Directed order processing for automated market system

• US 20030009414A1
• Filed: 07/09/2001
• Published: 01/09/2003
• Est. Priority Date: 07/09/2001
• Status: Active Grant

• Current Assignee: Nasdaq, Inc.
• Original Assignee: Nasdaq OMX Group Incorporated (Nasdaq, Inc.)
• Inventors: Moran, Thomas P., Franks, Daniel B., Martyn, Peter, Malitzis, John, Ketchum, Richard G., Furbush, Dean
• Granted Patent: US 8,296,216 B2
• Time in Patent Office: Days
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

An electronic market for trading of securities includes a plurality of client stations for entering quotes for securities and a server process that receives quotes from the clients, aggregates the quotes and causes a total of all aggregated quotes to be displayed for a plurality of price levels on the client systems. The market uses a graphical user that depicts aggregated quotes in an aggregate window a plurality of price levels of a product traded in the market. The market also includes processes to handle lock/cross market conditions, match-off of order flow and provides a central quote/order collector that interfaces to disparate order delivery systems to minimize dual liability of market makers.

Claims

1. An electronic market system for trading of securities comprises:

a client station for entering a directed order to begin a negotiation process with a selected quoting market participant;

a server system receiving the directed order, the server system delivering the order, as a liability or non-liability order in accordance with how the selected quoting market participant chooses to receive directed orders.

2. The system of claim 1 wherein the quoting market participant is assigned a specific MMID.

3. The system of claim 2 wherein if a market participant chooses to accept liability orders, the system appends an indicator to the quoting market participant'"'"'s MMID, showing that the market participant is available to receive directed liability orders.

4. The system of claim 1 further comprising a second client station for entering nondirected orders that are orders for a security that is not sent/routed to a particular quoting market participant.

5. The system of claim 4 wherein the nondirected are stored in a non-directed order queue.

6. The system of claim 5 wherein directed orders are processed independent of the non-directed order queue.

7. The system of claim 5 wherein the server receives quotes from quoting market participants for a particular security with the quotes indicating a size.

8. The system of claim 5 wherein delivery of a directed order to a quoting market participant does not decrement the quote size of that quoting market participant for that security.

9. The system of claim 1 wherein if the quoting market participant to which the directed order is sent selects to receive liability directed orders, the directed order at the time of entry is designated as an “

All-or-None”

order (“

AON”

) that is at least one normal unit of trading in excess of an attributable quote/order of the quoting market participant to which the order is directed.

10. The system of claim 1 wherein if the quoting market participant to which the directed order is sent selects to receive liability directed orders, the directed order at the time of entry is designated as a “

Minimum Acceptable Quantity”

order (“

MAQ”

) with a value of at least one normal unit of trading in excess of Attributable Quote/Order of the Quoting Market Participant to which the order is directed.

11. The system of claim 1 wherein if the quoting market participant to which the directed order is sent selects to receive liability directed orders, the system determines if order otherwise qualifies as a non-liability order under market and/or regulatory rules.

13. The method of claim 12 wherein if the quoting market participant chose to accept liability orders, the method further comprises:

A appending an indicator to a quoting market participant'"'"'s MMID, which when displayed at a client station shows that the market participant is available to receive directed liability orders.

14. The method of claim 12 wherein if the quoting market participant to which a Directed Order is sent selects to receive liability directed orders, the method further comprises:

determining whether the order was designated at the time of entry as an “

All-or-None”

order (“

AON”

) that is at least one normal unit of trading in excess of an attributable quote/order of the quoting market participant to which the order is directed.

15. The method of claim 12 wherein if the quoting market participant to which a Directed Order is sent selects to receive liability directed orders, the method further comprises:

determining whether the order was designated at the time of entry as a “

Minimum Acceptable Quantity”

order (“

MAQ”

) with a value of at least one normal unit of trading in excess of an attributable quote/order of the quoting market participant to which the order is directed.

16. The method of claim 12 wherein if the quoting market participant to which the directed order is sent selects to receive liability directed orders, the method further comprises:

determining if order otherwise qualifies as a non-liability order under market and/or regulatory rules.

18. The computer program product of claim 17 wherein if the quoting market participant chose to accept liability orders, the method further comprises:

appending an indicator to a quoting market participant'"'"'s MMID, which when displayed at a client station shows that the market participant is available to receive directed liability orders.

19. The computer program product of claim 17 wherein if the quoting market participant to which a Directed Order is sent selects to receive liability directed orders, the method further comprises:

determining whether the order was designated at the time of entry as an “

All-or-None”

order (“

AON”

) that is at least one normal unit of trading in excess of an attributable quote/order of the quoting market participant to which the order is directed.

20. The computer program product of claim 17 wherein if the quoting market participant to which a Directed Order is sent selects to receive liability directed orders, the method further comprises:

determining whether the order was designated at the time of entry as a “

Minimum Acceptable Quantity”

order (“

MAQ”

) with a value of at least one normal unit of trading in excess of an attributable quote/order of the quoting market participant to which the order is directed.

21. The computer program product of claim 17 wherein if the quoting market participant to which the directed order is sent selects to receive liability directed orders, the method further comprises:

determining if order otherwise qualifies as a non-liability order under market and/or regulatory rules.

12. A method for trading securities in an electronic market comprises:

receiving a directed order to begin a negotiation process with a particular quoting market participant; and

delivering the order, as liability or non-liability order in accordance with how the quoting market participant chooses to receive directed orders.

17. A computer program product residing on a computer readable media for trading securities in an electronic market comprises instructions for causing a computer to:

receive a directed order to begin a negotiation process with a particular quoting market participant; and

deliver the order, as liability or non-liability order in accordance with how the quoting market participant chooses to receive directed orders.