U.S. patent application number 13/555837 was filed with the patent office on 2013-05-30 for systems and methods for establishing first on the follow trading priority in electronic trading systems.
The applicant listed for this patent is Howard W. Lutnick, Joseph Noviello, Michael Sweeting. Invention is credited to Howard W. Lutnick, Joseph Noviello, Michael Sweeting.
Application Number | 20130138546 13/555837 |
Document ID | / |
Family ID | 38257105 |
Filed Date | 2013-05-30 |
United States Patent
Application |
20130138546 |
Kind Code |
A1 |
Lutnick; Howard W. ; et
al. |
May 30, 2013 |
SYSTEMS AND METHODS FOR ESTABLISHING FIRST ON THE FOLLOW TRADING
PRIORITY IN ELECTRONIC TRADING SYSTEMS
Abstract
Systems and methods for trading an item in an electronic trading
system are provided. The method preferably includes transitioning
the trading system from a first trading state to a second trading
state. Once the trading system has transitioned to the second
state, the method includes determining whether an existing order
qualifies for trading priority and/or exclusivity in the second
trading state with respect to an incoming contra order. This
determining of trading rights in the second trading state is
preferably based on the status of trading priority in the first
trading state and also a set of predetermined criteria with respect
to an incoming contra order in the second trading state. If the
existing order qualifies for trading priority, then the system
preferably presents the incoming contra order for trading
exclusively or semi-exclusively to the participant associated with
the existing order.
Inventors: |
Lutnick; Howard W.; (New
York, NY) ; Noviello; Joseph; (Summit, NJ) ;
Sweeting; Michael; (Aldershot, GB) |
|
Applicant: |
Name |
City |
State |
Country |
Type |
Lutnick; Howard W.
Noviello; Joseph
Sweeting; Michael |
New York
Summit
Aldershot |
NY
NJ |
US
US
GB |
|
|
Family ID: |
38257105 |
Appl. No.: |
13/555837 |
Filed: |
July 23, 2012 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
|
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11328814 |
Jan 9, 2006 |
8229832 |
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13555837 |
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Current U.S.
Class: |
705/37 |
Current CPC
Class: |
G06Q 40/04 20130101;
G06Q 40/00 20130101 |
Class at
Publication: |
705/37 |
International
Class: |
G06Q 40/04 20060101
G06Q040/04 |
Claims
1. A method for trading an item in an electronic trading system
comprising at least one computing device, the method comprising:
transitioning, by the at least one computing device, the trading
system from a first trading state to a second trading state,
wherein the first trading state comprises an active trading state
during which a plurality of participants at least one of negotiate
and trade the item therein, and wherein the second trading state
comprises a bid/offer state during which participants enter their
respective bids and offers; determining, by the at least one
computing device, whether an existing order having first on the
follow priority status at a conclusion of the first state qualifies
for trading priority in the second trading state with respect to an
incoming contra order received after the existing order, the
incoming contra order received from at least one workstation
coupled to the at least one computing device, the qualifying of
trading priority of the existing order in the second trading state
being based on the first one follow priority status of the existing
order at the conclusion of the first trading state and being based
on a set of predetermined criteria in the second trading state;
presenting, by the at least one computing device, the incoming
contra order for trading exclusively or semi exclusively to a
participant associated with the existing order based on the
existing order qualifying for trading priority in the second
trading state with respect to the incoming contra order.
2. The method for trading an item according to claim 1 wherein the
qualifying of trading priority of the existing order in the second
trading state comprises querying whether the existing order
satisfies a minimum size requirement.
3. The method for trading an item according to claim 1 wherein the
determining comprises querying whether the size of the existing
order exceeds a percentage of the size of the incoming contra order
and wherein the existing order is further qualified based on the
size of the existing order exceeding the percentage of the size of
the incoming order.
4. The method for trading an item according to claim 1 wherein the
determining comprises querying whether the existing order is within
a predetermined delta of the incoming contra order and wherein the
existing order is further qualified based on the size of the
existing order being within the predetermined delta.
5. The method for trading an item according to claim 1 wherein the
determining comprises querying whether the incoming contra order
satisfies a minimum size requirement and wherein the existing order
is further qualified based on the size of the incoming order
exceeding the minimum size requirement.
6. The method for trading an item according to claim 1 wherein the
determining comprises querying whether the size of the incoming
contra order exceeds a percentage of the size of the existing order
and wherein the existing order is further qualified based on the
size of the incoming order exceeding the percentage of the size of
the existing order.
