U.S. patent application number 12/371064 was filed with the patent office on 2009-06-18 for systems and methods for anonymous electronic trading.
Invention is credited to Andrew C. Gilbert, Philip M. Ginsberg, Howard W. Lutnick.
Application Number | 20090157525 12/371064 |
Document ID | / |
Family ID | 26917369 |
Filed Date | 2009-06-18 |
United States Patent
Application |
20090157525 |
Kind Code |
A1 |
Ginsberg; Philip M. ; et
al. |
June 18, 2009 |
SYSTEMS AND METHODS FOR ANONYMOUS ELECTRONIC TRADING
Abstract
Systems and methods for anonymous electronic trading that allow
a trader to hide his or her identity and inhibit trading
interactions are provided. Using these systems and methods, a
trader can, using various trading interfaces, control a level of
trading anonymously and configure warnings that are provided to
protect against inadvertent completion of potential-risk-involved
trades.
Inventors: |
Ginsberg; Philip M.; (New
York, NY) ; Gilbert; Andrew C.; (Califon, NJ)
; Lutnick; Howard W.; (New York, NY) |
Correspondence
Address: |
DEAN P. ALDERUCCI
CANTOR FITZGERALD, L.P., 110 EAST 59TH STREET (6TH FLOOR)
NEW YORK
NY
10022
US
|
Family ID: |
26917369 |
Appl. No.: |
12/371064 |
Filed: |
February 13, 2009 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
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09853430 |
May 10, 2001 |
7516097 |
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12371064 |
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60223028 |
Aug 4, 2000 |
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Current U.S.
Class: |
705/26.1 |
Current CPC
Class: |
G06Q 40/04 20130101;
G06Q 30/0601 20130101 |
Class at
Publication: |
705/26 |
International
Class: |
G06Q 30/00 20060101
G06Q030/00 |
Claims
1. A method of displaying a bid or offer in an electronic trading
system, comprising: receiving the bid or offer from a first trader;
determining whether a second trader has selected to make bids or
offers from the first trader unavailable; and displaying the bid or
offer to the second trader if the second trader has not selected to
make bids or offers from the first trader unavailable.
2. The method of claim 1, further comprising: not displaying the
bid or offer to the second trader if the second trader has selected
to make bids or offers from the first trader unavailable.
3. The method of claim 1, further comprising: displaying the bid or
offer to the second trader in a given manner if the second trader
has selected to make bids or offers from the first trader
unavailable.
4. A method of processing a pending trade, the method comprising:
determining whether execution of the pending trade would exceed a
warning limit of a first trader in the pending trade; and executing
the pending trade if execution of the pending trade would not
exceed the warning limit of the first trader and would not exceed
the warning limit of a second trader in the pending trade.
5. The method of claim 4, further comprising: determining whether
the first trader has selected to automatically reject pending
trades that would exceed the warning limit of the first trader and
whether the second trader has selected to automatically reject
pending trades that would exceed the warning limit of the second
trader; and not executing the pending trade if execution of the
pending trade would exceed any of the warning limit of the first
trader and the warning limit of the second trader.
6. The method of claim 4, further comprising: determining whether
both the first trader and the second trader have selected to
automatically execute only a portion of the pending trade;
splitting the pending trade into an executable portion and an
unexecutable portion; and executing the executable portion.
7. The method of claim 4, further comprising: determining whether
the first trader has selected to automatically execute only a
portion of the pending trade and the second trader has selected to
automatically execute all of the pending trade; splitting the
pending trade into an executable portion and an unexecutable
portion; and executing the executable portion.
8. The method of claim 4, further comprising: determining whether
both the first trader and the second trader have selected to
automatically execute all of the pending trade; and executing the
pending trade.
9. The method of claim 4, further comprising: determining whether
at least one of the first trader and the second trader has selected
to manually execute only a portion of the pending trade; prompting
the at least one of the first trader and the second trader to
determine whether the at least one of the first trader and the
second trader wants to manually execute only a portion of the
pending trade; splitting the pending trade into an executable
portion and an unexecutable portion; and executing the executable
portion.
