DYNAMIC ORDER VISIBILITY SYSTEM FOR THE TRADING OF ASSETS

• US 20030093343A1
• Filed: 08/31/1999
• Published: 05/15/2003
• Est. Priority Date: 08/31/1999
• Status: Abandoned Application

• Current Assignee: Intelligent Markets, Inc.
• Original Assignee: Sidley Austin Brown & Wood (Sidley Austin LLP)
• Inventors: TOPAZ, JASON ANDREW, HUTTENLOCHER, CARL
• Application Number:
  US09/386,436
• Publication Number:
  US 20030093343A1
• Time in Patent Office: Days
• US Class Current: 705/35
• 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

Abstract

The disclosed invention is a new method and mechanism for a marketplace of buyers and sellers of any asset, and in particular financial instruments. The invention includes a user specified, computer-aided control over the visibility and matching of buy and sell orders. In a marketplace, particularly one with illiquid assets, a participant wants his order to be shown to potentially interested participants such that a trade can take place. However, the participant wants this order treated with discretion, so that his trading information does not get into the hands of non-interested parties who may take advantage of the information, thus causing adverse price movement. The mechanism and business method disclosed herein allow the user to enter a buy or sell order along with parameters, including a visibility group, which guide a computer program to distribute information about this order to desired parties. The mechanism can be used for the trading of any financial asset, including but not limited to, bonds, stocks, foreign exchange, commodities, futures, and options.

Claims

1. A method for providing order displays to participants in a market, comprising the steps of:

defining a plurality of dynamic criteria wherein each said dynamic criterion is based on activity in said market,

defining a plurality of visibility groups of said participants, wherein each said visibility group is based on at least one of said dynamic criteria, and the participants in said visibility group are subject to change over time,

receiving an order for an asset from a one of said participants,

associating said order with a one of said visibility groups, and

making at least a portion of said order available to each of said participants in said one visibility group.

2. A method for providing order displays as recited in claim 1 wherein said one visibility group is selected in conjunction with said order

3. A method for providing order displays as recited in claim 1 wherein said one visibility group is selected prior to receiving said order.

4. A method for providing order displays as recited in claim 1 including the step of displaying at least a portion of said order to said recipients in said one visibility group.

5. A method for providing order displays as recited in claim 1 wherein said one visibility group is defined before said order is received.

6. A method for providing order displays as recited in claim 1 wherein said one visibility group is defined after said order is received.

7. A method for providing order displays as recited in claim 1 wherein said step of making at least a portion of said order available to each of said participants comprises posting said at least a portion of said order for access by said participants in said one visibility group.

8. A method for providing order displays as recited in claim 1 wherein said step of making at least a portion of said order available to each of said participants comprises transmitting said at least a portion of said order to said participants in said one visibility group.

9. A method for providing order displays as recited in claim 1 including the step of storing said order in an order book which includes a listing for each of said orders and an identification of the participant who placed each order.

10. A method for providing order displays as recited in claim 1 including the steps of:

modifying said one visibility group, after said step of making said order available to each of said participants, to add at least one new participant thereto, and

making at least a portion of said order available to said one new participant.

11. A method for providing order displays as recited in claim 1 including the steps of:

modifying said one visibility group, after said step of making said order available to each of said participants, to delete at least one participant therefrom, and

canceling said availability of said at least a portion of said order which was previously available to said deleted participant.

12. A method for providing order displays as recited in claim 1 including the steps of:

receiving a cancellation of said order, and

terminating the availability of said at least a portion of said order to said participants in said one visibility group in response to said cancellation.

13. A method for providing order displays as recited in claim 1 including the steps of:

receiving a new visibility group designation from said one participant,

terminating the availability of said at least a portion of said order to said participants in said one visibility group in response to said receiving a new visibility group, and

making a least a portion of said order available to each of said participants in said new visibility group.

14. A method for providing order displays as recited in claim 1 wherein said criteria for said one visibility group comprises participants corresponding to orders available to and designated by said one participant.

15. A method for providing order displays as recited in claim 1 including the steps of:

receiving a second order for said security from said one participant,

associating said second order with a second of said visibility groups, and

making at least a portion of said order available to each of said participants in said second visibility group.

16. A method for providing order displays as recited in claim 1 wherein a one of said criteria for classifying said participants is likely buyers.

17. A method for providing order displays as recited in claim 1 wherein a one of said criteria for classifying said participants is a selected group of likely buyers.

18. A method for providing order displays as recited in claim 1 wherein a one of said criteria for classifying said participants is those participants who are not likely or current buyers.

19. A method for providing order displays as recited in claim 1 wherein a one of said criteria for classifying said participants is likely sellers.

20. A method for providing order displays as recited in claim 1 wherein a one of said criteria for classifying said participants is the most recent sellers.

21. A method for providing order displays as recited in claim 1 wherein a one of said criteria for classifying said participants is those participants who are not likely or current sellers.

22. A method for providing order displays as recited in claim 1 wherein a one of said criteria for classifying said participants is the rating of the said participant as far as reliability as determined from their past trading behavior.

