BLOCK TRADING SYSTEM AND METHOD PROVIDING PRICE IMPROVEMENT TO AGGRESSIVE ORDERS

• US 20090076961A1
• Filed: 07/28/2008
• Published: 03/19/2009
• Est. Priority Date: 07/26/2007
• Status: Active Grant

• Current Assignee: Virtu ITG Software Solutions LLC
• Original Assignee: Aritas Group, Inc.
• Inventors: Roper, Andrew, Federspiel, Fred J., Engelhart, Howard S., Waelbroeck, Henri, Kirkpatrick, Sean
• Granted Patent: US 7,882,015 B2
• Time in Patent Office: Days
• US Class Current: 705/50
• CPC Class Codes: G06Q 10/0637 Strategic management or analysis, e.g. setting a goal or target of an organisation; Planning actions based on goals; Analysis or evaluation of effectiveness of goals
• CPC Class Codes: G06Q 30/0239 Online discounts or incentives
• CPC Class Codes: G06Q 30/0601 Electronic shopping [e-shopping]
• 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 50/188 Electronic negotiation

Abstract

In a trading system for trading securities or the like, Contra Targeting is performed by enabling users to expose the liquidity within their order management system without divulging order management system information to a central trading server. Also, virtual orders can be placed and executed which give users price-time priority on an order without reserving the shares until the moment of execution.

Claims

1. A method for facilitating trading of items among a plurality of traders, the method comprising:

(a) providing electronic communication among a plurality of workstations corresponding to the plurality of traders, each of the plurality of workstations running or being connected to an order management system;

(b) storing, in a trading server, information indicating which of the traders have agreed to have their order management systems searched;

(c) receiving, from a first one of the plurality of workstations into the trading server, an order for one of the items, the order including an identification of others of the plurality of traders with which the first one of the plurality of traders is willing to trade;

(d) sending the order to the workstations of those of the plurality of traders which are identified in the order and which have agreed to have their order management systems searched;

(e) at each of the workstations to which the order is sent in step (d), scanning the available set of orders from the order management system exposed to the subject system to determine whether there is a contra to the order or scanning information about the set of orders from the order management system exposed to the subject system;

(f) at least one of the workstations in which it is determined in step (e) that there is a contra order to the order, providing a display concerning the order.

2. The method of claim 1, wherein the order includes an advertisement request message.

3. The method of claim 1, wherein the plurality of traders are grouped into components, and wherein the order includes an indication of which component or components of the plurality of traders will receive the order.

4. The method of claim 1, wherein the display gives a corresponding one of the traders an option to execute the order;

and wherein the method further comprises (g) if one of the traders given the option to execute the order in step (f) chooses to execute the order, executing the order.

5. The method of claim 4, wherein the option given in step (f) comprises an option to auto-execute the order with a single click.

6. The method of claim 1, wherein the order is sent as an encrypted message.

7. The method of claim 1, wherein, in each workstation in which it is determined in step (e) that there is no contra to the order, the order is deleted.

8. The method of claim 1, wherein step (f) comprises setting a duration timer, providing the display until the duration timer expires, and canceling the display when the duration timer expires.

9. The method of claim 8, further comprising, once the duration timer expires, sending an advertisement results message to the first system.

10. The method of claim 9, wherein said advertisement results message comprises an advertisement request message ID.

11. The method of claim 9, wherein said advertisement results message comprises an advertisement request message qualification score.

12. The method of claim 9, wherein said advertisement results message comprises a quantity of responses entered in response to the display of said display attributes of the confidential trading interest information from said first system.

13. The method of claim 9, wherein upon receiving said advertisement results message said first system logs information contained in said advertisement results message and generates an email containing information from said advertisement results message to a research department.

14. The method of claim 13, wherein said email is used for policing user behavior.

15. The method of claim 14, wherein said policing user behavior comprises monitoring a frequency with which a market participant sees said display of said display attributes of the confidential trading interest information from said first system and fails to respond.

16. The method of claim 15, wherein said policing user behavior further comprises storing information from said advertising notification message and correlating receipt of contra information with price moves.

17. The method of claim 1, wherein step (f) comprises forwarding the order to a ranking service to determine whether the order qualifies for display.

18. A method for trading items among a plurality of traders, the method comprising:

(a) receiving a virtual order for at least on item from one of the traders into an electronic trading system, wherein the virtual order provides priority for at least one item but does not reserve said at least one item;

(b) receiving, from another one of the traders, a contra order into the electronic trading system;

(c) determining whether the virtual order is at least partially available to be filled by the contra order; and

(d) if it is determined in step (c) that the virtual order is at least partially available to be filled by the contra order, filling the virtual order as much as possible by the contra order.

