Method for trading securities

• US 20070061241A1
• Filed: 09/15/2005
• Published: 03/15/2007
• Est. Priority Date: 09/15/2005
• Status: Abandoned Application

• Current Assignee: Communicating Limited
• Original Assignee: Communicating Limited
• Inventors: Lane, Richard, Jovanovic, Vladan, Beganovic, Adnan, Stanic, Veselin
• Application Number:
  US11/228,005
• Publication Number:
  US 20070061241A1
• 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 method for trading securities including options. A trader generates a variable derivative product order that identifies at least a derivative product, an underlying financial product or instrument, a pricing formula, and values of price determination variables needed by the pricing formula to establish a price for the derivative. The variable product order is transmitted electronically to an exchange. The exchange calculates the offered price of the derivative using a value of the underlying product and publishes offers to potential traders. The offered price is recalculated as the value of the underlying products changes and republished to potential traders. Trades may then be executed based on the offered prices. Hedging trades may be executed in combination with trades made based on the variable derivative product orders.

Claims

1. A method for trading a given security at an exchange comprising:

a. receiving a first order from a first trader, the order specifying a first direction of trading, a first limit price and a first volume of a security;

b. publishing a volume order for the given security, the volume order specifying the security and not specifying any of a price, a volume and a direction;

c. receiving from a second trader a second order, the second order specifying a second direction of trading, a second volume of the security, and a second price;

d. executing a trade for the given security when the second direction of trading matches the first direction of trading and the second price is not less than the first limit price when the direction of the second order corresponds to an order to buy the security and the second price is not greater than the first limit price when the direction of the second order corresponds to an order to sell the security.

2. A method according to claim 1 further including:

e. continuing to publish the volume order when the second volume is less than the first volume.

3. A method according to claim 1 wherein receiving a first order from a first trader further includes receiving a specification of a minimum trade volume and executing the trade only when the second volume is not less than the minimum trade volume.

4. A computer program product for use on a computer system for trading a given security at an exchange, the computer program product comprising a computer usable medium having computer readable program code thereon, the computer readable program code including program code for:

a. receiving a first order from a first trader, the order specifying a first direction of trading, a first limit price and a first volume of a security;

b. publishing a volume order for the given security, the volume order specifying the security and not specifying any of a price, a volume and a direction;

c. receiving from a second trader a second order, the second order specifying a second direction of trading, a second volume of the security, and a second price;

d. executing a trade for the given security when the second direction of trading matches the first direction of trading and the second price is not less than the first limit price when the direction of the second order corresponds to an order to buy the security and the second price is not greater than the first limit price when the direction of the second order corresponds to an order to sell the security.

5. A method for processing an order for a security at a first system, the method comprising:

a. receiving from a user an indication of a given category of requests for quotation;

b. receiving a given request for quotation, the given request for quotation matching the given category;

c. displaying the given request for quotation on a display screen; and

d. displaying a form to the user when the given request for quotation is selected by user action and receiving the order based at least in part on data entered into the form.

6. A method according to claim 5, further including:

e. sending the order to a second system.

7. A method according to claim 5 wherein the given category of requests for information is a volume threshold category.

8. A method according to claim 5, wherein the given category of requests for quotation is a price threshold category.

9. A method according to claim 5, wherein the given category of requests for quotation is a price change category.

10. A method according to claim 5, wherein the given category of requests for quotation is an expiry date category.

11. A method according to claim 5, wherein the given category of requests for quotation is a volatility level category.

12. A method according to claim 5, wherein the given category of requests for quotation is a category including an open position.

13. A computer program product for use on a computer system for processing an order for a security at a first system, the computer program product comprising a computer usable medium having computer readable program code thereon, the computer readable program code including program code for:

a. receiving from a user an indication of a given category of requests for quotation;

b. receiving a given request for quotation, the given request for quotation matching the given category;

c. displaying the given request for quotation on a display screen; and

d. displaying a form to the user when the given request for quotation is selected by user action and receiving the order based at least in part on data entered into the form.