10. The method of claim 4, further comprising: determining whether
the first trader has selected to automatically execute only a
portion of the pending trade and the second trader has selected to
manually execute all of the pending trade; prompting the second
trader to determine whether the second trader wants to manually
execute only a portion of the pending trade; splitting the pending
trade into an executable portion and an unexecutable portion; and
executing the executable portion.
11. The method of claim 4, further comprising: determining whether
at least one of the first trader and the second trader has selected
to manually execute only a portion of the pending trade;
determining whether the first trader has selected to automatically
execute only a portion of the pending trade and the second trader
has selected to manually execute all of the pending trade;
prompting the at least one of the first trader and the second
trader to determine whether the at least one of the first trader
and the second trader wants to manually execute all of the pending
trade; prompting the second trader to determine whether the second
trader wants to manually execute all of the pending trade; and
executing the pending trade.
12. The method of claim 4, further comprising: determining whether
the first trader would like to make bids or offers from the second
trader unavailable if execution of the pending trade would exceed
the warning limit of the first trader.
13. The method of claim 4, further comprising: determining whether
the second trader would like to make bids or offers from the first
trader unavailable if execution of the pending trade would exceed
the warning limit of the second trader.
14. A system for displaying a bid or offer in an electronic trading
system, comprising: a first workstation that receives the bid or
offer from a first trader; a processor that determines whether a
second trader has selected to make bids or offers from the first
trader unavailable; and a second workstation that displays the bid
or offer to the second trader if the second trader has not selected
to make bids or offers from the first trader unavailable.
15. The system of claim 14, wherein the second workstation does not
display the bid or offer to the second trader if the second trader
has selected to make bids or offers from the first trader
unavailable.
16. The system of claim 14, wherein the second workstation displays
the bid or offer to the second trader in a given manner if the
second trader has selected to make bids or offers from the first
trader unavailable.
17. A system for processing a pending trade, comprising: a
processor that determines whether execution of the pending trade
would exceed a warning limit of a first trader in the pending
trade, and that executes the pending trade if execution of the
pending trade would not exceed the warning limit of the first
trader and would not exceed the warning limit of a second trader in
the pending trade.
18. The system of claim 17, wherein the processor also determines
whether the first trader has selected to automatically reject
pending trades that would exceed the warning limit of the first
trader and whether the second trader has selected to automatically
reject pending trades that would exceed the warning limit of the
second trader, and does not execute the pending trade if execution
of the pending trade would exceed any of the warning limit of the
first trader and the warning limit of the second trader.
19. The system of claim 17, wherein the processor also determines
whether both the first trader and the second trader have selected
to automatically execute only a portion of the pending trade,
splits the pending trade into an executable portion and an
unexecutable portion, and executes the executable portion.
20. The system of claim 17, wherein the processor also determines
whether the first trader has selected to automatically execute only
a portion of the pending trade and the second trader has selected
to automatically execute all of the pending trade, splits the
pending trade into an executable portion and an unexecutable
portion, and executes the executable portion.
21. The system of claim 17, wherein the processor also determines
whether both the first trader and the second trader have selected
to automatically execute all of the pending trade, and executes the
pending trade.
22. The system of claim 17, wherein the processor also determines
whether at least one of the first trader and the second trader has
selected to manually execute only a portion of the pending trade,
prompts the at least one of the first trader and the second trader
to determine whether the at least one of the first trader and the
second trader wants to manually execute only a portion of the
pending trade, splits the pending trade into an executable portion
and an unexecutable portion, and executes the executable
portion.
23. The system of claim 17, wherein the processor also determines
whether the first trader has selected to automatically execute only
a portion of the pending trade and the second trader has selected
to manually execute all of the pending trade, prompts the second
trader to determine whether the second trader wants to manually
execute only a portion of the pending trade, splits the pending
trade into an executable portion and an unexecutable portion; and
executes the executable portion.
24. The system of claim 17, wherein the processor also determines
whether at least one of the first trader and the second trader has
selected to manually execute only a portion of the pending trade,
determines whether the first trader has selected to automatically
execute only a portion of the pending trade and the second trader
has selected to manually execute all of the pending trade, prompts
the at least one of the first trader and the second trader to
determine whether the at least one of the first trader and the
second trader wants to manually execute all of the pending trade,
prompts the second trader to determine whether the second trader
wants to manually execute all of the pending trade, and executes
the pending trade.
