BLOCK TRADING SYSTEM AND METHOD PROVIDING PRICE IMPROVEMENT TO AGGRESSIVE ORDERS

• US 20090089199A1
• Filed: 07/28/2008
• Published: 04/02/2009
• Est. Priority Date: 07/26/2007
• Status: Active Grant

• Current Assignee: Virtu ITG Software Solutions LLC
• Original Assignee: Aritas Group, Inc.
• Inventors: Engelhart, Howard, Roper, Andrew, Federspiel, Fred J., Waelbroeck, Henri, Kirkpatrick, Sean
• Granted Patent: US 8,165,954 B2
• Time in Patent Office: Days
• US Class Current: 705/37
• 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, traders are given various methods for providing protection from poor executions caused by adverse movements in the market and/or other traders seeking to “game” the system.

Claims

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

(a) receiving a plurality of orders from the traders into an electronic trading system;

(b) randomly delaying at least one of an execution time and a liquidity notification event for at least some of the orders; and

(c) executing the orders in the electronic trading system.

2. The method of claim 1, wherein step (b) comprises randomly delaying the execution time for said at least some of the orders.

3. The method of claim 2, wherein the traders are assigned risk profiles, and wherein step (b) comprises randomly delaying the execution time by a value in a range selected in accordance with the risk profile of a trader who placed the order.

4. The method of claim 2, wherein step (b) is performed only for orders placed in response to a system indicator.

5. The method of claim 2, wherein step (b) does not affect a price-time priority of said at least some of the orders.

6. The method of claim 1, wherein step (b) comprises randomly delaying the liquidity notification event for at least some of the orders.

7. The method of claim 6, wherein the liquidity notification comprises a display of a symbol on a block board of watch list.

8. The method of claim 6, wherein the traders are assigned risk profiles, and wherein step (b) comprises randomly delaying the liquidity notification by a value in a range selected in accordance with the risk profile of a trader who placed the order.

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

(a) receiving, into an electronic trading system, an indication of a limit that one of the traders has placed on an order with an externally established price range;

(b) comparing the limit to the externally established price range; and

(c) when the limit lies outside of the externally established price range, performing at least one of (i) preventing a trade and (ii) notifying the trader.

10. The method of claim 9, wherein both steps (c)(i) and (c)(ii) are performed.

11. A method for facilitating trading of items among a plurality of traders, wherein the plurality of traders are grouped into components, the method comprising:

(a) receiving an from one of the traders into an electronic trading system, wherein the order includes an indication of which component or components of the plurality of traders will receive the order; and

(b) making the order visible only to the component or components indicated.

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

a communication component for receiving a plurality of orders from the traders into an electronic trading system; and

a trading server for randomly delaying at least one of an execution time and a liquidity notification event for at least some of the orders and executing the orders in the electronic trading system.

13. The system of claim 12, wherein the trading server randomly delays the execution time for said at least some of the orders.

14. The system of claim 13, wherein the traders are assigned risk profiles, and wherein the trading server randomly delays the execution time by a value in a range selected in accordance with the risk profile of a trader who placed the order.

15. The system of claim 13, wherein the trading server randomly delays only for orders placed in response to a system indicator.

16. The system of claim 13, wherein said random delaying does not affect a price-time priority of said at least some of the orders.

17. The system of claim 12, wherein the trading server randomly delays the liquidity notification event for at least some of the orders.

18. The system of claim 17, wherein the liquidity notification comprises a display of a symbol on a block board of watch list.

19. The system of claim 17, wherein the traders are assigned risk profiles, and wherein the trading server randomly delays the liquidity notification by a value in a range selected in accordance with the risk profile of a trader who placed the order.

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

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

a trading server, in electronic communication with the communication component, for;

(a) receiving an indication of a limit that one of the traders has placed on an order with an externally established price range;

(b) comparing the limit to the externally established price range; and

(c) when the limit lies outside of the externally established price range, performing at least one of (i) preventing a trade and (ii) notifying the trader.

21. The system of claim 20, wherein the trading server performs both steps (c)(i) and (c)(ii).

22. A system for facilitating trading of items among a plurality of traders, wherein the plurality of traders are grouped into components, the system comprising:

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

a trading server, in electronic communication with the communication component, for;

(a) receiving an from one of the traders into an electronic trading system, wherein the order includes an indication of which component or components of the plurality of traders will receive the order; and

(b) making the order visible only to the component or components indicated.

23. 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 plurality of orders from the traders into an electronic trading system;

(b) randomly delaying at least one of an execution time and a liquidity notification event for at least some of the orders; and

(c) executing the orders in the electronic trading system.

24. 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, into an electronic trading system, an indication of a limit that one of the traders has placed on an order with an externally established price range;

(b) comparing the limit to the externally established price range; and

(c) when the limit lies outside of the externally established price range, performing at least one of (i) preventing a trade and (ii) notifying the trader.

25. An article of manufacture for facilitating trading of items among a plurality of traders, wherein the plurality of traders are grouped into components, 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 an from one of the traders into an electronic trading system, wherein the order includes an indication of which component or components of the plurality of traders will receive the order; and

(b) making the order visible only to the component or components indicated.