SYSTEM AND METHOD THAT PROVIDE INCENTIVES TO QUALIFIED USERS OF AN ELECTRONIC TRADING SYSTEM

• US 20100306042A1
• Filed: 08/09/2010
• Published: 12/02/2010
• Est. Priority Date: 06/15/1999
• Status: Active Grant

• Current Assignee: CFPH LLC (Cantor Fitzgerald, L.P.)
• Original Assignee: CFPH LLC (Cantor Fitzgerald, L.P.)
• Inventors: FRASER, Stuart A., Lutnick, Howard W., Ginsberg, Philip M., Kirwin, Glenn D.
• Granted Patent: US 8,498,922 B2
• Time in Patent Office: Days
• US Class Current: 705/14.31
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 30/0222 During e-commerce, i.e. online transactions
• CPC Class Codes: G06Q 30/0231 Awarding of a frequent usage incentive independent of the monetary value of a good or service purchased, or distance travelled
• CPC Class Codes: G06Q 30/0235 constrained by time limit or expiration date
• 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 99/00 Subject matter not provided for in other groups of this subclass

Abstract

Systems and methods for electronic trading that provide incentives to users of a trading system. The systems and methods may monitor a trading activity of the user and determine that the orders submitted by the user over a period of time exceed a first pre-determined threshold. Systems and methods also determine that a spread of the plurality of orders exceeds a second pre-determined threshold. Based on these determinations, the user is designated as qualifying for a special status, which entitles the user to incentives in trading. Systems and methods apply the incentives to an order submitted by the user. One such incentive provides the user with a priority in a trading queue, where orders submitted by the user are executed in advance of other orders in the trading queue.

Claims

1. A method comprising:

monitoring a trading activity of a user of a trading system;

determining, based on the act of monitoring, that a plurality of orders submitted by the user over a period of time exceeds a first pre-determined threshold and that a spread of the plurality of orders exceeds a second pre-determined threshold;

designating, based on the act of determining, that the user qualifies for a special status;

determining, based on the special status, that the user is entitled to at least one incentive in trading;

applying the at least one incentive to an order submitted by the user, in which the at least one incentive provides the user with a priority in a trading queue; and

executing the order in advance of other orders in the trading queue, in which the order was submitted after the other orders were submitted.

2. The method of claim 1, in which the special status is a designated primary market maker.

3. The method of claim 1 further comprising:

determining, based on the act of monitoring, that the user has sufficient credit acceptability.

4. The method of claim 1 further comprising:

determining, based on the act of monitoring, that the user is sponsored by at least one other user of the trading system.

5. The method of claim 1 further comprising:

determining, based on the act of monitoring, that the user meets a pre-determined value level.

6. The method of claim 1 further comprising:

determining, based on the act of monitoring, that the user satisfies an order placement level.

7. The method of claim 1, in which at least one other incentive provides the user with exclusivity to place bids and offers.

8. The method of claim 7 further comprising:

providing the user with an exclusive opportunity to place a bid or offer on a first order; and

blocking other users from an ability to place a bid or offer on the first order.

9. The method of claim 1, in which at least one other incentive comprises:

a reduction in a transaction cost for processing an order submitted by the user.

10. The method of claim 1, in which at least one other incentive comprises:

no transaction cost for processing an order submitted by the user.

11. The method of claim 1 further comprising:

determining, based on the act of monitoring, that a plurality of orders submitted by the user over a second period of time fails to meet the first pre-determined threshold;

revoking, in response to the determination, the special status of the user; and

determining, based on the revoked special status, that the user no longer qualifies for the at least one incentive.

12. The method of claim 1 further comprising:

determining, based on the act of monitoring during a second period of time, that a spread of the plurality of orders fails to meet the second pre-determined threshold;

revoking, in response to the determination, the special status of the user; and

determining, based on the revoked special status, that the user no longer qualifies for the at least one incentive.

13. An apparatus comprising:

a processor; and

a memory, in which the memory stores instructions which, when executed by the processor, direct the processor to perform the method of claim 1.

14. The apparatus of claim 13, in which the memory further stores instructions which, when executed by the processor, direct the processor to perform the method of claim 2.

15. The apparatus of claim 13, in which the memory further stores instructions which, when executed by the processor, direct the processor to perform the method of claim 3.

16. The apparatus of claim 13, in which the memory further stores instructions which, when executed by the processor, direct the processor to perform the method of claim 4.

17. The apparatus of claim 13, in which the memory further stores instructions which, when executed by the processor, direct the processor to perform the method of claim 5.

18. The apparatus of claim 13, in which the memory further stores instructions which, when executed by the processor, direct the processor to perform the method of claim 6.

19. The apparatus of claim 13, in which the memory further stores instructions which, when executed by the processor, direct the processor to perform the method of claim 7.

20. The apparatus of claim 19, in which the memory further stores instructions which, when executed by the processor, direct the processor to perform the method of claim 8.

21. The apparatus of claim 13, in which the memory further stores instructions which, when executed by the processor, direct the processor to perform the method of claim 9.

22. The apparatus of claim 13, in which the memory further stores instructions which, when executed by the processor, direct the processor to perform the method of claim 10.

23. The apparatus of claim 13, in which the memory further stores instructions which, when executed by the processor, direct the processor to perform the method of claim 11.

24. The apparatus of claim 13, in which the memory further stores instructions which, when executed by the processor, direct the processor to perform the method of claim 12.