates additional buy and sell orders to offset orders generated in response to the price movement exceeding the APT. Block 504
represents the server computer 14 generating timed buy and sell orders. In one embodiment of the invention, the server computer 14 assess each stock and each
bond in the virtual specialist portfolio. The server computer 14 determines the deficit or surplus in the item, and then place 1/288th of the deficit as a “timed
recovery order” into each successive 15 minute segment for the next 3 days. When the pricing/trading program 255 matches buy and sell orders as represented by
block 320, the pricing/trading program 255 includes any “timed recovery orders” outstanding for the last 3 days in the sweep. These orders are matched with the
traders’ buy and sell orders. Block 506 represents the end of the virtual specialist program.

STOP TRADING PROGRAM
FIG. 6 is a flow diagram illustrating the logic of the stop trading program of the present invention. Block 600 represents the server computer 14 determining the
price movement of a stock caused by the imbalance in buy and sell orders. Block 602 represents the server computer 14 measuring the price movement on the day,
not just during the sweep cycle period. Block 604 is a decision block that represents the server computer 14 determining whether the net price movement (NPM)
within one “trading day” (i.e., midnight-midnight) is greater than 50% up or down. As represented by block 606, the buy and sell orders are removed from the
queue if the net price movement is greater than 50% for a stock trading above $ 20. At that point, the trading in that issue is stopped within the 15 minute period
until further notice. All orders (buy and sell) for that stock during this sweep are unfilled. The trading has stopped due to “excessive order imbalance”.
For example, assume that the Last Trading Price (LTP) for “Rambo-17″ is $ 67 ( + 7.5 on-the-day). During one 15-minute sweep pricing cycle, the server
computer 24 receives buy orders for 655,000 shares of “Rambo-17″. Also, the server computer 14 receives sell orders for 35,000 shares of “Rambo-17″. The
server computer 14 evaluates the price movement for the sweep pricing cycle, and tests it to see if the net projected price movement “on-the-day” is greater than
50%. If it would be greater than 50%, it stops trading in that instrument only. In this example, there is a net order-imbalance of 620,000 shares, which would create
an up movement in price of ( + 620,000/5000)*$ 0.25 = + $ 31.00. Since the total movement on the day would be the $ 7.50 so far plus the additional $ 31.00,
the net projected price movement on the day would be $ 31.00 + $ 7.50 = $ 38.50. If the opening price that day was $ 59.50, the percentage projected price
movement for the day is $ 38.50/$ 59.50 = 64%. Since the projected net price movement would be greater than 50%, the trading is stopped for that instrument. If
the projected price movement was less than 50%, the price of the instrument would be adjusted accordingly and trade in that stock continued. Block 608 represents
the STOP TRADE order that issues regarding the particular stock. Traders who issued a buy or sell order for the stock are notified that the order has not been
filled due to excessive order imbalance during the trading day. Finally, block 610 represents the end of the stop trading program.

CONCLUSION
The foregoing description of the preferred embodiment of the invention has been presented for the purposes of illustration and description. It is not intended to be
exhaustive or to limit the invention to the precise form disclosed. Many modifications and variations are possible in light of the above teaching. It is intended that
the scope of the invention be limited not by this detailed description, but rather by the claims appended hereto.
CLAIMS: What is claimed is:
[*1] 1. A computerized method for regulating market price in a computerized trading system, the system receiving buy orders and sell orders for an instrument,
the method comprising:
measuring an imbalance between buy orders and sell orders for the instrument received over a given period;
computing a projected price movement based on the measured imbalance between the number of buy and sell orders;
setting a market price for the instrument based upon the received buy and sell orders and the measured imbalance; and
automatically generating additional buy orders or sell orders for the instrument at the market price to guarantee execution of some or all of the received buy or sell
orders if the projected price movement is greater than or equals a predetermined price movement threshold.
[*2] 2. The method of claim 1, wherein the step of measuring the imbalance comprises computing an absolute difference between the number of buy orders and
the number of sell orders.
[*3] 3. The method of claim 2, wherein the projected price movement is computed from the difference and stored variables.
[*4] 4. The method of claim 3, wherein the stored variables include a sweep increment variable and a lot movement variable.
[*5] 5. The method of claim 3, wherein the step of computing the projected price movement comprises computing the projected price movement using the
following equation:
PM = (NMS/LMV)*SIV,
where PM represents the projected price movement, NMS represents the absolute difference between the number of buy and sell orders, LMV represents the lot
movement variable, and SIV represents the sweep increment variable.
[*6] 6. The method of claim 1, further comprising generating a number of additional orders in direct proportion to an amount by which the projected price
movement exceeds the predetermined price movement threshold.
[*7] 7. A computerized method for regulating market price in a computerized trading system that receives buy orders and sell orders for an instrument, the
method comprising:
measuring an imbalance between buy and sell orders received for the instrument over a plurality of periods;
computing a projected price movement for each of the periods based on the measured imbalance between the number of buy and sell orders;
computing a total price movement in the instrument for the plurality of periods based upon the projected price movement during the periods; and
stopping trading activity in the instrument if the computed total price movement exceeds an excessive order threshold.
[*8] 8. The method of claim 7, comprising computing the excessive order threshold from an opening market price for the instrument determined prior to the
plurality of periods.
[*9] 9. The method of claim 8, wherein the step of computing the excessive order threshold comprises computing the excessive order threshold as 50% of the
opening market price for the instrument.
[*10] 10. The method of claim 1, wherein the step of automatically generating additional buy and sell orders comprises automatically generating orders to
guarantee execution of all of the received buy and sell orders.
[*11] 11. A computer-readable storage medium for storing program code means for, when executed, causing a computer to perform a computerized method for
regulating market price in a computerized trading system that receives buy orders and sell orders for an instrument, the method comprising:
measuring an imbalance between buy and sell orders received for the instrument over a plurality of periods;
computing a projected price movement for each of the periods based on the measured imbalance between the number of buy and sell orders;
computing a total price movement in the instrument for the plurality of periods based upon the projected price movement during the periods; and
stopping trading activity in the instrument if the computed total price movement exceeds an excessive order threshold.
[*12] 12. A computer-readable storage medium for storing program code means for, when executed, causing a computer to perform a computerized method for
regulating market price in a computerized trading system that receives buy orders and sell orders for an instrument, the method comprising:
measuring an imbalance between buy and sell orders received for the instrument over a plurality of periods;
computing a projected price movement for each of the periods based on the measured imbalance between the number of buy and sell orders;
computing a total price movement in the instrument for the plurality of periods based upon the projected price movement during the periods; and
stopping trading activity in the instrument if the computed total price movement exceeds an excessive order threshold.