25. The system of claim 17, wherein the processor also determines
whether the first trader would like to make bids or offers from the
second trader unavailable if execution of the pending trade would
exceed the warning limit of the first trader.
26. The system of claim 17, wherein the processor also determines
whether the second trader would like to make bids or offers from
the first trader unavailable if execution of the pending trade
would exceed the warning limit of the second trader.
Description
CROSS REFERENCE TO RELATED APPLICATIONS
[0001] This application is a continuation of co-pending U.S. patent
application Ser. No. 09/853,430 (U.S. Patent Application
Publication No. 2002/0019799), filed May 10, 2001, which claims the
benefit of U.S. Provisional Patent Application No. 60/223,028,
filed Aug. 4, 2000, both of which are hereby incorporated by
reference herein in there entirety.
BACKGROUND OF THE INVENTION
[0002] The present invention relates to systems and methods for
anonymous electronic trading. More particularly, the present
invention relates to systems and methods for electronic trading
that enable traders to remain anonymous with each other while still
allowing those traders to monitor counterparty risk.
[0003] In recent years, electronic trading systems have gained wide
spread acceptance for trading of a wide variety of items, such as
goods, services, financial instruments, and commodities. For
example, electronic trading systems have been created which
facilitate the trading of financial instruments and commodities
such as stocks, bonds, currency, futures, oil, gold, pork bellies,
etc. As another example, online auctions on the Internet have
become popular markets for the exchange of services and both new
and used goods.
[0004] Many of these electronic trading systems use a bid/offer
process in which bids and offers are submitted to the systems by a
passive side and then those bids and offers are hit and lifted (or
taken) by an aggressive side. For example, a passive trader may
submit a "bid" to buy a particular number of 30 Year U.S. Treasury
bonds at a given price. In response to such a bid, an aggressive
side trader may submit a "hit" in order to indicate a willingness
to sell bonds to the first trader at the given price.
Alternatively, a passive side trader may submit an "offer" to sell
the particular number of the bonds at the given price, and then an
aggressive side trader may submit a "lift" (or "take") in response
to the offer to indicate a willingness to buy bonds from the
passive side trader at the given price. In such trading systems,
the bid, the offer, the hit, and the lift (or take) are
collectively know as "orders". Thus, when a trader submits a bid,
the trader is said to be submitting an order.
[0005] Given the laws of supply and demand, if a first trader
desires to buy or sell an extraordinarily large size of a
particular financial instrument or other item, other traders may
modify their prices for that instrument or item to the detriment of
the first trader in order to take advantage of that desire. In this
way, the other traders may distort the market price of the
instrument or item away from what the price would be for that
instrument or item trading with the same size over varied buyers or
sellers. Accordingly, traders frequently desire to remain anonymous
when trading so that other traders cannot determine their identity
prior to execution of any given trade.
[0006] Although traders in electronic trading systems frequently
desire to remain anonymous in this way, many traders still desire
to be able to monitor counterparty risk by keeping track of and
limiting the total size of trades that they are completing with
each other trader. Accordingly, it is an object of the present
invention to provide systems and methods for electronic trading
that enable traders to remain anonymous with each other while still
allowing those traders to monitor counterparty risk.
SUMMARY OF THE INVENTION
[0007] In accordance with this and other objects of the invention,
systems and methods are provided which enable traders to
participate in anonymous trading while monitoring their
counterparty risk. Monitoring of counterparty risk by a trader is
facilitated by allowing the trader to set counterparty switches
that indicate counterparties with which the trader does not want to
trade, by allowing the trader to specify warning limits for those
traders with which the trader does want to trade, and by allowing
the trader to specify how over-warning-limit pending trades are to
be processed. Once these selections have been made, display of
order submissions entered by a counterparty is controlled in
accordance with the counterparty switches entered by the
counterparty and each trader to which the order submission would be
displayed. For example, if the counterparty or a trader has
selected to set the counterparty switch for the other party to
"OFF," a bid entered by the counterparty would be correspondingly
displayed (e.g., in a special color), or not displayed at all, to
the trader. Upon a pending trade being initiated by the trader in
response to the order submission by the counterparty, the warning
limits for the trader and the counterparty may then be checked to
confirm that completion of the corresponding trade would not cause
any warning limits to be exceeded. In the event that the trade
would exceed one or more warning limits, then, based upon the
trader's and the counterparty's specifications of how each party
wants to process over-warning-limit pending trades, the trade may
be automatically executed in full, automatically executed for only
a within-warning-limit portion, automatically rejected, manually
executed in full, or manually executed for only the
within-warning-limit portion. Upon the occurrence of an
over-warning-limit pending trade, each party trader may then be
prompted to see if the trader wants to turn "OFF" the counterparty
switch for the other trade and thereby control display of
subsequent order submission by the other trader.