7. The method for trading an item according to claim 1 wherein the
determining comprises querying whether the incoming contra order is
within a predetermined delta of the existing order and wherein the
existing order is further qualified based on the size of the
incoming order being within the predetermined delta.
8. A computer system for trading an item in an electronic trading
system, the computer system comprising: at least one computing
device; at least one memory having instructions stored thereon
which, when executed by the at least one computing device, direct
the at least one processor to perform a method comprising:
transitioning the trading system from a first trading state to a
second trading state, wherein the first trading state comprises an
active trading state during which a plurality of participants at
least one of negotiate and trade the item therein, and wherein the
second trading state comprises a bid/offer state during which
participants enter their respective bids and offers; determining
that an existing order having first on the follow priority status
at the conclusion of the first trading state qualifies for trading
priority in the second trading state with respect to an incoming
contra order based on the first on the follow priority status of
the existing order at the conclusion of the first trading state and
based on the existing order satisfying a set of predetermined
criteria, the incoming order received after the existing order from
at least one workstation coupled to the at least one computing
device; and presenting the incoming order for trading exclusively
to a participant associated with the existing order based on the
existing order qualifying for trading priority in the second
trading state with respect to the incoming contra order.
9-22. (canceled)
23. A method for trading an item in an electronic trading system,
the method comprising: identifying, by at least one computing
device, a current order; receiving, by the at least one computing
device an incoming contra order; determining, by the at least one
computing device, whether the current order possesses exclusive
privileges to be traded with the incoming contra order, in which
the act of determining whether the current order possesses
exclusive trading privileges to be traded with the incoming contra
order comprises determining that the current order does possess
exclusive trading privileges to be traded with the incoming contra
order; determining that a second order exists in the system and
includes an indication to trade with the incoming contra order if
the current order declines to trade with the incoming contra order;
and based on the act of determining that the current order does
possess exclusive trading privileges to be traded with the incoming
contra order and the act of determining that a second order exists
in the system and includes an indication to trade with the incoming
contra order if the current order declines to trade with the
incoming contra order, executing, by the at least one processor, a
trade between the incoming contra order and the current order.
24. The method of claim 1, wherein the participant associated with
the existing order traded the item with exclusivity during at least
a portion of the first trading state and wherein the existing order
is further qualified based on determining that the participant
traded with exclusivity during at least a portion of the first
trading state.
25. The method of claim 1, further comprising: determining by the
at least one computing device that a price of the received contra
order is within a predetermined delta of a price of the best order;
and wherein determining that the participant has the right to trade
exclusively against the received contra order comprises determining
that the participant has the right to trade exclusively against the
received contra order based at least in part on determining that
the price of the received contra order is within the predetermined
delta of the price of the best order.
26. The method of claim 1, wherein the orders pending at the
conclusion of the first trading state comprise bids pending at the
conclusion of the first trading state; and wherein the existing
order comprises a best bid having a best price from among the
pending bids; and wherein the received contra order comprises an
offer.
27. The method of claim 1, further comprising: based at least in
part on the act of presenting, automatically modifying by the at
least one computing device the existing order, wherein modifying
the existing order does not affect the potential trading priority
of the existing order.
28. The method of claim 27, wherein modifying the existing order
comprises at least one of: modifying a size of the existing order
and modifying a price of the existing order.
29. The method of claim 27, wherein the existing order comprises a
bid; and wherein modifying the existing order comprises at least
one of reducing a size of the bid and reducing a price of the
bid.
30. The method of claim 27, wherein the at least one computing
device automatically modifies the best order based at least in part
on instructions preset by the participant.
31. The method of claim 27, wherein the at least one computing
device automatically modifies the best order based at least in part
on a preset default of the at least one computing device.
32. The method of claim 1, wherein the existing order comprises (i)
a hidden size not shown to other participants and (ii) a displayed
size shown to other participants; and wherein the hidden size and
the displayed size are considered in determining that the size of
the best order satisfies the minimum size requirement.
33. The method of claim 1, wherein the best order comprises (i) a
hidden size not shown to other participants and (ii) a displayed
size shown to other participants; and wherein only the displayed is
considered in determining that the size of the best order satisfies
the minimum size requirement.
34. The method of claim 1, wherein the at least one computing
device automatically executes the trade against the received contra
order based at least in part on instructions preset by the
participant.
Description
[0001] The present invention relates to electronic systems and
methods for obtaining trading exclusivity and/or trading priority
in electronic trading systems.
