Electronic Trading System Supporting Anonymous Negotiation and Indicators of Interest

• US 20100174654A1
• Filed: 01/05/2009
• Published: 07/08/2010
• Est. Priority Date: 10/05/1999
• Status: Active Grant

• Current Assignee: Bloomberg LP
• Original Assignee: Bloomberg LP
• Inventors: Bang, Kim, Foley, Kevin
• Granted Patent: US 8,401,951 B2
• Time in Patent Office: Days
• US Class Current: 705/80
• 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

A system conducts anonymous negotiations and supports indications-of-interest in trading stock. The system includes a database for storing public orders received from a public stock trading system; and a server for receiving hidden orders from a plurality of users and for conducting anonymous negotiations between first and second users with the hidden orders. The server repeatedly accesses the database to determine a match of any one of the hidden orders with any one of the public orders, and to execute a pair of orders selected from the hidden orders and the public orders. The system also transmits indicators-of-interest (IOIs) into a trading environment using the server for processing a trading order from a first user and for maintaining a profile of a user. The profile includes a current IOI setting for controlling transmission of the IOI from the user. The server responds to a toggle command from the first user to control transmission of the IOI opposite to the current IOI setting. The server responds to the IOI setting being set to allow transmission by transmitting the IOI of the first user associated with the trading order.

Claims

1. A method for electronically trading financial instruments over an electronic trading system while maintaining the identity of the trading parties anonymous with respect to each other and with respect to users of the trading system, comprising:

a first party via a first user station of the electronic trading system offering to buy or sell over the system a quantity of a financial instrument selected by the first party at a price selected by the first party from or to one or more counterparties selected by the first party;

the first party via the first user station and a counterparty via a second user station of the electronic trading system electronically agreeing to trade up to an agreed quantity of the financial instrument at an agreed price;

at least one computer of the electronic trading system determining if there is no better trade in at least one order for the financial instrument originating from outside the system for either the first party or the counterparty, and if there is no better trade, electronically executing the trade agreed to by the first party and the counterparty, and if there is a better trade in at least one order for the financial instrument originating from outside the system for either the first party or the counterparty, electronically executing the better trade.

2. The method of claim 1 including the at least one computer of the electronic trading system identifying users who have engaged in recent trade or order activity in particular financial instruments, and wherein the step of the first party offering to buy a quantity from or sell a quantity to one or more selected counterparties includes selecting via the first user station the one or more counterparties from the identified users.

3. The method of claim 1 comprising the first party and the counterparty electronically negotiating over the system via the first and second user stations respectively the price of the financial instrument or the quantity of the financial instrument, or both, prior to agreeing to the trade.

4. The method of claim 3 the step of the at least one computer determining if there is no better trade in the particular financial instrument for either the first party or the counterparty comprises determining if there is no better trade in the particular financial instrument for either the first party or the counterparty at least once during negotiating and at least once after completion of negotiating and before any trade is executed between the first party and the counterparty.

5. The method of claim 1 comprising users of the system selecting via respective user stations of the electronic trading system counterparties to whom the at least one computer automatically electronically conveys orders of respective users.

6. The method of claim 1 wherein the step of agreeing to trade up to an agreed quantity of the financial instrument includes agreement by the first party and the counterparty to trade for less than the full quantity offered at an agreed price.

7. A system for electronically conducting anonymous trades of financial instruments, including:

at least one computer with associated computer memory which electronically receives anonymous orders from user stations of a plurality of users of the system, and is programmed to support anonymous electronic negotiations over the system between a first user via a first user station and a second user via a second user station for a trade of a financial instrument;

the at least one computer also electronically receiving orders for the financial instrument originating from outside the system and being programmed to electronically execute;

a trade of matching orders of users of the system;

a trade of an order from a user of the system matched with an order originating from outside the system;

a trade negotiated by a first and a second user of the system via respective user stations and the at least one computer in accordance with at least price and quantity terms agreed to by the first and second users;

a trade of an order of a first user of the system to a negotiated trade agreed to by the first user and a second user of the electronic trading system via respective user stations and an order originating from outside the system; and

a trade of an order of the second user of the system to the negotiated trade and an order originating from outside the system;

the at least one computer being programmed to execute a trade in accordance with a priority when the same trade becomes available;

between two orders originating within the system, and between an order originating from within the system and an order originating from outside the system.

8. The system of claim 7 wherein the at least one computer is programmed to provide priority of trade execution to orders originating within the system.

9. A system for electronically conducting anonymous negotiations in trading financial instruments comprising:

at least one computer with associated computer memory which electronically receives orders for financial instruments from user stations of a plurality of users and orders for the financial instruments originating from outside the system, the at least one computer being programmed to;

support anonymous negotiations between first and second users of orders for a financial instrument via respective user stations;

to repeatedly determine whether there is a match of any one of the orders from the first and second users with any one of the orders originating from outside the system; and

to execute a pair of orders selected from the orders from the first and second users and the orders originating from outside the system.

10. The system of claim 9 wherein the at least one computer is programmed to pair orders of the first and second users by anonymous negotiation and by acceptance by the first and second users received from respective user stations.

11. The system of claim 9 wherein the at least one computer is programmed to pair an order of the first user and an order originating from outside the system received by the at least one computer and matched to the first order.

12. The system of claim 9 wherein the at least one computer is programmed to conduct anonymous negotiations between the first user and a plurality of second users selected by the first user via respective user stations.

13. The system of claim 12 wherein the at least one computer is programmed to provide available second users from which the first user can select via the user station of the first user.

14. The system of claim 12 wherein the at least one computer is programmed to provide a pop-up input window to be presented to user stations of the first and second users to facilitate negotiations between the first and second users.

15. A method for electronically trading financial instruments over an electronic trading system while maintaining the identity of the trading parties anonymous with respect to each other and with respect to users of the trading system, the electronic trading system comprising at least one computer with associated computer memory adapted to communicate with users over a network, the method comprising:

the at least one computer receiving over the network anonymous orders from a plurality of users of the system;

the at least one computer receiving over the network orders for the financial instrument originating from outside the system;

the at least one computer electronically executing;

a trade of matching orders of users of the system;

a trade of an order from a user of the system matched with an order originating from outside the system;

a trade of an order received by the at least one computer comprising at least price and quantity terms agreed to by first and second users of the system;

a trade of an order of a first user of the system received by the at least one computer comprising terms agreed to by the first user and a second user of the system and an order originating from outside the system;

the at least one computer executing a trade in accordance with a priority when the same trade becomes available;

between two orders originating within the system, and

between an order originating from within the system and an order originating from outside the system.

16. A method for electronically trading financial instruments over an electronic trading system while maintaining the identity of the trading parties anonymous with respect to each other and with respect to users of the trading system, the electronic trading system comprising at least one computer with associated computer memory adapted to communicate with users over a network, the method comprising:

the at least one computer receiving an order of a first user of the electronic trading system offering to buy or sell over the system, the order comprising a quantity of a financial instrument and a price;

the at least one computer providing the order to be transmitted over the network to one or more counterparties selected by the first party;

the at least one computer receiving an order over the network comprising a quantity up to a quantity agreed to by the first party and the counterparty an a price agreed to by the first party and the counterparty;

at least one computer of the electronic trading system determining if there is no better trade in at least one order for the financial instrument originating from outside the system for either the first party or the counterparty, and if there is no better trade, electronically executing the trade agreed to by the first party and the counterparty, and if there is a better trade in at least one order for the financial instrument originating from outside the system for either the first party or the counterparty, electronically executing the better trade.