[0008] Although the present invention is described herein as being
used by "traders," it should be apparent that the term "trader" is
meant to broadly apply to any user of a trading system, whether
that user is an agent acting on behalf of a principal, a principal,
an individual, a legal entity (such as a corporation), etc., or any
machine or mechanism that is capable of placing and/or responding
to orders in a trading system.
BRIEF DESCRIPTION OF THE DRAWINGS
[0009] Further features of the invention, its nature and various
advantages will become more apparent from the following detailed
description of the invention, taken in conjunction with the
accompanying drawings, in which like reference characters refer to
like parts throughout, and in which:
[0010] FIG. 1 is a block diagram of one embodiment of hardware that
may be used to implement the present invention;
[0011] FIG. 2 is an illustration of a screen display that may be
presented in accordance with one embodiment of the present
invention;
[0012] FIG. 3 is an illustration of an interface that may be
presented in accordance with one embodiment of the present
invention;
[0013] FIG. 4 is a flow diagram of a process for configuring trader
workstations and processing bids and offers in accordance with one
embodiment of the present invention;
[0014] FIGS. 5A-5C are flow diagrams of a process for processing
hits and lifts (or takes) and reconfiguring trader workstations in
accordance with one embodiment of the present invention;
[0015] FIG. 6 is an illustration of an interface that may be used
to configure trader workstations in accordance with one embodiment
of the present invention;
[0016] FIG. 7 is an illustration of a prompt that may be used to
manually execute a partial trade in accordance with one embodiment
of the present invention;
[0017] FIG. 8 is an illustration of a prompt that may be used to
manually execute a full trade in accordance with one embodiment of
the present invention; and
[0018] FIG. 9 is an illustration of a prompt that may be used to
reconfigure trader workstations in accordance with one embodiment
of the present invention.
DETAILED DESCRIPTION OF THE INVENTION
[0019] The present invention is now described in connection with
FIGS. 1-9. Although the present invention is described below in
connection with a bid/offer, hit/take trading system, it should be
apparent to one of ordinary skill in the art that the control of
the display of information, the monitoring of warning limits, and
the prompting of a user regarding the subsequent display of the
information in accordance with the present invention may be used
with any other suitable trading, information display, and/or data
processing system.
[0020] Turning first to FIG. 1, an example of hardware 100 that may
be used to implement one embodiment of the present invention is
shown. As illustrated, hardware 100 may include one or more local
workstations 102 and one or more remote workstations 104 that may
be used by traders to view trading data and enter trading commands.
Workstations 102 and 104 may be any suitable means for presenting
data and, in preferred embodiments of this invention, accepting
input. For example, workstations 102 and 104 may be personal
computers, laptop computers, mainframe computers, dumb terminals,
data displays, Internet browsers, Personal Digital Assistants
(PDAs), two-way pagers, wireless terminals, portable telephones,
etc., or any combination of the same.
[0021] To orchestrate trading between traders using workstations
102 and 104, the workstations preferably submit commands to, and
receive data to be displayed from, a processor 106. In alternative
embodiments, however, workstations may communicate with additional
processors, or include processors to orchestrate trading in a
distributed fashion without requiring processor 106. In yet other
embodiments, processor 106 may be connected to an external trading
system (not shown) that controls trading by the traders. Processor
106, and any additional processors, may be any suitable circuitry
or devices capable of processing data such as microprocessors,
personal computers, network servers, mainframe computers, dedicated
computer systems, etc.
