System and method for estimating and optimizing transaction costs

A method for estimating transaction costs of a security trade execution according to a trading strategy selected by a user, the method performed by a transaction cost optimization server coupled to one or more electronic markets and one or more client devices via an electronic communication network, said method comprising the steps of:

• receiving, at said transaction cost optimization server from a client device over said electronic communication network, data defining parameters of a proposed trade execution from a user, and data specifying a user-selected trading strategy that is selected from among a plurality of predefined trading styles displayed in a user interface on the client device, or is specifically defined by said user using the user interface;
• estimating, by said transaction cost optimization server, the transaction costs of the received proposed trade execution based on the user-selected trading strategy and market data;
• optimizing, by said transaction cost optimization server using real-time market conditions, said estimated transaction costs under said user-selected trading strategy;
• and
• providing, by said transaction cost optimization server over said electronic communication network to a device associated with said user, at least one recommended action based on said optimizing step,
• wherein said at least one recommended action is displayed in the user interface in real-time based on the market conditions, wherein said user minimizes transaction costs by said at least one recommended action in executing said trade.

A system for estimating and optimizing transaction costs of proposed execution trades of securities according to a risk value selected by a user, the system comprising:

• a plurality of transaction cost optimization servers connected to a plurality of client devices over an electronic communication network with one or more electronic markets, each transaction cost optimization server configured to:
• receive, from a client device over said electronic communication network, said user-selected risk value and data specifying parameters of a proposed trade order that are selected from a user interface on the client device,
• estimate the transaction costs of the received proposed trade execution based on the user-selected risk value and market data,
• optimize, using real-time market conditions, said estimated transaction costs under said user-selected risk value and market data;
• and
• provide, to a client device associated with said user over said electronic communication network, at least one recommended action based on said optimization,
• wherein said at least one recommended action is displayed in the trading interface in real-time based on the market conditions, and wherein a user minimizes transaction costs by performing said at least one recommended action in executing said trade.