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Risk mitigation in an electronic trading system

  • US 10,002,388 B2
  • Filed: 12/15/2014
  • Issued: 06/19/2018
  • Est. Priority Date: 12/31/2013
  • Status: Active Grant
First Claim
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1. A computer-implemented method comprising:

  • receiving, by an electronic trading system, a plurality of orders or quotes associated with a trading symbol and with a market participant, said electronic trading system comprising one or more specialized computers comprising a risk manager (RM) module embodied therein, said RM module comprising computer-readable instructions stored on a non-transitory computer readable storage medium and executed by at least one processor;

    continuously monitoring, by the RM module, electronic trades associate with the market participant;

    determining, by the RM module based on said continuous monitoring, that at least one from among the plurality of orders or quotes breaches a first threshold;

    automatically disabling, by the RM module, execution of any further trades associated with the trading symbol and the market participant on the electronic trading system;

    determining, by the RM module based on said continuous monitoring, that at least one other from among the plurality of orders or quotes does not breach said first threshold but breaches a secondary threshold;

    incrementing, by the RM module, a breach count associated with the secondary threshold;

    automatically disabling, by the RM module, execution of any further trades associated with the trading symbol and the market participant on the electronic trading system when the breach count of the secondary threshold exceeds a predetermined maximum; and

    generating and transmitting, by the RM module, a system alert immediately upon determining that at least one of the first and secondary thresholds is breached.

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