[0022] As shown, processor 106 may be connected to workstations 102
and 104 by networks 108 and 110, respectively. Each of networks 108
and 110 may be any suitable data network for communicating data
between workstations 102 and 104 and processor 106, such as a local
area network, a wide area network, the Internet, an intranet, a
wireless network, a hard wired connection, a dial-up network, etc.,
or any combination of the same. In an arrangement of hardware 100
without processor 106, workstations 102 and 104 may be linked
together by networks 108 and 110 directly.
[0023] As also shown in FIG. 1, a telephone network 120 may be
provided that comprises a local telephone 122 and a remote
telephone 124 connected by a telephone line 126. Telephone network
120 may be used to enable a trader at a remote location to
communicate with an operator at a workstation 102 or 104. This may
be useful when the trader does not have access to a workstation 102
or 104 or when the trader only has access to a display-only
workstation 102 or 104. Obviously, telephone network 120 may be
implemented as a private telephone network, a public telephone
network, a wireless telephone network, or any suitable combination
of the same.
[0024] When used to implement a bid/offer, hit/take trading system
as described above or connect to an external bid/offer, hit/take
trading system, hardware 100 may enable a trader to submit a bid to
buy, or an offer to sell, an item at one of workstations 102 and
104. This bid or offer may then be communicated to processor 106,
where the bid or offer can be ranked and stored in a bid-offer
queue. The ranking may be based upon time of submission, price, or
any other suitable criterion. The bid or offer may then be
presented to other traders via other workstations 102 and 104
dependent upon its ranking in the bid-offer queue. Once displayed,
the bid or offer can then be hit or taken by one or more of the
other traders so that a trade of the item can proceed to
execution.
[0025] An example of a display 200 for presenting a bid and offer
201 to a trader is shown in FIG. 2. As illustrated, bid and offer
201 may include portions indicating a description of the underlying
instrument 202, a bid price 204, an offer price 206, a bid size
208, and an offer size 210. In accordance with the present
invention, these portions of bid and offer 201 may be highlighted
with one or more colors, or in any other suitable manner, to
indicate various traits of the bid and offer. For example, portions
204 and 208 may be colored red to indicate that the counterparty
switch of the bidder has been turned off by the trader and, thus,
is not tradable by the trader.
[0026] Turning to FIG. 3, an interface 300 is shown that may be
used to submit and respond to bids and offers presented in display
200 in accordance with the present invention. Interface 300 may be
presented on a trader's workstation in response to the trader
clicking on any of portions 202, 204, 206, 208, and 210 of bid and
offer 201. When presented, interface 300 may then indicate
information about the bid and offer clicked-on by the trader in a
display 301. As shown, for example, upon the trader clicking on
portion 204 of bid and offer 201, interface 300 may be presented
with the instrument "usg 05Y" indicated in display 301. Display 301
may also indicate the current bid price for the instrument (i.e.,
"99.12+") and the current bid size for the instrument (i.e.,
"10").
[0027] As also shown in FIG. 3, a variety of buttons and entry
fields may be incorporated into interface 300. At the center of
interface 300, a numeric keypad 302 is displayed. As illustrated,
numeric keypad 302 provides buttons for numbers zero through nine,
ten, twenty-five, fifty, and one hundred. Numeric keypad 302 also
contains a plus button ("+"), a minus button ("-"), a decimal point
button ("."), a backspace button ("BKS"), and a delete button
("DEL"). Interface 300 also provides a buy button 304, a sell
button 306, a cancel buy button 308, a cancel sells button 310, a
bid button 312, an offer button 314, a cancel bids button 316, a
cancel offers button 318, cancel all buttons 320, cancel all for
all instruments buttons 322, a price entry field 324, price up and
down buttons 326, bid price up and down buttons 328, offer price up
and down buttons 334, a size entry field 330, and size up and down
buttons 332.
[0028] In order to submit a bid or offer for the instrument
indicated in display 301 using interface 300, a trader may first
set a bid or offer price and a bid or offer size by entering the
appropriate values in fields 324 and 330, respectively, using up
and down buttons 326, 328, 332, and/or 334 and/or using keypad 302.
Once the desired price and size for the bid or offer have been
specified, the trader may then submit the bid or offer by pressing
bid button 304 or the offer button 314.