19. The method of claim 18, wherein the traders are given an option to place virtual orders or reserve orders.

20. The method of claim 18, wherein, after step (d), an unfilled portion of the virtual order is canceled.

21. A system for facilitating trading of items among a plurality of traders, the system comprising:

a plurality of workstations, in electronic communication with one another, corresponding to the plurality of traders, each of the plurality of workstations running or being connected to an order management system; and

a trading server storing information indicating which of the traders have agreed to have their order management systems searched;

the trading server receiving, from a first one of the plurality of workstations, an order for one of the items, the order including an identification of others of the plurality of traders with which the first one of the plurality of traders is willing to trade;

the trading server sending the order to the workstations of those of the plurality of traders which are identified in the order and which have agreed to have their order management systems searched;

each of the workstations to which the order is sent scanning the available set of orders from the order management system exposed to the subject system to determine whether there is a contra to the order; and

at least one of the workstations in which it is determined that there is a contra order to the order providing a display concerning the order.

22. The system of claim 21, wherein the order includes an advertisement request message.

23. The system of claim 21, wherein the plurality of traders are grouped into components, and wherein the order includes an indication of which component or components of the plurality of traders will receive the order.

24. The system of claim 21, wherein the display gives a corresponding one of the traders an option to execute the order;

and wherein, if one of the traders given the option to execute the order chooses to execute the order, the order is executed.

25. The system of claim 24, wherein the option given comprises an option to auto-execute the order with a single click.

26. The system of claim 21, wherein the order is sent as an encrypted message.

27. The system of claim 21, wherein, in each workstation in which it is determined that there is no contra to the order, the order is deleted.

28. The system of claim 21, wherein each of the workstations providing the display sets a duration timer, provides the display until the duration timer expires, and cancels the display when the duration timer expires.

29. The system of claim 28, wherein, once the duration timer expires, an advertisement results message is sent to the first system.

30. The system of claim 29, wherein said advertisement results message comprises an advertisement request message ID.

31. The system of claim 29, wherein said advertisement results message comprises an advertisement request message qualification score.

32. The system of claim 29, wherein said advertisement results message comprises a quantity of responses entered in response to the display of said display attributes of the confidential trading interest information from said first system.

33. The system of claim 29, wherein upon receiving said advertisement results message said first system logs information contained in said advertisement results message and generates an email containing information from said advertisement results message to a research department.

34. The system of claim 33, wherein said email is used for policing user behavior.

35. The system of claim 34, wherein said policing user behavior comprises monitoring a frequency with which a market participant sees said display of said display attributes of the confidential trading interest information from said first system and fails to respond.

36. The system of claim 35, wherein said policing user behavior further comprises storing information from said advertising notification message and correlating receipt of contra information with price moves.

37. The system of claim 21, wherein said at least one of the workstations providing the display forwards the order to a ranking service to determine whether the order qualifies for display.

38. A system for trading items among a plurality of traders, the system comprising:

a communication component for electronically communicating with a plurality of traders; and

a trading server for;

(a) receiving a virtual order for at least on item from one of the traders, wherein the virtual order provides priority for at least one item but does not reserve said at least one item;

(b) receiving, from another one of the traders, a contra order;

(c) determining whether the virtual order is at least partially available to be filled by the contra order; and

(d) if it is determined in step (c) that the virtual order is at least partially available to be filled by the contra order, filling the virtual order as much as possible by the contra order.

39. The system of claim 38, wherein the traders are given an option to place virtual orders or reserve orders.

40. The system of claim 38, wherein, after step (d), the trading server cancels an unfilled portion of the virtual order.

41. An article of manufacture for facilitating trading of items among a plurality of traders, the article of manufacture comprising:

a computer-readable storage medium; and

code on the computer-readable storage medium, the code, when executed on one or more computing devices, controlling said one or more computing devices for;

(a) providing electronic communication among a plurality of workstations corresponding to the plurality of traders, each of the plurality of workstations running or being connected to an order management system;

(b) storing, in a trading server, information indicating which of the traders have agreed to have their order management systems searched;

(c) receiving, from a first one of the plurality of workstations into the trading server, an order for one of the items, the order including an identification of others of the plurality of traders with which the first one of the plurality of traders is willing to trade;

(d) sending the order to the workstations of those of the plurality of traders which are identified in the order and which have agreed to have their order management systems searched;

(e) at each of the workstations to which the order is sent in step (d), scanning the available set of orders from the order management system exposed to the subject system to determine whether there is a contra to the order;

(f) at least one of the workstations in which it is determined in step (e) that there is a contra order to the order, providing a display concerning the order.

42. An article of manufacture for trading items among a plurality of traders, the article of manufacture comprising:

a computer-readable storage medium; and

code on the computer-readable storage medium, the code, when executed on one or more computing devices, controlling said one or more computing devices for;

(a) receiving a virtual order for at least on item from one of the traders into an electronic trading system, wherein the virtual order provides priority for at least one item but does not reserve said at least one item;

(b) receiving, from another one of the traders, a contra order into the electronic trading system;

(c) determining whether the virtual order is at least partially available to be filled by the contra order; and

(d) if it is determined in step (c) that the virtual order is at least partially available to be filled by the contra order, filling the virtual order as much as possible by the contra order.