System and method for electronic spread trading in real and synthetically generated markets

• US 10,185,992 B2
• Filed: 07/10/2015
• Issued: 01/22/2019
• Est. Priority Date: 12/04/2003
• Status: Active Grant

• Current Assignee: Trading Technologies International, Inc.
• Original Assignee: Trading Technologies International, Inc.
• Inventors: Fishbain, Michael L.
• Primary Examiner(s): Kazimi, Hani M
• Application Number:
  US14/796,247
• Publication Number:
  US 20150339774A1
• Time in Patent Office: 1,292 Days
• Field of Search: 705 35- 37
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A system and method are provided to analyze synthetic and real markets that offer interchangeable tradeable objects to find market opportunities that a trader may capitalize on. A synthetic market is an electronic market created out of real markets by a computer terminal or gateway. A real market is an electronic market that is offered by an electronic exchange. If a desirable market opportunity is found, the preferred embodiments can take action such as by sending orders to either one of the markets, or by sending orders to both markets. An advantage of the preferred embodiments, among many others, is that they can make “invisible” trading opportunities more readily apparent.

Claims

1. A non-transitory computer readable medium having stored therein instructions executable by a processor, wherein the instructions are executable to:

determine a first price for which a spread can be bought or sold in a first spread market and a second price for which the spread can be bought or sold in a second spread market, wherein the spread is associated with a first real market and a second real market, wherein the first and second real markets are offered by at least one electronic exchange, wherein the first spread market and the second spread market offer interchangeable tradeable objects, wherein the first spread market is a synthetic spread market that is generated outside of an electronic exchange and associated with the first real market and the second real market, wherein the second spread market is an exchange-provided spread market that is also associated with the first real market and the second real market;

determine, in response to receiving a command to buy or sell the spread, whether to buy or sell in the first spread market, buy or sell in the second spread market, or buy or sell in both the first and second spread markets based on the determined first price and the determined second price; and

send, in response to receiving the command, one of;

a first spread market order for at least one of the first and second real markets when it is determined to buy or sell in the first spread market,

a second spread market order for the exchange-provided spread market when it is determined to buy or sell in the second spread market, or

a first spread market order for at least one of the first and second real markets and a second spread market order for the exchange-provided spread market when it is determined to buy or sell in both the first and second spread markets.

2. The computer readable medium of claim 1, wherein the instructions are further executable to:

receive a first data feed from an electronic exchange for the first real market;

receive a second data feed from an electronic exchange for the second real market; and

receive a third data feed from an electronic exchange for the exchange-provided spread market.

3. The computer readable medium of claim 2, wherein the instructions are further executable to:

generate the synthetic spread market from the first and second data feeds.

4. The computer readable medium of claim 1, wherein at least one of the first price and the second price is determined based on a quantity available.

5. The computer readable medium of claim 1, wherein the command is a manual instruction from a user input device.

6. The computer readable medium of claim 1, wherein the command is an automatic instruction from an automated trading tool.

7. The computer readable medium of claim 1, wherein the processor is included in a computer terminal.

8. The computer readable medium of claim 1, wherein the processor is included in a gateway.

9. The computer readable medium of claim 1, wherein the processor is part of a cluster of computing devices.

10. The computer readable medium of claim 1, wherein the first real market is at the same electronic exchange as the second real market.

11. The computer readable medium of claim 1, wherein the first real market is at a different electronic exchange than the second real market.

12. The computer readable medium of claim 1, wherein the instructions are executable to determine to buy or sell in the first spread market when the determined first price is better than the determined second price.

13. The computer readable medium of claim 1, wherein the instructions are executable to determine to buy or sell in the second spread market when the determined second price is better than the determined first price.

14. The computer readable medium of claim 1, wherein the instructions are executable to determine whether to buy or sell in the first spread market, buy or sell in the second spread market, or buy or sell in both the first and second spread markets based on quantity available in at least one of the first spread market and the second spread market.

15. The computer readable medium of claim 1, wherein the instructions are further executable to:

send a message to delete a portion of the first spread market order when a partial fill is received for the second spread market order; and

send a message to delete a portion of the second spread market order when a partial fill is received for the first spread market order.

16. The computer readable medium of claim 1, wherein the interchangeable tradeable objects include semi-interchangeable tradeable objects.

17. The computer readable medium of claim 1, wherein the instructions are executable to determine the at least one of the first spread market and the second spread market based at least in part on a user input.