[0029] In order to hit a bid or lift (or take) an offer for the
instrument indicated in display 301 using interface 300, a trader
may first specify a size in field 330 using up and down buttons 332
and/or 334 and/or using keypad 302. Once the desired size has been
specified, the trader may then hit the bid or lift (or take) the
offer for the specified size by pressing sell button 306 or buy
button 304, respectively.
[0030] In the event that a trader desires to cancel a bid, an
offer, a hit, or a lift (or take), the trader may press any
corresponding one of buttons 308, 310, 316, 318, 320, and 322.
[0031] Turning to FIG. 4, a process 400 for configuring a
workstation 102 and 104 (FIG. 1) and processing bids and offers
that may be executed in processor 106 (FIG. 1) in accordance with
one embodiment of the present invention is shown. As illustrated at
step 402, process 400 first allows a trader to select how the
workstation is to react when a bid or offer is hit or lifted,
respectively, and execution of that trade would exceed a warning
limit of one of the traders in the trade. The workstation may be
configured to automatically accept the full trade, automatically
accept only the part of the trade that would not exceed the warning
limits of both traders, automatically reject the whole trade,
manually accept the full trade after prompting the trader, or
manually accept only the part of the trade that would not exceed
the warning limits of both traders after prompting the trader. As
indicated in FIG. 4, the options of manually accepting the full
trade and manually accepting only part of the trade may not be
available at workstations 102 or 104 in order to speed trading,
simplify trading, or limit decision making by traders with respect
to counterparty risk. Alternatively, the manual options may be
available and the automatic options may not be available in some
embodiments of the invention.
[0032] Referring to FIG. 6, an example of an interface 600 that
facilitates selection of one of these options is shown. As
illustrated, by selecting one of the options from drop-down menu
602, a trader can select how the workstation is to react when
execution of a trade would exceed a warning limit of at least one
of the traders. Although this selection is shown in interface 600
as being made by selecting one of the options from drop-down menu
602, selection of one of these options may be made in any suitable
manner.
[0033] Turning back to FIG. 4, process 400 next enables each trader
to set counterparty switches for the other traders at step 404.
These counterparty switches enable a trader to indicate whether the
trader wants to be able to trade with each other trader. A trader
may indicate that the trader does not want to trade with another
trader, for example, because the other trader backed out of a trade
on a previous occasion, because the other trader trades only in
small sizes, or for any other suitable reason.
[0034] As can be seen in FIG. 6, a trader trading at a workstation
102 or 104 on behalf of Institution A may select whether to trade
with counterparty institutions by selecting which of check boxes
604, 606, 608, 610, and 612 to check. Where a check box is checked,
the corresponding institution is preferably set to "ON" so that
bids and offers from that institution are presented to the
trader.
[0035] As shown in FIG. 4, once a trader has set the counterparty
switches for the other traders, the trader at step 406 may
optionally set warning limits for each counterparty having a
counterparty switch that is set to "ON." Through interface 600 of
FIG. 6, for example, the trader may set warning limits by
specifying values in fields 614, 616, 618, 620, 622, 624, 626, 628,
630, and/or 632. These values may be a total dollar amount of buy
and sell side transactions, a total dollar amount of buy side only
transactions, a total dollar amount of sell side only transactions,
a count of the total number of buy and sell side transactions, a
count of the total number of buy side only transactions, a count of
the total number of sell side only transactions, any other suitable
values or combinations of values that are related to order
submission of the counterparty and/or any other characteristic of
the trader, or any other suitable values or combinations of values
that are independent of order submissions of the counterparty and
any other characteristic of the trader. Although interface 600 is
illustrated with fields 614, 616, 618, 620 and 622 in a buy column
634 and fields 624, 626, 628, 630, and 632 in a sell column 636,
the present invention may be implemented with only a single column
for total buy and sell transactions or for only one of buy and sell
transactions.
[0036] Although steps 402, 404 and 406 are illustrated in process
400 of FIG. 4 in a specific order, these steps may be executed in
any suitable order or in parallel if desired.
