System and Method for Electronic Spread Trading in Real and Synthetically Generated Markets

• US 20100241591A1
• Filed: 04/22/2010
• Published: 09/23/2010
• Est. Priority Date: 12/04/2003
• Status: Active Grant

• Current Assignee: Trading Technologies International, Inc.
• Original Assignee: Trading Technologies International, Inc.
• Inventors: Fishbain, Michael L.
• Granted Patent: US 8,630,939 B2
• Time in Patent Office: Days
• US Class Current: 705/36.R
• 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 are provided to analyze synthetic and real markets that offer interchangeable tradable objects to find market opportunities that a trader may capitalize on. A synthetic market is an electronic market created out of real markets by a computer terminal or gateway. A real market is an electronic market that is offered by an electronic exchange. If a desirable market opportunity is found, the preferred embodiments can take action such as by sending orders to either one of the markets, or by sending orders to both markets. An advantage of the preferred embodiments, among many others, is that they can make “invisible” trading opportunities more readily apparent.

Claims

1-19. -19. (canceled)

20. A system for electronic trading, the system including:

a computing device adapted to receive a command to buy or sell a spread,

wherein the spread is associated with a first real market and a second real market, and

wherein the first and second real markets are offered by at least one electronic exchange,

wherein the computing device is adapted to determine a plurality of spread markets that offer interchangeable tradable objects,

wherein a first spread market of the plurality of spread markets is a synthetic spread market that is generated outside of an electronic exchange and associated with the first real market and the second real market,

wherein a second spread market of the plurality of spread markets is an exchange-provided spread market that is also associated with the first real market and the second real market,

wherein the computing device is adapted to determine a first price for which the spread can be bought or sold in the first spread market and a second price for which the spread can be bought or sold in the second spread market,

wherein the computing device is adapted to, in response to receiving the command, determine whether to

buy or sell in the first spread market,

buy or sell in the second spread market, or

buy or sell in both the first and second spread markets based on the determined first price and the determined second price, and

wherein the computing device is adapted to responsively

send a first spread market order for at least one of the first and second real markets when it is determined to buy or sell in the first spread market,

send a second spread market order for the exchange-provided spread market when it is determined to buy or sell in the second spread market, or

send the first spread market order for at least one of the first and second real markets and send the second spread market order to the exchange-provided spread market when it is determined to buy or sell in both the first and second spread markets.

21. The system of claim 20, wherein the computing device is further adapted to receive a first data feed from an electronic exchange for the first real market, wherein the computing device is further adapted to receive a second data feed from an electronic exchange for the second real market, and wherein the computing device is further adapted to receive a third data feed from an electronic exchange for the exchange-provided spread market.

22. The system of claim 21, wherein the computing device is further adapted to generate the synthetic spread market from the first and second data feeds.

23. The system of claim 20, wherein at least one of the first price and the second price is determined based on a quantity available.

24. The system of claim 20, wherein the command is a manual instruction from a user input device.

25. The system of claim 20, wherein the command is an automatic instruction from an automated trading tool.

26. The system of claim 20, wherein the computing device includes a computer terminal.

27. The system of claim 20, wherein the computing device includes a gateway.

28. The system of claim 20, wherein the computing device is part of a cluster of computing devices.

29. The system of claim 20, wherein the first real market is at the same electronic exchange as the second real market.

30. The system of claim 20, wherein the first real market is at a different electronic exchange than the second real market.

31. The system of claim 20, wherein the computing device determines to buy or sell in the first spread market when the determined first price is better than the determined second price.

32. The system of claim 20, wherein the computing device determines to buy or sell in the second spread market when the determined second price is better than the determined first price.

33. The system of claim 20, wherein the computing device determines whether to buy or sell in the first spread market, buy or sell in the second spread market, or buy or sell in both the first and second spread markets based on quantity available in at least one of the first spread market and the second spread market.

34. The system of claim 20, wherein the computing device is further adapted to send a message to delete a portion of the first spread market order when a partial fill is received for the second spread market order and to send a message to delete a portion of the second spread market order when a partial fill is received for the first spread market order.

35. The system of claim 20, wherein the interchangeable tradable objects include semi-interchangeable tradable objects.

36. The system of claim 20, wherein the computing device determines the plurality of spread markets based at least in part on a user input.