23. A method for providing order displays as recited in claim 1 wherein a one of said criteria for classifying said participants is the likely amount of unit size that said participant will want to trade.

24. A method for providing order displays as recited in claim 1 including the step of updating the participants in said visibility groups when facts change that relate to any of said criteria.

25. A method for providing order displays as recited in claim 1 including the step of maintaining an order history file of said orders.

26. A method for providing order displays as recited in claim 1 wherein said asset is a security.

27. A method for providing order displays as recited in claim 1 wherein said asset is information or services available for sale and purchase.

28. A method for providing order displays as recited in claim 1 wherein said asset is the usage of voice or data communication networks.

29. A method for providing order displays as recited in claim 1 wherein said asset is electric power.

30. A method for providing order displays as recited in claim 1 wherein said asset is a security and said order is an expression of interest to trade in said security.

31. A method for providing order displays as recited in claim 1 wherein said asset is a security and said order includes a firm commitment to trade at a unit price for said security and quantity of said security.

32. A method for providing order displays as recited in claim 1 wherein said asset is a security and said order includes an identification of said security, a maximum quantity of said security to be traded, an indication of buy or sell for the security and a minimum price for a sale or a maximum price for a buy.

33. A method for providing order displays as recited in claim 1 wherein said asset is a security and said order includes a minimum size requirement that must be met for a trade with an invisible order in said security.

34. A method for providing order displays as recited in claim 1 including the steps of:

defining a second visibility group of said participants, wherein said second visibility group comprises the ones of said participants which have placed orders that are available for display to a second of said participants and which have been selected by said second participants,

receiving an order for an asset from said second participant, wherein said second participant order is associated with said second visibility group, and

making at least a portion of said second participant order available to each of said participants in said second visibility group.

35. A method of providing order displays as recited in claim 1 including the steps of:

establishing a trade history of trades fulfilled between participants in said market,

defining a second visibility group of said participants, wherein said second visibility group comprises the ones of said participants, either a buyer or seller, corresponding to said trades in said trade history and which have been selected by a second of said participants,

receiving an order for an asset from said second participant, wherein said second participant order is associated with said second visibility group, and

making at least a portion of said second participant order available to each of said participants in said second visibility group.

36. A method for providing order displays to participants in a market in which the participants submit orders for assets, comprising the steps of,

defining a visibility group of said participants, wherein said visibility group comprises the ones of said participants which have placed orders that are available for display to a first of said participants and which have been selected by said first participant,

receiving a first order for an asset from said first participant, wherein said first order is associated with said visibility group, and

making at least a portion of said first order available to each of said participants in said visibility group, wherein said portion does not include information identifying the participants who have available said at least a portion of said order.

37. A method for providing order displays to participants in a market in which the participants submit orders for assets, comprising the steps of:

establishing a trade history of trades fulfilled between participants in said market,

defining a visibility group of said participants, wherein said visibility group comprises the ones of said participants, either buyers or sellers, corresponding to said trades in said trade history and which have been selected by a first of said participants,

receiving a first order for an asset from said first participant, wherein said first order is associated with said visibility group, and

making at least a portion of said first order available to each of said participants in said visibility group.

38. A method for providing order displays to participants in a market, comprising the steps of,

defining a plurality of dynamic criteria wherein each said dynamic criterion is based on activity in said market,

classifying each of said participants according to each of a plurality of criteria,

receiving an order for a security from a one of said participants,

associating one of said criteria with said order,

selecting the ones of said participants that correspond to said one dynamic criterion, and

making at least a portion of said order available to each of said selected participants.

39. A method for providing order displays as recited in claim 38 wherein said one criteria is selected prior to receiving said order.

40. A method for providing order displays as recited in claim 38 wherein said one criteria is selected prior to receiving said order.

41. A method of providing order displays as recited in claim 38 including the step of displaying at least a portion of each of said orders to said selected recipients.

42. A method of providing order displays as recited in claim 38 including the step of storing said order in an order book which includes a listing for each of said orders and an identification of the participant who placed each order.

43. A method for providing order displays as recited in claim 38 including the steps of:

classifying said participants according to said one criteria to specify at least one new participant for said one criteria, and

making at least a portion of said order available to said new participant.

44. A method for providing order displays as recited in claim 38 including the steps of:

classifying said participants according to said one criteria to delete at least one participant for said one criteria, and

canceling said availability of said at least a portion of said order which was previously available to said deleted participant.

45. A method for providing order displays as recited in claim 38 wherein a one of said criteria for classifying said participants is likely buyers.

46. A method for providing order displays as recited in claim 38 wherein a one of said criteria for classifying said participants is a selected group of likely buyers.

47. A method for providing order displays as recited in claim 38 wherein a one of said criteria for classifying said participants is those participants who are not likely or current buyers.

48. A method for providing order displays as recited in claim 38 wherein a one of said criteria for classifying said participants is likely sellers.

49. A method for providing order displays as recited in claim 38 wherein a one of said criteria for classifying said participants is the most recent sellers.

50. A method for providing order displays as recited in claim 38 wherein a one of said criteria for classifying said participants is those participants who are not likely or current sellers.

