System and method for avoiding transaction costs associated with trading orders

• US 20050171887A1
• Filed: 01/29/2004
• Published: 08/04/2005
• Est. Priority Date: 01/29/2004
• Status: Abandoned Application

• Current Assignee: BGC Partners Incorporated (BGC Group, Inc.)
• Original Assignee: BGC Partners Incorporated (BGC Group, Inc.)
• Inventors: Daley, Thomas J., Garapati, Pavan K., Reeves, Phil G., Stutzmann, Mark E.
• Application Number:
  US10/766,965
• Publication Number:
  US 20050171887A1
• 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
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A system for avoiding transaction costs associated with trading orders comprises a memory and a processor. The memory stores an order identifier associated with a trading order, and a time threshold associated with the trading order. The processor monitors the length of time the trading order is active with a market center that is processing the trading order. The processor further determines a timeout when the length of time the trading order is active with the market center equals or exceeds the time threshold. The processor then communicates a cancel instruction for the trading order in response to determining the timeout.

Claims

1. A system for avoiding costs associated with trading orders, comprising:

a memory operable to store an order identifier associated with a trading order, and a time threshold associated with the trading order;

a processor coupled to the memory and operable to;

monitor the length of time the trading order is active with a market center that is processing the trading order;

determine a timeout when the length of time the trading order is active with the market center equals or exceeds the time threshold; and

communicate a cancel instruction for the trading order in response to determining the timeout.

2. The system of claim 1, wherein:

the order identifier comprises an internal order identifier, the memory further operable to store an external order identifier associated with the internal order identifier and the trading order; and

the processor is further operable to;

communicate an order instruction for the trading order in response to determining the timeout; and

assign a new internal order identifier associated with the order instruction.

3. The system of claim 1, wherein the processor begins monitoring the length of time the trading order is active with the market center in response to receiving an acknowledgment that the trading order is active with the market center.

4. The system of claim 1, wherein:

the order identifier comprises an internal order identifier, the memory further operable to store an external order identifier associated with the internal order identifier and the trading order; and

the processor further operable to;

receive a cancel request for the trading order, the cancel request specifying the external order identifier; and

determine the internal order identifier associated with the external order identifier;

wherein the cancel instruction specifies the internal order identifier.

5. The system of claim 1, wherein:

the order identifier comprises an internal order identifier, the memory further operable to store an external order identifier associated with the internal order identifier and the trading order; and

the processor;

receives a first termination message indicating that the market center has terminated at least a portion of the trading order, the first termination message specifying the internal trading order;

determines the external order identifier associated with the internal order identifier; and

generates a second termination message for communication to a trader associated with the trading order, the second termination message specifying the external order identifier and indicating that the market center has terminated at least a portion of the trading order.

6. The system of claim 1, wherein the trading order specifies at least one of a bid request and an offer request for a trading product, the trading order further specifying a quantity for the trading product.

7. The system of claim 1, wherein the time threshold specifies a length of time that is a predetermined amount of time less than the length of time the market center will process the trading order before charging a transaction cost.

8. The system of claim 7, wherein the predetermined amount of time comprises ten seconds.

9. The system of claim 2, wherein the order instruction is communicated substantially simultaneously with the cancel instruction.

10. The system of claim 1, wherein the time threshold is further associated with the market center that is processing the trading order.

11. The system of claim 1, wherein:

the order identifier comprises an internal order identifier, the memory further operable to store an external order identifier associated with the internal order identifier and the trading order; and

the processor;

receives a first acknowledgment message indicating that the market center has filled at least a portion of the trading order, the first acknowledgment message specifying the internal trading order;

determines the external order identifier associated with the internal order identifier; and

generates a second acknowledgment message for communication to a trader associated with the trading order, the second acknowledgment message specifying the external order identifier and indicating that the market center has filled at least a portion of the trading order.

12. A method for avoiding costs associated with trading orders, comprising:

storing an order identifier associated with a trading order;

storing a time threshold associated with the trading order;

monitoring the length of time the trading order is active with a market center that is processing the trading order;

determining a timeout when the length of time the trading order is active with the market center equals or exceeds the time threshold; and

communicating a cancel instruction for the trading order in response to determining the timeout.

13. The method of claim 12, wherein the order identifier comprises an internal order identifier, and further comprising:

storing an external order identifier associated with the internal order identifier and the trading order;

communicating an order instruction for the trading order in response to determining the timeout; and

assigning a new internal order identifier associated with the order instruction.

