SYSTEMS AND METHODS FOR ESTABLISHING FIRST ON THE FOLLOW TRADING PRIORITY IN ELECTRONIC TRADING SYSTEMS

• US 20130138546A1
• Filed: 07/23/2012
• Published: 05/30/2013
• Est. Priority Date: 01/09/2006
• Status: Abandoned Application

• Current Assignee: Howard Lutnick, Joseph Noviello, Michael Sweeting
• Original Assignee: Howard Lutnick, Joseph Noviello, Michael Sweeting
• Inventors: Lutnick, Howard W., Noviello, Joseph, Sweeting, Michael
• Application Number:
  US13/555,837
• Publication Number:
  US 20130138546A1
• Time in Patent Office: Days
• US Class Current: 705/37
• 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

Abstract

Systems and methods for trading an item in an electronic trading system are provided. The method preferably includes transitioning the trading system from a first trading state to a second trading state. Once the trading system has transitioned to the second state, the method includes determining whether an existing order qualifies for trading priority and/or exclusivity in the second trading state with respect to an incoming contra order. This determining of trading rights in the second trading state is preferably based on the status of trading priority in the first trading state and also a set of predetermined criteria with respect to an incoming contra order in the second trading state. If the existing order qualifies for trading priority, then the system preferably presents the incoming contra order for trading exclusively or semi-exclusively to the participant associated with the existing order.

Claims

1. A method for trading an item in an electronic trading system comprising at least one computing device, the method comprising:

transitioning, by the at least one computing device, the trading system from a first trading state to a second trading state, wherein the first trading state comprises an active trading state during which a plurality of participants at least one of negotiate and trade the item therein, and wherein the second trading state comprises a bid/offer state during which participants enter their respective bids and offers;

determining, by the at least one computing device, whether an existing order having first on the follow priority status at a conclusion of the first state qualifies for trading priority in the second trading state with respect to an incoming contra order received after the existing order, the incoming contra order received from at least one workstation coupled to the at least one computing device, the qualifying of trading priority of the existing order in the second trading state being based on the first one follow priority status of the existing order at the conclusion of the first trading state and being based on a set of predetermined criteria in the second trading state;

presenting, by the at least one computing device, the incoming contra order for trading exclusively or semi exclusively to a participant associated with the existing order based on the existing order qualifying for trading priority in the second trading state with respect to the incoming contra order.

2. The method for trading an item according to claim 1 wherein the qualifying of trading priority of the existing order in the second trading state comprises querying whether the existing order satisfies a minimum size requirement.

3. The method for trading an item according to claim 1 wherein the determining comprises querying whether the size of the existing order exceeds a percentage of the size of the incoming contra order and wherein the existing order is further qualified based on the size of the existing order exceeding the percentage of the size of the incoming order.

4. The method for trading an item according to claim 1 wherein the determining comprises querying whether the existing order is within a predetermined delta of the incoming contra order and wherein the existing order is further qualified based on the size of the existing order being within the predetermined delta.

5. The method for trading an item according to claim 1 wherein the determining comprises querying whether the incoming contra order satisfies a minimum size requirement and wherein the existing order is further qualified based on the size of the incoming order exceeding the minimum size requirement.

6. The method for trading an item according to claim 1 wherein the determining comprises querying whether the size of the incoming contra order exceeds a percentage of the size of the existing order and wherein the existing order is further qualified based on the size of the incoming order exceeding the percentage of the size of the existing order.

7. The method for trading an item according to claim 1 wherein the determining comprises querying whether the incoming contra order is within a predetermined delta of the existing order and wherein the existing order is further qualified based on the size of the incoming order being within the predetermined delta.

24. The method of claim 1, wherein the participant associated with the existing order traded the item with exclusivity during at least a portion of the first trading state and wherein the existing order is further qualified based on determining that the participant traded with exclusivity during at least a portion of the first trading state.

25. The method of claim 1, further comprising:

determining by the at least one computing device that a price of the received contra order is within a predetermined delta of a price of the best order; and

wherein determining that the participant has the right to trade exclusively against the received contra order comprises determining that the participant has the right to trade exclusively against the received contra order based at least in part on determining that the price of the received contra order is within the predetermined delta of the price of the best order.

26. The method of claim 1,

wherein the orders pending at the conclusion of the first trading state comprise bids pending at the conclusion of the first trading state;

and

wherein the existing order comprises a best bid having a best price from among the pending bids; and

wherein the received contra order comprises an offer.

27. The method of claim 1, further comprising:

based at least in part on the act of presenting, automatically modifying by the at least one computing device the existing order, wherein modifying the existing order does not affect the potential trading priority of the existing order.

28. The method of claim 27, wherein modifying the existing order comprises at least one of:

modifying a size of the existing order and modifying a price of the existing order.

29. The method of claim 27,

wherein the existing order comprises a bid;

and

wherein modifying the existing order comprises at least one of reducing a size of the bid and reducing a price of the bid.

30. The method of claim 27, wherein the at least one computing device automatically modifies the best order based at least in part on instructions preset by the participant.

31. The method of claim 27, wherein the at least one computing device automatically modifies the best order based at least in part on a preset default of the at least one computing device.

32. The method of claim 1,

wherein the existing order comprises (i) a hidden size not shown to other participants and (ii) a displayed size shown to other participants;

and

wherein the hidden size and the displayed size are considered in determining that the size of the best order satisfies the minimum size requirement.

33. The method of claim 1,

wherein the best order comprises (i) a hidden size not shown to other participants and (ii) a displayed size shown to other participants;

and

wherein only the displayed is considered in determining that the size of the best order satisfies the minimum size requirement.

34. The method of claim 1, wherein the at least one computing device automatically executes the trade against the received contra order based at least in part on instructions preset by the participant.

8. A computer system for trading an item in an electronic trading system, the computer system comprising:

at least one computing device;

at least one memory having instructions stored thereon which, when executed by the at least one computing device, direct the at least one processor to perform a method comprising;

transitioning the trading system from a first trading state to a second trading state, wherein the first trading state comprises an active trading state during which a plurality of participants at least one of negotiate and trade the item therein, and wherein the second trading state comprises a bid/offer state during which participants enter their respective bids and offers;

determining that an existing order having first on the follow priority status at the conclusion of the first trading state qualifies for trading priority in the second trading state with respect to an incoming contra order based on the first on the follow priority status of the existing order at the conclusion of the first trading state and based on the existing order satisfying a set of predetermined criteria, the incoming order received after the existing order from at least one workstation coupled to the at least one computing device; and

presenting the incoming order for trading exclusively to a participant associated with the existing order based on the existing order qualifying for trading priority in the second trading state with respect to the incoming contra order.

9-22. -22. (canceled)

23. A method for trading an item in an electronic trading system, the method comprising:

identifying, by at least one computing device, a current order;

receiving, by the at least one computing device an incoming contra order;

determining, by the at least one computing device, whether the current order possesses exclusive privileges to be traded with the incoming contra order, in which the act of determining whether the current order possesses exclusive trading privileges to be traded with the incoming contra order comprises determining that the current order does possess exclusive trading privileges to be traded with the incoming contra order;

determining that a second order exists in the system and includes an indication to trade with the incoming contra order if the current order declines to trade with the incoming contra order; and

based on the act of determining that the current order does possess exclusive trading privileges to be traded with the incoming contra order and the act of determining that a second order exists in the system and includes an indication to trade with the incoming contra order if the current order declines to trade with the incoming contra order, executing, by the at least one processor, a trade between the incoming contra order and the current order.