The formula for calculating ROI is: (1+(profit/basis) ^ (1/# days))-1

“profit” is the amount of money you expect to make. Take the delist or adjust price, and subtract the current price. If the result is positive, that is your profit if you buy long. If the result is negative, ignore the minus sign, and that is your profit if you sell short.

“Basis” is the amount you are capitalized in the stock. For long buys, this is just the current price. For short sells, If you do not yet own the stock, it is also the current. If you do already own the stock, it is the amount you paid plus any profits you have made. This is an important distinction. Price paid matters for short sells, since your profits, and an equal amount of your initial investment, remain capitalized in the stock until you cover.

Using this formula, a stock which is currently priced at $100 yields identical rates of return whether you buy it long, and it adjusts to $150, or you sell it short, and it adjusts to $50. However, this ignores that by covering and re-shorting, you can get a better rate of return. But calculating exactly how good your rate of return would be with re-shorting very much depends on when the profits come, the amount of the profits, what the ROI of alternative investments are (where would you put the profits? the bigger your account, the lower the ROI of alternative investments are likely to be), and in how often you have to re-short, since commissions will take their toll.

Given that most short sells tend to only see profits in the very short term (less than a week), we decided it would be better to calculate the formula without regard for re-shorting, and remind you that the profits from shorting can be improved upon the more re-shorting presents itself as an opportunity. If you want to calculate an idealized ROI for short selling (assumes no commissions, constant daily rate of return, and alternative ROI identical to current ROI), you can use the formula ((EDP/Current price)^ (1/(# of days until delist or adjustment)))-1. Given an erratic profit stream, commissions, and an alternative ROI less than your current investment, your expected ROI with periodic re-shorting is going to be somewhere in between the results of the two formulas. If you want to have both formulas calculated for you, using your own inputs, you can download my Excel spreadsheet at http://www.hsbr.net/columns/tmiller/dailyroi.xls

Given the lower than expected (at least by me) drop offs to DVADV and IKNOW, plus their closer delist dates, both stocks present an excellent arbitrage opportunity when HSX comes back online – between 1.5% and 2.0% per day.

Given the presence of this most excellent arb, I revise my stock recommendations as follows (in order):

1) BOOGI (only if you can get in early at a price below $20. This should rise fast) 2) MANWH (still dirt cheap and offering an estimated return of 20% per day) 3) MADCI (An adjustment to at least the 20’s, in my estimate) 4) DVADV (slightly better than IKNOW) 5) IKNOW 6) STARS

STARS has dropped a bit in my rankings. This is partly due to the arb stocks available, also because I have thought a bit more about STARS. I still think it will have a $30-$35 million weekend, but it is unlikely it will delist much over $90. This is largely due to the high screen count, and heavy competition coming up. Bluckbusters with high screen counts usually have a very high drop off, since its easier to find a showing which fits a filmgoers schedule and fewer audience members are turned away due to sell outs. Mission Impossible and Lost World, both examples of very high screen counts, both did way below the average 3x 1st weekend multiplier. There is also some heavy competition heading its way in the form of JACKL, ALIEN and FLUBR.

A lot of traders will realize this, and there will be a massive selloff when STARS unhalts, cutting into the likely profit margins. I still think this stock will be profitable, but it probably won’t be as profitable as the other opportunities listed, and offers a much higher risk. In other words, the stock is likely to have a high opportunity cost. However, if you are quite sure STARS will have a weekend in excess of $37, it should be adjusted high enough to make it a better deal than the others. I am skeptical of it reaching such lofty heights. AIRFO set the R rated opening weekend record this summer, and STARS is unlikely to do much better than that.

Tom Miller