BACKGROUND OF THE INVENTION
[0002] In electronic trading systems that include bids and offers
for items, a bid or offer that is entered by a participant may
typically be entered as available (referred to alternatively
hereinafter as "clear") to trade to other participants.
Nevertheless, certain known trading systems may restrict the
availability to certain participant(s) under certain conditions.
For example, a Bid/Offer may be available only to the current
market participants, i.e., those with current commitments
(bids/offers). Accordingly, preferably only those customers with
current participation can hit or lift these incoming entries. Such
bids/offers may be considered unclear--i.e., not available to all
trading participants.
[0003] In one type of trading system, the uncleared bids become
available to participants other than the current participants only
after a preset or predetermined time interval has expired (tracked
by a internal system clock or other suitable device).
[0004] One criteria that may affect order priority--e.g., the
exclusive right of certain participants to trade on incoming
orders--is the respective priority of participants following the
transition from a first trading state to a second trading state.
For the purposes of this application, a trading state is defined as
a set of rules or conditions that govern the interaction between
trading participants.
[0005] It would be desirable to provide systems and methods that
further define the rules or conditions that govern the interaction
between trading participants when the system transitions from one
trading state to a second trading state.
SUMMARY OF THE INVENTION
[0006] It would be desirable to provide systems and methods that
further define the rules or conditions that govern the interaction
between trading participants when the system transitions from one
trading state to a second trading state.
[0007] Systems and methods for trading an item in an electronic
trading system are provided. A method according to the invention
preferably includes transitioning the trading system from a first
trading state to a second trading state. Once the trading system
has transitioned to the second state, the method includes
determining whether an existing order qualifies for trading
rights--i.e., trading priority and/or exclusivity--in the second
trading state. This determining of trading rights in the second
trading state is preferably based on the status of trading rights
in the first trading state and also a set of predetermined criteria
with respect to an incoming contra order--i.e., an order on the
other side of a trade or active market (e.g., a bid is contra to an
offer or other instruction to sell, an offer is contra to a bid or
instruction to buy)--in the second trading state. If the existing
order qualifies for trading rights, then the system preferably
presents the incoming contra order for trading exclusively or
semi-exclusively to the participant associated with the existing
order.
BRIEF DESCRIPTION OF THE DRAWINGS
[0008] Further features of the invention, its nature and various
advantages will be apparent from the following detailed description
of the preferred embodiments, taken in conjunction with the
accompanying drawings, in which like reference characters refer to
like parts throughout, and in which:
[0009] FIG. 1 is an illustration of an electronic implementation of
a system in accordance with some embodiments of the present
invention;
[0010] FIG. 2 is an illustration, in greater detail, of an
electronic implementation of a system in accordance with some
embodiments of the present invention;
[0011] FIG. 3 is an illustration of an electronic trading interface
in accordance with some embodiments of the present invention;
and
[0012] FIGS. 4-11 are flowcharts of various methods according to
the invention.
DETAILED DESCRIPTION OF THE INVENTION
[0013] In one aspect of the invention, trading rules according to
the invention disclosed herein relate to being
"first-on-the-follow". These first-on-the-follow rules relate to
the respective priority of participants following the transition
from a first trading state to a second trading state (for the
purposes of this application, a trading state is defined as a set
of rules or conditions that govern the interaction between trading
participants--transition from one trading state to a second trading
state signifies transitioning from one set of rules or conditions
to a second set of rules or conditions). First-on-the-follow rules
relate in large part to identifying the participant that will have
the right to trade exclusively (semi-exclusively)--i.e., the
exclusive bidder on incoming offers and the exclusive offeror on
incoming bids--at the commencement of the new state. It should be
noted that in some embodiment of the invention, the first on the
follow participant may be granted exclusive or semi-exclusive
rights, depending on the rules of the trading system. Any
references herein, or in the figures, to exclusive rights should be
understood to refer to either an exclusive or semi-exclusive set of
rights.
[0014] Typically, first-on-the-follow priority rights are obtained
by the participants identified as the best bidder and the best
offeror (the term best being defined as highest bidder/buyer with
respect to price/time priority and lowest offeror/seller with
respect to price/time priority) at the conclusion of the first
trade state. In first-on-the-follow rules according to the
invention, participants that were previously identified as the best
bidder and best offeror at the conclusion of the first trade state
may only obtain the first-on-the-follow rights in the second trade
state if the best bidder and the best offeror satisfy either a
certain minimum order size requirement, are within a certain
predetermined delta (as described in more detail below) of the best
bidder and the best offeror, respectively, or satisfy a combination
of the minimum order size requirement and the predetermined delta
restriction.
