Methods and apparatus to internalize trade orders

• US 10,565,646 B2
• Filed: 08/05/2015
• Issued: 02/18/2020
• Est. Priority Date: 08/05/2015
• Status: Active Grant

• Current Assignee: Trading Technologies International, Inc.
• Original Assignee: Trading Technologies International, Inc.
• Inventors: Brookfield, Bevan Jacob
• Primary Examiner(s): Niquette, Robert R
• Application Number:
  US14/819,019
• Publication Number:
  US 20170039642A1
• Time in Patent Office: 1,658 Days
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

Methods and apparatus to internalize trade orders are described herein. An example method includes obtaining, via an internalization manager, a trade order communicated to an exchange. The trade order corresponds to a tradeable object offered at the exchange. The example method includes comparing, via the internalization manager, the trade order to one or more trade orders in an internalization order record to determine whether a matching contra-side trade order is included in the one or more trade orders in the internalization order record. The example method includes communicating, via the internalization manager, an order modification to the exchange if a matching contra-side trade order is included in the one or more trade orders in the internalization order record, and matching, via the internalization manager, if a matching contra-side trade order is included in the one or more trade orders in the internalization order record, the trade order to the matching contra-side trade order in the internalization order record.

Claims

1. A method including:

receiving by a computing device a first message for a trade order, wherein the first message for the trade order was sent at substantially the same time as a second message for the trade order, wherein the second message for the trade order was sent to an exchange, wherein the first message for the trade order is received over a first communication path, wherein the second message for the trade order is sent to the exchange over a second communication path, wherein the first message for the trade order and the second message for the trade order are sent using multicast over the first communication path and the second communication path such that receiving the first message for the trade order does not introduce additional latency in the second message for the trade order being sent to the exchange;

identifying by the computing device a contra-side trade order based on the first message for the trade order in an internalization book, wherein the contra-side trade order is for an opposite side from a side for the trade order;

sending by the computing device a command to adjust the quantity of the trade order to the exchange based on a quantity of the contra-side trade order; and

executing by the computing device an internal trade of the trade order based on the contra-side trade order.

2. The method of claim 1, wherein the trade order is sent by a trading device.

3. The method of claim 1, wherein the first message for the trade order is received by a trade internalization manager.

4. The method of claim 1, wherein the contra-side trade order is identified based on a price of the trade order.

5. The method of claim 1, wherein the contra-side trade order is identified based on a quantity of the trade order.

6. The method of claim 1, wherein the contra-side trade order is for a same trader as the trade order.

7. The method of claim 1, wherein the contra-side trade order is for a same trading group as the trade order.

8. The method of claim 1, wherein the contra-side trade order is for a same institution as the trade order.

9. The method of claim 1, wherein the command to adjust the quantity of the trade order is a command to cancel the trade order.

10. The method of claim 1, wherein the command to adjust the quantity of the trade order is a command to modify the trade order.

11. The method of claim 1, further including:

receiving by the computing device a confirmation of the command to adjust the quantity of the trade order from the exchange, wherein executing the internal trade is further based on the confirmation from the exchange.

12. The method of claim 1, further including:

requesting by the computing device approval to execute the internal trade.