[0037] After a trader has specified warning limits at step 406 of
FIG. 4, process 400 next waits for new bids and offers to be
entered at step 408. As explained above, bids and offers may be
entered at workstations 102 or 104 using an interface 300 as
illustrated in and described in connection with FIG. 3. Once a new
bid or offer has been entered, process 400 next receives the bid or
offer at step 410. At step 412, process 400 then determines whether
the counterparty switches both to and from the passive side (i.e.,
the counterparty submitting the bid or offer that was received at
step 410) are set to "ON." If both the counterparty switches to and
from the passive side are set to "ON," process 400 then displays
the bid or offer as available (i.e., a bid or offer that the trader
may hit or take (or lift)) at step 414. Otherwise, process 400
displays the bid or offer as not available or does not display the
bid or offer at all at step 416. A bid or offer may be displayed as
being available or not available by displaying the bid or offer in
a corresponding color (e.g., available bids or offers in green and
unavailable bids or offers in red), by displaying the bid or offer
in a corresponding font (e.g., available bids or offers in bold and
unavailable bids or offers in italics), by flashing or not flashing
the bid or offer (e.g., available bids or offers flashing and
unavailable bids or offers/not flashing), by only displaying a bid
or offer if it is available, or in any other suitable manner.
[0038] Turning now to FIGS. 5A-5C, a process 500 for processing
hits and lifts (or takes) in response to available bids and offers
that may be executed in processor 106 (FIG. 1) in accordance with
preferred embodiments of the present invention is shown. As
explained above, hits and lifts (or takes) may be entered using
interface 300 illustrated in and discussed in connection with FIG.
3, for example. Process 500 begins by waiting for a hit or lift (or
take) to be entered on an available bid or offer at step 504. Once
a hit or lift is received, process 500 receives the new hit or lift
at step 506. The bid or offer for which the hit or lift was
received is then set to inactive at step 508. The bid or offer is
set to inactive in order to prevent the bid or offer from being hit
or lifted by another trader while process 400 is determining
whether execution of the trade corresponding to the hit or lift of
the bid or offer can be executed.
[0039] Next, at step 510, process 500 checks the warning limits for
each of the traders in the trade. In the case where both a buy side
warning limit and a sell side warning limit is specified by a
trader, step 510 will first select the appropriate limit for each
trader. For example, if a trader A hits a bid by a trader B, and
traders A and B both set up both a buy side warning limit and a
sell side warning limit, for trader A, the sell side warning limit
will be checked and for trader B, the buy side warning limit will
be checked. In the event where no sell side warning limit has been
set and a trader has hit a bid, or vice versa, the trade may be
treated as exceeding the warning limit check or as not exceeding
the warning limit check, as desired.
[0040] If the trade would not exceed the warning limit of either
trader, at step 512, process 500 branches to step 516 to execute
the trade and then loop back to step 504. Otherwise, if the trade
would exceed the warning limit of either trader, process 500
proceeds to step 520 (FIG. 5B) via links 514 and 518 (FIG. 5B).
[0041] At step 520, process 500 then determines if either trader
selected automatic rejection of the whole trade in configuring
workstations 102 and 104. If either trader did select automatic
rejection, then process 500 takes the AR branch and restores the
bid or offer to active at step 522 so that the bid or offer may be
acted upon by other traders. Once a bid or offer has been restored
to active at step 522, process 500 then proceeds to step 548 (FIG.
5C) via links 524 and 546 (FIG. 5C).
[0042] If neither trader is configured for automatic rejection,
then process 500 determines at step 526 whether both traders
selected automatic acceptance of only part of the trade, or whether
one trader selected automatic acceptance of only part of the trade
and the other trader selected automatic acceptance of the full
trade. If not, process 500 proceeds to step 532. If so, process 500
takes the AP branch and at step 528 then splits the bid or offer
into a bid or offer for the size that would not exceed either
warning limit and a bid or offer for the remaining size. Process
500 then executes the bid or offer for the size that would not
exceed the warning limit at step 530, and proceeds to step 548
(FIG. 5C) via links 524 and 546 (FIG. 5C).
[0043] At step 532, process 500 inquires whether both traders are
configured for automatic acceptance of the full trade. If so,
process 500 then takes the AF branch and executes the trade at step
530 and proceeds to step 548 (FIG. 5C) via links 524 and 546 (FIG.
5C). Otherwise, process 500 proceeds to step 534.