[0015] Alternatively, an additional restriction with respect to
obtaining first-on-the-follow rights may relate to the amount
purchased or sold during the first trade state by the prospective
first-on-the-follow participant. It should be noted that
first-on-the-follow rights may obtain a particular advantage for
the participant at least because these rights, in some embodiments
of the invention, may entitle the participants to priority with
respect to any incoming orders at the commencement of the second
trading state.
[0016] With respect to hidden size, as described below, a
participant's hidden size may be considered in satisfying the
participant's minimum size requirement for obtaining
first-on-the-follow rights.
[0017] In yet another rule according to the invention, if a
participant satisfies first-on-the-follow requirements, then the
participant may have a preset instruction to the system to either
reduce his bid by a predetermined increment or increase his offer
by an increment in the second trading state. Preferably, the
respective increase or decrease reduces his exposure to an incoming
order while maintaining his first-on-the-follow position, and the
trading privileges, such as, for example, the exclusive right to
trade against incoming orders, associated therewith. Alternatively,
exposure may be reduced by reducing the size of the first on the
follow order.
[0018] In an alternative embodiment, the order that is first on the
follow should preferably be within a predetermined delta of the
best contra order, or the incoming order should preferably satisfy
some combination of the threshold size and the predetermined delta
in order to only be shown to or, alternatively, to only be
available to be traded by, select participants that are first on
the follow.
[0019] With respect to yet another embodiment of the invention,
hidden size--i.e., a portion of the order that is not shown to the
rest of the participants, but, if acted upon, is tradable--may also
count toward satisfying the minimum size requirement of the order
either as the first on the follow order or the current order in the
system.
[0020] Yet another aspect of the invention provides rules
associated with a method that restricts all incoming orders to a
select number of traders. For example, the exclusive bidder or
offeror preferably has an option to exclusively trade on an
incoming order, although another participant is behind the
exclusive bidder or offeror and has the ability to indicate a
willingness to hit the incoming bid or lift the incoming offer if
the exclusive bidder or offeror refuses to act on the incoming
order. In one rule according to the invention, the exclusive bidder
or offeror may preferably set, or have set, his respective default
position to trade on an incoming bid or offer when there is another
participant who has indicated a willingness to hit the incoming bid
or lift the incoming offer. Thus, the default position becomes a
"take when (another party has indicated that he is willing . . . )
take" or "hit when (another party has indicated that he is willing
. . . ) hit."
[0021] This rule may preferably be implemented in at least a state
where bids and offers are posted--i.e., a bid/offer state--as well
as a state wherein trades actually occur and bids and offers are
matched.
[0022] It should be noted that the default position described
herein for the take-when-take or hit-when-hit order may preferably
be further restricted to only act when the incoming order is a
predetermined delta, as described in more detail above, from the
headline price (see element 304 in FIG. 3) in bid/offer state, or
the trading price in the state in which matches occur.
[0023] Referring to FIG. 1, exemplary system 100 for implementing
the present invention is shown. As illustrated, system 100 may
include one or more workstations 101. Workstations 101 may be local
or remote, and are connected by one or more communications links
102 to computer network 103 that is linked via communications links
105 to server 104. Server 104 is linked via communications link 110
to back office clearing center 112.
[0024] In system 100, server 104 may be any suitable server,
processor, computer, or data processing device, or combination of
the same. Server 104 and back office clearing center 112 may form
part of the electronic trading system. Furthermore, server 104 may
also contain an electronic trading system and application
programming interface and merely transmit a Graphical User
Interface or other display screens to the user at the user
workstation, or the Graphical User Interface may reside on
Workstation 101.
[0025] Computer network 103 may be any suitable computer network
including the Internet, an intranet, a wide-area network (WAN), a
local-area network (LAN), a wireless network, a digital subscriber
line (DSL) network, a frame relay network, an asynchronous transfer
mode (ATM) network, a virtual private network (VPN), or any
combination of any of the same. Communications links 102 and 105
may be any communications links suitable for communicating data
between workstations 101 and server 104, such as network links,
dial-up links, wireless links, hard-wired links, etc.
[0026] Workstations 101 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, programmed
computers having memory, the programmed computer using the memory
for implementing trading models, etc., or any combination of the
same. Workstations 102 may be used to implement the electronic
trading system application and application programming interface
according to the invention.
