SYSTEM, METHOD, AND COMPUTER-READABLE MEDIUM FOR IMPROVING THE EFFICIENCY AND STABILITY OF FINANCIAL MARKETS

• US 20130297478A1
• Filed: 03/14/2013
• Published: 11/07/2013
• Est. Priority Date: 05/03/2012
• Status: Active Grant

• Current Assignee: Tamer Trading Technologies LLC
• Original Assignee: Tamer Trading Technologies LLC
• Inventors: Mannix, Brian F.
• Granted Patent: US 10,127,612 B2
• 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
• CPC Class Codes: H04L 43/0852 Delays

Abstract

A method to assist in the operation of a financial market. The method including receiving one or more transaction messages, where the one or more transaction messages include one or more orders or order commitments to be executed on the financial market; imposing one or more delays on the one or more orders or order commitments using a delay algorithm; processing the one or more order or order commitments by opening the one or more transaction messages after the one or more delays; matching the opened orders or order commitments; and executing the matched orders or order commitments.

Claims

1. ) A computer-implemented method to assist in the operation of a financial market comprising:

receiving one or more transaction messages by a computer system having one or more processors, wherein the one or more transaction messages include one or more orders or order commitments to be executed on the financial market;

imposing one or more delays on the one or more orders or order commitments by the computer system using a delay algorithm;

processing, by the computer system, the one or more order or order commitments by opening the one or more transaction messages after the one or more delays;

matching, by the computer system, the opened orders or order commitments; and

executing, by the computer system, the matched orders or order commitments.

2. ) The method of claim 1, further comprising:

decrypting the one or more orders or order commitments after the associated delay, wherein the one or more orders or order commitments are received encrypted;

3. ) The method of claim 1, further comprising:

protecting the one or more orders or order commitments from disclosure to a third party for the duration of the delay.

4. ) The method of claim 1, wherein orders or order commitments that have not been subjected to the one or more delays are excluded from matching, wherein the matching exclusion includes at least one of:

temporary matching exclusion, permanent matching exclusion, partial matching exclusion, or complete matching exclusion.

5. ) The method of claim 1, wherein the one or more delays represents at least one of:

a random period of time, or

a randomly determined position in a queue.

6. ) The method of claim 1, wherein the delay is adjusted in response to observations of at least one of:

sudden price movements, unusually high or low trading volume, one-sided order flow, low liquidity, or market volatility.

7. ) The method of claim 1, further comprising:

verifying that the one or more orders or order commitments have not been altered prior to execution.

8. ) The method of claim 1, wherein the one or more orders or order commitments comprises an instruction to buy or sell at least one of:

an equity, a stock, a bond, a mutual fund, an option, a bank note, a security, debt, a contract, an exchanged traded fund, an index fund, a currency, an asset, a liability, a portfolio of assets, a commodity, a future, a derivative, or a hedge.

9. ) The method of claim 1, wherein the financial market is at least one of:

an exchange, an off-exchange trading pool, or a venue that facilitates continuous financial trading.

10. ) The method of claim 1, wherein the period of time represented by the delay is greater than 100 nanoseconds and less than 10 minutes.

11. ) A financial exchange system to assist in the operation of a financial market comprising:

a storage device comprising a temporal buffer;

an input device configured to receive one or more orders or order commitments to buy or sell a financial instrument on the financial market; and

at least one processor configured to;

insert the one or more orders or order commitments into the temporal buffer,

calculate a delay to be applied to one or more orders or order commitments based on positions of the one or more orders or order commitments within the temporal buffer, and

expose one or more orders or order commitments to the financial market for execution after the associated delay.

12. ) The financial exchange system of claim 11, wherein the financial instrument is offered only through the financial exchange system and is identical to a second financial instrument traded at a separate second financial exchange system.

13. ) The financial exchange system of claim 11, wherein the one or more orders or order commitments are received encrypted.

16. ) The financial exchange system of claim 11, wherein the financial market is at least one of:

an exchange, an off-exchange trading pool, or a venue that facilitates continuous financial trading.

17. ) The financial exchange system of claim 11, wherein every order or order commitment for the financial instrument received by the financial exchange is inserted into the temporal buffer.

14. ) The financial exchange system of claim 14, wherein the at least one processor is further configured to:

decrypt the one or more orders or order commitments after the associated delay and prior to exposing the one or more orders or order commitments to the financial market for execution.

15. ) The financial exchange system of claim 14, wherein the at least one processor is further configured to:

verify that the one or more orders or order commitments have not been altered, prior to exposing the decrypted one or more orders to the financial market for execution.

18. ) One or more tangible non-transitory computer-readable storage media for storing computer-executable instructions executable by a computer system having at least one processor, the media storing one or more instructions for:

receiving one or more orders or order commitments by the computer system, wherein the one or more orders or order commitments includes an instruction to buy or sell a financial instrument or commodity on a financial market;

calculating a delay to be applied to the one or more orders or order commitments by the computer system using a delay algorithm;

associating the delay with the one or more orders or order commitments by the computer system; and

exposing the one or more orders or order commitments to the financial market for execution, by the computer system, after the associated delay.

19. ) The media of claim 18, wherein the one or more orders or order commitments are received encrypted.

20. ) The media of claim 19, further comprising:

decrypting the one or more orders or order commitments after the associated delay; and

verifying that the one or more orders or order commitments have not been altered prior to exposing the decrypted one or more orders or order commitments to the financial market for execution.

21. ) The media of claim 18, wherein:

the financial market is a single financial exchange,

the financial instrument or commodity is offered only through the single financial exchange, and

the financial instrument or commodity is identical to a second financial instrument or commodity traded at a separate second financial exchange.