51. A system for providing order displays to participants in a market, comprising:

a server for providing communications with said participants, including receiving orders for securities from said participants,

an order database which includes an order book for storing each outstanding order received from said participants, and

an order processor for producing a plurality of visibility groups of said participants wherein each said visibility group is based on at least one of a plurality of dynamic criteria which criteria are based on activity in said market and the participants in said visibility groups are subject to change over time;

for receiving a specific order via said server from a participant wherein said specific order is associated with a one of said visibility groups; and

a display filter for making at least a portion of said specific order available via said server to each of the participants in said one visibility group.

52. A system as recited in claim 51 including a trade history database for recording each of said orders which has been fulfilled and identifying the participants for each said fulfilled order.

53. A system as recited in claim 51 including at least one analytic engine for updating said visibility groups when at least one of said criterion changes for a participant.

54. A method for trading assets in a market having a plurality of participants, comprising the steps of:

defining a plurality of dynamic criteria wherein each said dynamic criterion is based on activity in said market,

defining a plurality of visibility groups of said participants, wherein each said visibility group is based on at least one of said dynamic criterion and the participants in said visibility groups are subject to change over time,

receiving respective orders for a particular asset from a plurality of said participants, wherein each said order is associated with a one of said visibility groups,

making at least a portion of each said order available to each of said participants in the visibility group associated with the order, and

matching orders received from said participants and fulfilling a trade for said matched orders between the participants who submitted the matched orders.

55. A method for trading assets as recited in claim 54 in which each said order includes a price and wherein said step of matching orders comprises identifying two orders having the same unit value.

56. A method for trading assets as recited in claim 54 wherein said assets are securities.

57. A method of trading assets as recited in claim 54 wherein said step of matching orders is limited to participants which had available at least one of said at least a portion of said order.

58. A method of trading assets as recited in claim 54 wherein said asset is a security and said order includes a minimum size requirement that must be met for a trade with an invisible order in said security.

59. A method for trading assets as recited in claim 54 wherein said step of matching orders includes the matching of orders which have been made available and which are not available to said participants.

60. A method for trading assets as recited in claim 54 wherein a first participant submits an order which is invisible to a second participant, and a second participant submits a counter-order with a price more favorable to said first participant than the price for said first order, and said step of matching orders comprises determining an intermediate trade price which is between the price of said first order and said second order, and fulfilling said trade for said first and said second orders at said intermediate trade price.

61. A method for trading assets as recited in claim 60 wherein a third participant submits an order (of the same nature as said first order, but visible to said second participant) with price equal to the price on said second order, and said step of matching orders comprises fulfilling said trade for said second and said third orders at the common price.

62. A method for trading assets as recited in claim 60 wherein a third participant submits an order (of the same nature as said first order, but visible to said second participant) with price equal to the price on said second order, and said step of matching orders comprises interactively querying said third participant with an option to trade at said intermediate trade price, and if said third participant accepts said option, fulfilling said trade for said second and said third orders at the intermediate trade price, and if said third participant does not accept said option, fulfilling said trade for said first and said second orders at the intermediate trade price.

63. A system for trading assets in a market having a plurality of participants, comprising:

a server for providing communications with said participants, including receiving orders for said assets from said participants,

an order database which includes an order book for storing each outstanding order received from said participants, and

an order processor for producing a plurality of visibility groups of said participants wherein each said visibility group is based on at least one of a plurality of dynamic criteria which criteria are based on activity in said market and the participants in said visibility group are subject to change over time;

for receiving a specific order via said server from a participant wherein said specific order is associated with a one of said visibility groups;

a display filter for making at least a portion of said specific order available via said server to each of the participants in said one visibility group, and

said order processor coupled to said order database for matching orders received from said participants and fulfilling a trade for said matched orders between the participants who submitted the matched orders.

64. A system for trading assets as recited in claim 63 including a trade history database.

65. A system for trading assets as recited in claim 63 wherein said assets are securities.

67. A method for providing trade displays as recited in claim 65 wherein said asset is a security.

66. A method for providing trade displays to participants in a market, comprising the steps of:

receiving first and second orders for an asset respectively from a first and a second of said participants,

defining a plurality of trade display groups of said participants, wherein said trade display groups are based on criteria specified by said participants,

associating said first and second orders respectively with a first and a second of said trade display groups,

establishing a trade for said first and second orders, and

making information relating to said trade available to the ones of said participants who are in both said first trade display group and said second trade display group.

68. A method for providing trade displays as recited in claim 66 wherein said first and second orders are further associated with a yes/no show size parameter and wherein said information relating to said trade includes the trade quantity if and only if both orders have said show size parameter set to yes.

69. A method for providing order displays to participants in a market comprising the steps of:

defining a plurality of static criteria wherein each said static criterion is based on the identity of a participant,

defining a visibility group of said participants, wherein said visibility group is based on a plurality of said static criteria,

receiving an order for an asset from a one of said participants,

associating said order with said visibility group, and

making at least a portion of said order available to each of said participants in said one visibility group.