System and Method for Trading Options
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Accused Products
Abstract
A system and method of trading option contracts, such as foreign currency option contracts, is described. In one embodiment, a system and method for web-based or network-based interactive trading of currency options is described. Users of the system provide volatility runs of currency options, deal on existing offers to sell or bids to buy, or may improve on existing offers to sell or bids to buy. The system and method provide automatic price quotations for a requested option contract by polling internal volatility surfaces of users for prices on the requested contract, and ensure a more orderly pattern of trades by categorizing the users into discrete tiers which determine a user'"'"'s obligations to provide offers and bids to the system and which determine a user'"'"'s opportunities and rights to trade on the system.
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Citations
86 Claims
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1-56. -56. (canceled)
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57. A computerized system for trading options, the system comprising:
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a system server operating protocols to; enter runs of offers to sell and bids to buy options, enter offers to sell and bids to buy specific interest options, deal on offers to sell or bids to buy options, and improve on offers to sell or bids to buy options by a first tier of users; enter runs of offers to sell and bids to buy options, deal on offers to sell or bids to buy options, and improve on offers to sell or bids to buy options by a second tier of users, wherein at least one of the protocols precludes the second tier users from entering offers to sell or bids to buy specific interest options; receive a user'"'"'s quote for an offer to sell or a bid to buy an option contract, the option contract having an underlying financial instrument having a current market price; receive a period of time defined by the user corresponding to the quote, wherein a protocol withdraws the quote if the corresponding period of time expires; and receive a spot price for the financial instrument underlying the option contract provided by the user corresponding to the quote, wherein a protocol compares the user'"'"'s spot price to the current market price for the financial instrument underlying the option contract, and withdraws the user'"'"'s quote if the user'"'"'s spot price equals the current market price for the financial instrument underlying the option contract; workstations for receiving offer and bid information on option contracts from users, and for displaying offer and bid information on options to users; and a communication link that receives and transmits communications between users and the system server, including communications to users that are parties to a completed option contract, the communications providing information concerning the completed contract, wherein a run is a dealer'"'"'s set of prices to buy and sell tenors for options in a particular financial instrument underlying an option contract. - View Dependent Claims (58, 59, 60, 61, 62, 63)
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64. A computerized system for trading currency options, the system comprising:
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a system server operating protocols to; enter runs of offers to sell and bids to buy options, enter offers to sell and bids to buy specific interest options, deal on offers to sell or bids to buy options and improve on outstanding offers to sell or bids to buy options by a first tier of users; enter runs of offers to sell and bids to buy options, deal on offers to sell or bids to buy options and improve on offers to sell or bids to buy options by a second tier of users, wherein a protocol precludes the second tier users from entering offers to sell specific interest options and bids to buy specific interest options; and deal on offers to sell or bids to buy options by a third tier of users, wherein a protocol precludes third tier users from entering runs of offers to sell and bids to buy options, entering offers to sell and bids to buy specific interest options and improving on offers to sell or bids to buy options; and receive a user'"'"'s quote for an offer to sell or a bid to buy an option contract, the option contract having an underlying financial instrument having a current market price; receive a period of time defined by the user corresponding to the quote, wherein a protocol withdraws the quote if the corresponding period of time expires; and receive a spot price for the financial instrument underlying the option contract provided by the user corresponding to the quote, wherein a protocol compares the user'"'"'s spot price to the current market price for the financial instrument underlying the option contract, and withdraws the user'"'"'s quote if the user'"'"'s spot price equals the current market price for the financial instrument underlying the option contract; workstations for receiving offer and bid information on options from users and for displaying offer and bids information on options to users; and a communication link that receives and transmits communications between users and the system server, including communications to users that are parties to a completed system transaction, the communications providing information concerning the completed contract, wherein a run is a dealer'"'"'s set of prices to buy and sell tenors for options in a particular financial instrument underlying an option contract. - View Dependent Claims (65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77)
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78. A computer system method for trading of currency option contracts on a comprising:
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providing by a computer system to a plurality of users offers to sell and bids to buy options, wherein the plurality of users comprises a first tier of users, a second tier of users, and a third tier of users; receiving by the computer system from the first tier of users (i) a set of runs of offers to sell and bids to buy options and (ii) a first set of commands to deal on offers to sell or bids to buy options and (iii) a first set of improvements to offers to sell or bids to buy options; receiving by the computer system from the second tier of users (i) a second set of commands to deal on offers to sell or bids to buy options and (ii) a second set of improvements to offers to sell or bids to buy options; receiving by the computer system from the third tier of users a third set of commands to deal on offers to sell or bids to buy options; receiving by the computer system a user'"'"'s quote for an offer to sell or a bid to buy an option contract, the option contract for a financial instrument having a current market price, the quote previously defined in a run; receiving by the computer system a period of time defined by the user corresponding to the quote; withdrawing by the computer system the quote if the corresponding period of time expires; receiving by the computer system a defined value for the financial instrument underlying the option contract provided by the user corresponding to the quote; comparing by the computer system the user'"'"'s defined value for the financial instrument to the current market price for the financial instrument; withdrawing by the computer system the user'"'"'s quote if the user'"'"'s defined value for the financial instrument equals the current market price for the financial instrument; engaging by the computer system in a sell or buy transaction in accordance with the first, second, or third commands to deal on offers to sell or bids to buy options; and transmitting by the computer system information concerning a transaction to all users party to the transaction, wherein a run is a dealer'"'"'s set of prices to buy and sell tenors for options in a particular financial instrument underlying an option contract. - View Dependent Claims (79, 80, 81, 82, 83, 84, 85, 86)
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Specification