[0044] At step 534, process 500 determines whether either trader is
configured for manual acceptance of only part of the trade or
whether one trader is configured for automatic acceptance of only
part of the trade and the other trader is configured for manual
acceptance of the full trade. If yes, then process 500 takes the MP
branch and proceeds to step 536 whereupon each trader that is
configured for manual acceptance of either only part of the trade
or the full trade is asked whether that trader would like to
execute a partial trade. Such an inquiry may be made by presenting
a prompt 700 as shown in FIG. 7. In response to this prompt, the
trader may select one of "YES" button 702 or "NO" button 704. In
the event that a prompted trader does not respond to prompt 700
within a given period of time, prompt 700 may automatically select
one of button 702 and button 704 in order to prevent excessive
delays in trading.
[0045] Next, at step 538, process 500 determines whether each
trader prompted at step 536 elected to execute a partial trade. If
so, then process 500 branches to step 528 and performs that step
and the subsequent steps in process 500 as described above.
Otherwise process 500 branches to step 522 and performs that step
and the subsequent steps in process 500 as described above.
[0046] If process 500 determines at step 534 that neither trader is
configured for manual acceptance of only part of the trade and that
one trader is not configured for automatic execution of only part
of the trade and/or the other trader is not configured for manual
acceptance of the full trade, then process 500 takes the MF branch
and proceeds to step 540 whereupon each trader configured for
manual acceptance of the full trade is asked whether that trader
would like to execute the full trade. Such an inquiry may be made
by presenting a prompt 800 as shown in FIG. 8. In response to this
prompt, the trader may select one of "YES" button 802 or "NO"
button 804. Like prompt 700, in the event that a trader does not
respond to prompt 800 within a given period of time, prompt 800 may
automatically select one of button 802 and button 804 in order to
prevent excessive delays in trading.
[0047] Next, at step 544, process 500 then determines whether each
trader prompted at step 540 elected to execute the full trade. If
so, process branches to step 530 and performs that step and the
subsequent steps in process 500 as described above. Otherwise,
process 544 branches to step 522 and performs that step and the
subsequent steps in process 500 as described above.
[0048] Although FIG. 5B illustrates a process 500 that tests for
and processes automatic rejection (AR), automatic partial
acceptance (AP), automatic full acceptance (AF), manual partial
acceptance (MP), and manual full acceptance (MP), the present
invention may be implemented without testing for these
configuration selections and only perform tests, and subsequent
processes, for configuration selections that are available.
[0049] Upon completing either step 522 or step 530, process 500
proceeds to step 548 (FIG. 5C) via links 524 and 546 (FIG. 5C) and
then displays a prompt asking the passive side trader if that
trader would like to turn off the counterparty switch for the
current counterparty (the aggressor). Such an inquiry may be made
by presenting the passive side trader with a prompt 900 as shown in
FIG. 9. In response to this prompt the passive side trader may
select one of "YES" button 902 and "NO" button 904. If the passive
side trader fails to respond to prompt 900 within a given period of
time, prompt 900 may automatically select one of button 902 and
button 904 in order to prevent excessive delays in trading.
[0050] Referring back to FIG. 5C, after performing step 548,
process 500 then determines at step 550 whether the passive side
trader elected to turn "OFF" the counterparty switch at step 548.
If so, then process 500 turns "OFF" the corresponding counterparty
switch at step 552. Once the switch has been turned "OFF" at step
552 or if the passive side trader did not elect to turn off the
counterparty switch, then process 500 displays a prompt to the
aggressive side trader asking whether the aggressive side trader
would like to turn "OFF" the counterparty switch corresponding to
the passive side trader. This prompt may be presented using prompt
900 of FIG. 9 similarly to the manner described above. If the
aggressive side trader elected to turn "OFF" the passive side
trader at step 554, process 500, at step 556, branches to step 558
whereupon the corresponding counterparty switch is set to "OFF."
Otherwise process 500 loops back to step 504 (FIG. 5A) via links
560 and 502 (FIG. 5A).
[0051] Those skilled in the art will appreciate that the present
invention can be practiced by other than the described embodiments,
which are presented for purposes of illustration and not of
limitation, and the present invention is limited only by the
claims.
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