System and method for providing an intermediary for a transaction

• US 20040230522A1
• Filed: 04/23/2004
• Published: 11/18/2004
• Est. Priority Date: 05/15/2003
• Status: Active Grant

• Current Assignee: Cantor Index LLC
• Original Assignee: Cantor Index LLC
• Inventors: Crosthwaite, Dominic, Findlay, Lewis C.
• Granted Patent: US 7,716,113 B2
• Time in Patent Office: Days
• US Class Current: 705/38
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 50/34 Betting or bookmaking, e.g. Internet betting
• CPC Class Codes: G07F 15/00 Coin-freed apparatus with meter-controlled dispensing of liquid, gas or electricity
• CPC Class Codes: G07F 17/3288 Betting, e.g. on live events, bookmaking

Abstract

A method of providing an intermediary for a transaction is provided. The method includes receiving a first request to place a first order to trade a first product at a first price, the first product being associated with one or more events. The first order is placed. The method further includes receiving a second request to place a second order to trade the first product at a second price. The second order is placed. A match between the first order and the second order is identified based at least in part on the first price of the first order and the second price of the second order. A first set of one or more obligations is established based at least in part on the first order, and a second set of one or more obligations is established based at least in part on the second order.

Claims

1. A method of providing an intermediary for a transaction, comprising:

receiving a first request to place a first order to trade a first product at a first price, the first product associated with one or more events;

placing the first order;

receiving a second request to place a second order to trade the first product at a second price;

placing the second order;

identifying a match between the first order and the second order based at least in part on the first price of the first order and the second price of the second order;

establishing a first set of one or more obligations based at least in part on the first order; and

establishing a second set of one or more obligations based at least in part on the second order.

2. The method of claim 1, wherein:

the first order comprises an order to buy the first product; and

the second order comprises an order to sell the first product.

3. The method of claim 1, wherein identifying a match between the first order and the second order comprises identifying a match if the first price equals the second price.

4. The method of claim 1, wherein identifying a match between the first order and the second order comprises identifying a match if the first price and the second price differ by more than or equal to a predetermined amount.

5. The method of claim 1, wherein identifying a match between the first order and the second order comprises identifying a match if the first price and the second price differ by less than or equal to a predetermined amount.

6. The method of claim 1, further comprising:

receiving the results of the one or more events associated with the first product;

executing a first transaction based at least in part on the results of the one or more events and the first set of obligations; and

executing a second transaction based at least in part on the results of the one or more events and the second set of obligations.

7. The method of claim 6, wherein:

the first order is associated with a first account;

the second order is associated with a second account;

the trading platform is associated with a platform account;

executing the first transaction comprises transferring a first amount from the first account to the platform account; and

executing the second transaction comprises transferring a second amount from the platform account to the second account.

8. The method of claim 7, wherein:

the first amount is determined based at least in part on the results of the one or more events and the first set of obligations; and

the second amount is determined based at least in part on the results of the one or more events and the second set of obligations.

9. The method of claim 7, wherein the second amount is less than the first amount by a predetermined amount.

10. The method of claim 6, wherein the execution of the first transaction is independent of the execution of the second transaction.

11. The method of claim 1, wherein:

the first request is made using a first account that comprises one or more current balances; and

the method further comprises;

determining a risk value for the first trading order based at least in part on the first product; and

determining whether to approve the first order based at least in part on the risk value determined for the first trading order and one or more of the current balances for the account.

12. The method of claim 11, wherein the method further comprises determining a risk factor associated with the first product based at least in part on an estimated maximum tick liability associated with the first product.

13. A system for providing an intermediary for a transaction, comprising:

a processor operable to;

receive a first request to place a first order to trade a first product at a first price, the first product associated with one or more events;

place the first order;

receive a second request to place a second order to trade the first product at a second price;

place the second order;

identify a match between the first order and the second order based at least in part on the first price of the first order and the second price of the second order;

establish a set of one or more first obligations based at least in part on the first order;

establish a set of one or more second obligations based at least in part on the second order; and

a memory operable to store the first obligations and the second obligations.

14. The system of claim 13, wherein:

the first order comprises an order to buy the first product; and

the second order comprises an order to sell the first product.

15. The system of claim 13, wherein identifying a match between the first order and the second order comprises identifying a match if the first price equals the second price.

16. The system of claim 13, wherein identifying a match between the first order and the second order comprises identifying a match if the first price and the second price differ by more than or equal to a predetermined amount.

17. The system of claim 13, wherein identifying a match between the first order and the second order comprises identifying a match if the first price and the second price differ by less than or equal to a predetermined amount.

18. The system of claim 13, wherein the processor is further operable to:

receive the results of the one or more events associated with the first product;

execute a first transaction based at least in part on the results of the one or more events and the first set of obligations; and

execute a second transaction based at least in part on the results of the one or more events and the second set of obligations.

19. The system of claim 18, wherein:

the first order is associated with a first account;

the second order is associated with a second account;

the trading platform is associated with a platform account;

executing the first transaction comprises transferring a first amount from the first account to the platform account; and

executing the second transaction comprises transferring a second amount from the platform account to the second account.

20. The system of claim 19, wherein:

the first amount is determined based at least in part on the results of the one or more events and the first set of obligations; and

the second amount is determined based at least in part on the results of the one or more events and the second set of obligations.

21. The system of claim 19, wherein the second amount is less than the first amount by a predetermined amount.

22. The system of claim 18, wherein the processor executes the first and second transactions independent from each other.

23. The system of claim 13, wherein:

the first request is made using a first account that comprises one or more current balances;

the processor determines a risk value for the first order based at least in part on the first product; and

the processor determines whether to approve the first order based at least in part on the risk value determined for the first order and one or more of the current balances for the account.

24. The system of claim 23, wherein the processor further determines a risk factor associated with the first product based at least in part on an estimated maximum tick liability associated with the first product.