Methods for risk portfolio management within an electronic trading system

• US 20070011079A1
• Filed: 01/06/2006
• Published: 01/11/2007
• Est. Priority Date: 10/14/1997
• Status: Active Grant

• Current Assignee: Blackbird Holdings, Inc.
• Original Assignee: Blackbird Holdings, Inc.
• Inventors: May, R.
• Granted Patent: US 7,571,136 B2
• Time in Patent Office: Days
• US Class Current: 705/37
• CPC Class Codes: G06Q 30/08 Auctions
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• 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 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A switch engine module enables advantageous management of a risk portfolio. The switch engine receives interest rate risk portfolios from a plurality of traders, and for each prospective trader, provides available switches based on positions in other counterparty portfolios that offset the viewing traders'"'"' positions. The offsetting positions are encoded with credit preference information in order to identify eligible trades based on both counterparties credit preferences. The credit preferences of the participating traders can be taken in consideration in making switches.

Claims

1. A method for financial instrument management utilizing an electronic trading system, wherein said electronic trading system includes a plurality of traders operationally connected, said method comprising the steps of:

receiving a financial instrument portfolio from at least a first trader and a second trader from the plurality of traders;

calculating relative risk positions of each financial instrument portfolio received from the first and second traders;

matching offsetting relative risk positions of the first and second traders, and executing a switch between the first and second traders for at least one matching; and

updating the financial instrument portfolios of the first and second traders based on the executed switch.

2. The method of claim 1, further comprising generating a confirmation notice for confirming a switch of offsetting risk positions.

4. The method of claim 1, wherein the step of receiving a financial instrument portfolio includes receiving an interest rate risk portfolio from at least the first trader and the second trader from a plurality of trades.

5. The method of claim 1, further comprising the step of presenting to at least the first trader and the second trader available switches.

6. The method of claim 5, wherein the step of executing a switch includes receiving a request for a switch from one of the first trader and second trader, and in response a message of an anonymous request for the switch is sent to the other of the first trader and second trader.

7. The method of claim 1, further comprising the step of presenting to at least the first trader and the second trader a possible switch and fair price for each day out a predetermined period of time.

3. A computer program product for risk portfolio management utilizing an electronic trading system, wherein said electronic trading system includes a plurality of traders operationally connected, said computer program product comprising:

a computer usable medium having computer-readable code means embodied in said medium, said computer-readable code means comprising;

computer readable code means for receiving a financial instrument portfolio from at least a first trader and a second trader from the plurality of traders;

computer readable code means for calculating relative risk positions of each financial instrument portfolio received from the first and second traders;

computer readable code means for matching offsetting relative risk positions of the first and second traders, and executing a switch between the first and second traders for at least one matching; and

computer readable code means for updating the financial instrument portfolios of the first and second traders based on the executed switch.