SYSTEMS AND METHODS FOR ESTABLISHING FIRST ON THE FOLLOW TRADING PRIORITY IN ELECTRONIC TRADING SYSTEMS

• US 20070244795A1
• Filed: 01/09/2007
• Published: 10/18/2007
• Est. Priority Date: 01/09/2006
• Status: Active Grant

• Current Assignee: BGC Partners Incorporated (BGC Group, Inc.)
• Original Assignee: BGC Partners Incorporated (BGC Group, Inc.)
• Inventors: Sweeting, Michael, Noviello, Joseph, Lutnick, Howard
• Granted Patent: US 8,117,109 B2
• Time in Patent Office: Days
• US Class Current: 705/37
• 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

A trading system transitions from a first state to a second state and may award a participant, when one or more criteria and/or a status of trading rights are met, with trading priority in the second state to trade on an incoming contra order. The participant may also have an associated order modified as a result of an incoming contra order and/or be caused to automatically trade on an incoming contra order.

Claims

1. A method comprising:

transitioning an electronic trading system from a first state to a second state; and

awarding a participant with trading priority in the second state with respect to an incoming contra order, when the participant satisfies a status of trading rights in the first state and when one or more predetermined criteria in the second state are satisfied.

2. The method of claim 1, in which the first state comprises a state that allows trading and negotiation between participants, and in which the second state comprises a bid/offer state.

3. The method of claim 1, in which the trading priority comprises a right to exclusively trade on the incoming contra order.

4. The method of claim 1, further comprising allowing all participants to trade on the incoming contra order if the participant is not awarded with trading priority.

5. The method of claim 1, in which the status of trading rights in the first state comprises rights based on a prioritization of existing orders.

6. The method of claim 1, in which the participant satisfies the status of trading rights in the first state when the participant has a best order from among one or more existing orders.

7. The method of claim 1, in which the participant satisfies the status of trading rights in the first state when the participant made a trade in the first state.

8. The method of claim 1, in which the participant satisfies the status of trading rights in the first state when the participant made in the first state a trade that also satisfies a minimum size requirement.

9. The method of claim 1, in which the one or more predetermined criteria in the second state are satisfied when a size of an order in the second state and associated with the participant satisfies a minimum size requirement.

10. The method of claim 9, in which the order associated with the participant comprises at least one of:

an existing order, and

an order subsequently entered, in the second state, by the participant.

11. The method of claim 9, in which the one or more predetermined criteria in the second state are also satisfied when the size of the order associated with the participant exceeds a percentage of a size of the incoming contra order.

12. The method of claim 9, in which the one or more predetermined criteria in the second state are also satisfied when a price of the order associated with the participant is within a delta of a price of the incoming contra order.

13. The method of claim 9, in which the one or more predetermined criteria in the second state are also satisfied when a size of the incoming contra order satisfies at least a minimum size requirement.

14. The method of claim 9, in which the one or more predetermined criteria in the second state are also satisfied when a price of the order associated with the participant is within a delta of a price of a trade in the first state.

15. The method of claim 9, in which awarding the participant with trading priority further comprises awarding the participant with trading priority when the participant made a trade in the first state that satisfies a minimum size requirement.

16. The method of claim 1, in which the one or more predetermined criteria in the second state are satisfied when a price of an order in the second state and associated with the participant satisfies a price criteria with respect to a price of a trade in the first state.

17. The method of claim 16, in which the price criteria comprises the price of the order associated with the participant being within a delta of the price of the trade in the first state.

18. The method of claim 1, in which the one or more predetermined criteria in the second state are satisfied when a size of an order in the second state and associated with the participant exceeds a percentage of a size of the incoming contra order.

19. The method of claim 1, in which the one or more predetermined criteria in the second state are satisfied when a price of an order in the second state and associated with the participant is within a delta of a price of the incoming contra order.

20. The method of claim 1, in which awarding the participant with trading priority further comprises awarding the participant with trading priority when the participant satisfies one or more transaction criteria in the first state.

21. The method of claim 20, in which the participant satisfies the one or more transaction criteria in the first state when the participant made a trade in the first state that satisfies a minimum size requirement

22. The method of claim 1, in which the one or more predetermined criteria in the second state are satisfied when at least one of:

a size of the incoming contra order satisfies at least a minimum size requirement, and

a size of the incoming contra order exceeds a percentage of a size of an order associated with the participant.

23. An apparatus comprising a computing device operable to perform the method of claim 1.

24. A computer readable medium comprising a program that when executed performs the method of claim 1.

25. A method comprising:

transitioning an electronic trading system from a first state to a second state; and

awarding a participant with trading priority in the second state with respect to an incoming contra order, when the participant made a trade in the first state and when the participant satisfies one or more predetermined criteria in the first state, including the trade satisfying a minimum size requirement.

26. A method comprising:

transitioning an electronic trading system from a first state to a second state;

awarding a participant with a right to exclusively trade on an incoming contra order in the second state, the second participant having an order in the second state; and

automatically modifying the participant'"'"'s order when the contra order meets one or more predetermined criteria, in which modifying the participant'"'"'s order does not affect the participant'"'"'s trading priority in the second state.

27. The method of claim 26, in which the participant'"'"'s order comprises at least one of:

an existing order, and

an order entered, in the second state, by the participant.

28. The method of claim 26, in which modifying the participant'"'"'s order comprises at least one of:

modifying a size of the order, and

modifying a price of the order.

29. The method of claim 26, in which modifying the order comprises removing the order.

30. The method of claim 26, in which modifying the participant'"'"'s order comprises modifying the participant'"'"'s order upon at least one of:

awarding the participant with the right to exclusively trade, and

an input of the incoming contra order.

31. The method of claim 26, in which the one or more predetermined criteria comprise at least one of:

a minimum size requirement, and

a price requirement.

32. The method of claim 26, further comprising automatically causing the participant to trade on the incoming contra order when another participant indicates a willingness to trade on the incoming contra order.

33. An apparatus comprising a computing device operable to perform the method of claim 26.

34. A method comprising:

transitioning an electronic trading system from a first state to a second state;

receiving a contra order in the second state;

determining whether a participant has an exclusive right to trade on the contra order; and

automatically causing the participant to trade on the contra order when the participant has the exclusive right to trade on the contra order and when another participant indicates a willingness to trade on the contra order.

35. The method of claim 34, in which the participant has no pending order.