[0027] Back office clearing center 112 may be any suitable
equipment, such as a computer, a laptop computer, a mainframe
computer, etc., or any combination of the same, for causing
transactions to be cleared through a clearinghouse and/or verifying
that transactions are cleared through a clearinghouse. (This
clearing is not to be confused with being clear to trade, which is
defined in more detail above.) Communications link 110 may be any
communications links suitable for communicating data between server
104 and back office clearing center 112, such as network links,
dial-up links, wireless links, hard-wired links, etc.
[0028] The server, the back office clearing center, and one of the
workstations, which are depicted in FIG. 1, are illustrated in more
detail in FIG. 2. Referring to FIG. 2, workstation 101 may include
processor 201, display 202, input device 203, and memory 204, which
may be interconnected. In a preferred embodiment, memory 204
contains a storage device for storing a workstation program for
controlling processor 201. The storage device may include software
stored on a suitable storage medium such as a disk. Memory 204 also
preferably contains an electronic trading system application 216
according to the invention.
[0029] Electronic trading system application 216 may preferably
include application program interface 215, or alternatively, as
described above, electronic trading system application 216 may be
resident in the memory of server 104. In this embodiment, the
electronic trading system may contain application program interface
215 as a discrete application from the electronic trading system
application which also may be included therein. The only
distribution to the user may then be a Graphical User Interface
which allows the user to interact with electronic trading system
application 216 resident at server 104.
[0030] Processor 201 uses the workstation program to present on
display 202 electronic trading system application information
relating to market conditions received through communication link
102 and trading commands and values transmitted by a user of
workstation 101. Furthermore, input device 203 may be used to
manually enter commands and values in order for these commands and
values to be communicated to the electronic trading system.
[0031] FIG. 3 shows an illustrative trading interface 300.
Interface 300 is preferably for interactive trading and is adapted
for implementing systems and methods according to the present
invention. The interface includes a top line 301 (alternatively
referred to herein as the touch line, or the headline.) Top line
301 may preferably be adapted to include the price that should be
initially aggressed to start a trade or, alternatively, top line
301 may show the status of the actual aggressed trade. In either
case, top line 301 is typically located at the top of the quad
(quad being defined for purposes of this application as the display
area related to trading of a particular instrument.) Top line 301
may include item 302, price 304, size 306 and last price 308.
Interface 300 also includes market depth information 310, which
shows price and size for items that have not yet been traded
(commonly referred to as the order book, or, simply, the book).
Also shown in interface 300 are bid and offer stacks 312 and 314,
respectively. Bid and offer stacks 312 and 314 may indicate the
size of one or many market participants that are bidding or
offering at the current price 304. Note that price 304 in this
exemplary example is shown in a traditional United States
Government Bond pricing format.
[0032] Typically, an incoming order that is not clear to trade is
indicated by a visual indicator--e.g., an asterisk preferably
adjacent to the price associated with the new order (See, asterisk
adjacent to price 304 in FIG. 3). In the embodiment shown in FIG.
3, in the particular circumstance where only a portion of an order
is not cleared to trade, a visual indicator may be displayed in bid
and offer stacks 312 and 314 adjacent the volume of the partially
cleared order to indicate that only a portion of the order is
cleared to be traded, or in some other suitable location which
differentiates the partially cleared order from the totally
uncleared order or from the totally clear order.
[0033] FIG. 4 is a flow chart that describes one embodiment of a
method according to the invention. Step 402 shows that the trading
system transitions from a first state to a second state. The
interface in FIG. 3 may show a trading state such as a bid/offer
state in which participants enter their respective bids and offers.
Other states may include a trading state wherein certain of the
participants may engage in trading and subsequent negotiations
associated therewith. These and other exemplary states are
described in detail in U.S. Pat. No. 6,560,580 which is hereby
incorporated by reference in its entirety. Following the conclusion
of activity or other termination of the trading state that allows
trading and negotiation between participants, the system may
transition to a bid/offer state or to some other suitable trading
state. As such, the trader with first on the follow priority may
enjoy exclusive trading rights to trade on incoming contra orders
when the system transitions a trading state to bid/offer state.