14. The method of claim 12, wherein monitoring the length of time the trading order is active with the market center is initiated in response to receiving an acknowledgment that the trading order is active with the market center.

15. The method of claim 12, wherein the order identifier comprises an internal order identifier, and further comprising:

storing an external order identifier associated with the internal order identifier and the trading order;

receiving a cancel request for the trading order, the cancel request specifying the external order identifier; and

determining the internal order identifier associated with the specified external order identifier;

wherein the cancel instruction specifies the determined internal order identifier.

16. The method of claim 12, wherein the order identifier comprises an internal order identifier, and further comprising:

storing an external order identifier associated with the internal order identifier and the trading order;

receiving a first termination message indicating that the market center has terminated at least a portion of the trading order, the first termination message specifying the internal trading order;

determining the external order identifier associated with the internal order identifier; and

generating a second termination message for communication to a trader associated with the trading order, the second termination message specifying the external order identifier and indicating that the market center has terminated at least a portion of the trading order.

17. The method of claim 12, wherein the trading order specifies at least one of a bid request and an offer request for a trading product, the trading order further specifying a quantity for the trading product.

18. The method of claim 12, wherein the time threshold specifies a length of time that is a predetermined amount of time less than the length of time the market center will process the trading order before charging a transaction cost.

19. The method of claim 18, wherein the predetermined amount of time comprises ten seconds.

20. The method of claim 13, wherein the order instruction is communicated substantially simultaneously with the cancel instruction.

21. The method of claim 12, wherein the time threshold is further associated with the market center that is processing the trading order.

22. The method of claim 12, wherein the order identifier comprises an internal order identifier, and further comprising:

storing an external order identifier associated with the internal order identifier and the trading order;

receiving a first acknowledgment message indicating that the market center has filled at least a portion of the trading order, the first acknowledgment message specifying the internal trading order;

determining the external order identifier associated with the internal order identifier; and

generating a second acknowledgment message for communication to a trader associated with the trading order, the second acknowledgment message specifying the external order identifier and indicating that the market center has filled at least a portion of the trading order.

23. A system for avoiding costs associated with trading orders, comprising:

a memory operable to store an order identifier associated with a trading order, and a time threshold associated with the trading order; and

a processor coupled to the memory and operable to;

monitor the length of time the trading order is active with a market center that is processing the trading order;

determine a timeout when the length of time the trading order is active with the market center equals or exceeds the time threshold;

communicate a cancel instruction for the trading order in response to determining the timeout;

communicate an order instruction for the trading order in response to determining the timeout; and

assign a new order identifier associated with the order instruction.

24. The system of claim 23, wherein the order identifier comprises an internal order identifier and the memory is further operable to store an external order identifier associated with the internal order identifier and the trading order.

25. The system of claim 23, wherein the processor begins monitoring the length of time the trading order is active with the market center in response to receiving an acknowledgment that the trading order is active with the market center.

26. The system of claim 24, wherein the processor is further operable to:

receive a cancel request for the trading order, the cancel request specifying the external order identifier; and

determine the internal order identifier associated with the specified external order identifier;

wherein the cancel instruction specifies the internal order identifier.

27. The system of claim 23, wherein the processor:

receives a first termination message indicating that the market center has terminated at least a portion of the trading order, the first termination message specifying the internal trading order;

determines the external order identifier associated with the internal order identifier; and

generates a second termination message for communication to a trader associated with the trading order, the second termination message specifying the external order identifier and indicating that the market center has terminated at least a portion of the trading order.

28. The system of claim 23, wherein the trading order specifies at least one of a bid request and an offer request for a trading product, the trading order further specifying a quantity for the trading product.

29. The system of claim 23, wherein the time threshold specifies a length of time that is a predetermined amount of time less than the length of time the market center will process the trading order before charging a transaction cost.

30. The system of claim 29, wherein the predetermined amount of time comprises ten seconds.

31. The system of claim 23, wherein the order instruction is communicated substantially simultaneously with the cancel instruction.

32. The system of claim 23, wherein the time threshold is further associated with the market center that is processing the trading order.

33. The system of claim 23, wherein the processor:

receives a first acknowledgment message indicating that the market center has filled at least a portion of the trading order, the first acknowledgment message specifying the internal trading order;

determines the external order identifier associated with the internal order identifier; and

generates a second acknowledgment message for communication to a trader associated with the trading order, the second acknowledgment message specifying the external order identifier and indicating that the market center has filled at least a portion of the trading order.