SYSTEM AND METHOD FOR CHANGING ORDER PRIORITY LEVELS IN AN ELECTRONIC TRADING ENVIRONMENT

• US 20100228643A1
• Filed: 05/14/2010
• Published: 09/09/2010
• Est. Priority Date: 08/29/2003
• Status: Active Grant

• Current Assignee: Trading Technologies International, Inc.
• Original Assignee: Trading Technologies International, Inc.
• Inventors: Monroe, Fred
• Granted Patent: US 8,078,519 B2
• Time in Patent Office: Days
• US Class Current: 705/26
• CPC Class Codes: G06Q 30/00 Commerce
• CPC Class Codes: G06Q 30/0601 Electronic shopping [e-shopping]
• 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
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A system and method for fee-based order priority level modification in an electronic trading environment are described. When an order reaches an exchange, a priority level of the order may be changed to a higher priority level, and the priority level of the order initially at the higher priority level may be changed to a lower priority level of the received order. In one embodiment, a trader who is gaining a higher priority level will be preferably charged a fee for having his order moved to the higher priority level, and at least a portion of that fee may be paid to a trader who is giving up his high priority level.

Claims

1. A method for changing priority levels of orders in an electronic trading environment, the method comprising:

receiving a first order to trade a first quantity of a tradeable object at a price via an electronic exchange, the first order including a first user-identified priority for the order; and

sorting the first order in an order book for the tradeable object at the electronic exchange according to the price and the first user-identified priority, where the first order is arranged into an order queue for order matching by the electronic exchange according to a match algorithm of the electronic exchange and prioritized within the order queue according to the first user-identified priority and a second user-identified priority of a second order.

2. The method of claim 1 where sorting the first order comprises swapping positions of the first order and the second order in the order queue according to the first user-identified priority and the second user-identified priority.

3. The method of claim 1, further comprising assessing a fee associated with sorting the first order to a trader associated with the first order.

4. The method of claim 3, further comprising crediting a trader associated with the second order.

5. The method of claim 1 where the second order comprises a second quantity being less than the first quantity and where sorting comprises swapping positions for a portion of the first quantity with the second quantity in the order queue.

6. The method of claim 1 where the second order comprises a second quantity being greater than the first quantity and where sorting comprises swapping positions for the first quantity with a portion of the second quantity in the order queue.

7. The method of claim 1 where sorting the first order comprises transferring ownership of the first order and the second order.

8. The method of claim 1, further comprising displaying a queue position for the first order on a graphical user interface.

9. The method of claim 1, further comprising matching at least a portion of the first order via the electronic exchange prior to matching at least a portion of the second order via the electronic exchange.

10. A computer readable medium having computer-executable instructions stored thereon, which when executed by a processor cause the processor to perform acts comprising:

receiving a first order to trade a first quantity of a tradeable object at a price via an electronic exchange, the first order including a first user-identified priority for the order; and

sorting the first order in an order book for the tradeable object at the electronic exchange according to the price and the first user-identified priority, where the first order is arranged into an order queue for order matching by the electronic exchange according to a match algorithm of the electronic exchange and prioritized within the order queue according to the first user-identified priority and a second user-identified priority of a second order.

11. The method of claim 10 where sorting the first order comprises swapping positions of the first order and the second order in the order queue according to the first user-identified priority and the second user-identified priority.

12. The method of claim 10, further comprising assessing a fee associated with sorting the first order to a trader associated with the first order.

13. The method of claim 12, further comprising crediting a trader associated with the second order.

14. The method of claim 10 where the second order comprises a second quantity being less than the first quantity and where sorting comprises swapping positions for a portion of the first quantity with the second quantity in the order queue.

15. The method of claim 10 where the second order comprises a second quantity being greater than the first quantity and where sorting comprises swapping positions for the first quantity with a portion of the second quantity in the order queue.

16. The method of claim 10 where sorting the first order comprises transferring ownership of the first order and the second order.

17. The method of claim 10, further comprising displaying a queue position for the first order on a graphical user interface.

18. The method of claim 10, further comprising matching at least a portion of the first order via the electronic exchange prior to matching at least a portion of the second order via the electronic exchange.

19. A method for changing priority levels of orders in an electronic trading environment, the method comprising:

receiving a plurality of orders to trade a tradeable object via an electronic exchange, each order of the plurality of orders including a user-identified priority for the order; and

sorting each of the plurality of orders in an order book for the tradeable object at the electronic exchange according to a price for each of the plurality orders and the user-identified priority, where each order is arranged into an order queue for order matching by the electronic exchange according to a match algorithm of the electronic exchange and prioritized within the order queue according to user-identified priority.

20. A method for changing priority levels of orders in an electronic trading environment, the method comprising:

receiving a plurality of orders to trade a tradeable object via an electronic exchange, each order of the plurality of orders including a user-identified priority for the order; and

sorting each of the plurality of orders in an order book for the tradeable object at the electronic exchange according to a price for each of the plurality orders and the user-identified priority, where each order is arranged into an order queue for order matching by the electronic exchange according to a match algorithm of the electronic exchange and prioritized within the order queue according to user-identified priority.