[0034] Step 404 queries whether a first on the follow order in the
system satisfies a minimum size requirement. Step 406 shows that,
if the first on the follow order satisfies the minimum size
requirement, then the participant associated with the first on the
follow order is rewarded with exclusive rights to trade against the
incoming contra order (assuming, in certain embodiments, that the
incoming order has price/time priority over other current orders
and that the incoming order also satisfies the minimum size
requirement, see FIGS. 7-9, and the corresponding text).
[0035] It should be noted that each of FIGS. 4-9 share similar
steps X02, X06, and X08. The FIGs. are differentiated, for the most
part, based on the query step of X04 in which each flow chart
describes a unique query.
[0036] FIG. 5 is a flow chart describing another embodiment of a
method according to the invention. Query step 504 queries whether a
first on the follow order exceeds a percentage size of the incoming
order and also exceeds a minimum size requirement. If the first on
the follow order does satisfy the query, then the first on the
follow participant associated with the first on the follow order
may, under certain circumstances, be awarded an exclusive or
semi-exclusive right to trade with the incoming order.
[0037] FIG. 6 is a flow chart describing yet another embodiment of
a method according to the invention. Query step 604 queries whether
any first on the follow order is within a predetermined delta, as
described in more detail above, of the incoming bid or the incoming
offer. If the first on the follow order is within the predetermined
delta, then the first on the follow participant associated with the
first on the follow order may, under certain circumstances, be
awarded an exclusive or semi-exclusive right to trade with the
incoming order.
[0038] FIG. 7 is a flow chart describing still another embodiment
of a method according to the invention. Step 704 queries whether an
incoming order meets a minimum size to qualify for being clear only
to a first on the follow participant or group of participants. If
the incoming order meets the minimum size, then the incoming order
may be clear to the first on the follow participant or group of
participants.
[0039] FIG. 8 is a flow chart describing yet another embodiment of
a method according to the invention. Step 804 queries whether an
incoming order includes a volume that is a certain, preferably
predetermined, percentage (or other suitable metric) of the volume
of the first on the follow contra order, then the incoming order
may be clear to the first on the follow participant or group of
participants. If the incoming order is a certain percentage of the
first on the follow contra order, then the incoming order may be
clear to the first on the follow participant or group of
participants.
[0040] FIG. 9 is a flow chart describing another embodiment of a
method according to the invention. Step 904 queries whether an
incoming order is within a predetermined delta of the first on the
follow order. If the incoming order is within a predetermined delta
of the first on the follow contra order, then the incoming order
may be clear to the first on the follow participant or group of
participants.
[0041] It should be noted that each of the different query steps in
FIGS. 4-9 may be used simultaneously with one another to provide
multiple queries that are combined to determine whether any first
on the follow order or, alternatively, any incoming order, is
rewarded with exclusivity. Thus, the trading system may query
numerous different queries before a current participant associated
with a current order is awarded exclusive or semi-exclusive rights
to trade with an incoming order.
[0042] FIG. 10 shows a flow chart that includes step 1004 that
queries whether first on the follow rights have been obtained. If
first on the follow rights have been obtained by a participant,
then step 1006 teaches that either a pre-set system default, or a
participant-set feature, may reduce the first on the follow bid or
increase the first on the follow offer to preferably reduce
exposure to any incoming offer/bid, while maintaining the first on
the follow position, and the associated trading privileges.
Exposure may also be reduced by decreasing the size of the first on
the follow bid or offer. This reduction may be implemented
independently or together with a price adjustment as described
above.
[0043] FIG. 11 shows a flow chart of yet another feature of the
present invention. In this feature, step 1104 queries whether first
on the follow rights have been obtained by satisfying certain
criteria. If first on the follow rights have been obtained, then
step 1106 teaches that the electronic trading system is preferably
set by either the first on the follow trader or by a system default
to trade on an incoming bid or offer preferably only when there is
another participant who has indicated a willingness to hit the
incoming bid or take the incoming offer. The other participant is
preferably unable to hit the incoming bid or take the incoming
offer because he is behind, with respect to trading priority, the
first on the follow trader.
[0044] It should be noted that this particular feature is not
limited to first on the follow but, in fact, extends to any
suitable trading situation. Thus, any bid or offer could be placed
whereby the bid is only active if another bid, having inferior
trading rights because, for example, the inferior bid was later in
time, is at the same price and has indicated a willingness to
trade.
[0045] Thus, systems and method for defining criteria for obtaining
exclusive priority in electronic trading systems have been
provided. It will be understood that the foregoing is only
illustrative of the principles of the invention, and that various
modifications can be made by those skilled in the art without
departing from the scope and spirit of the invention.
* * * * *