SYSTEMS AND METHODS FOR ELECTRONIC TRADING THAT PERMIT PRINCIPAL/BROKER TRADING

• US 20140101019A1
• Filed: 07/22/2013
• Published: 04/10/2014
• Est. Priority Date: 06/01/2001
• Status: Active Grant

• Current Assignee: BGC Partners Incorporated (BGC Group, Inc.)
• Original Assignee: BGC Partners Incorporated (BGC Group, Inc.)
• Inventors: Stergiopoulos, Andrew, Tselepis, William P., Gilbert, Andrew C.
• Granted Patent: US 8,886,561 B2
• Time in Patent Office: Days
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

Electronic trading systems and methods which facilitate principal/broker trading are provided. In a first aspect of the invention, a database relating to trading participants in the trading system is designed to indicate which traders utilize a principal/broker relationship and what, if any, limitations are placed on the activity of the broker, trading commands submitted by the broker, and counterparties in a transaction with the broker. In another aspect of the invention, trading commands and executed trades involving principals/brokers may be presented to other traders using special designations. The ability to enter certain trading commands by, and in response to, brokers may be limited. In a further aspect of the invention, anonymous trading features may prevent traders from knowing whether another trader is a broker or principal, may restrict traders from being able to block trading with brokers, and may permit brokers to configure anonymous trading parameters.

Claims

1. A method comprising the steps of:

receiving computer data signals conveying two passive trading orders for proposed transactions to be mediated with assistance of an electronic trading system, stored data for the orders indicating that a first of the two passive orders is entered with authority of a principal of the principal'"'"'s real party in interest, and the stored data indicating that a second of the two passive orders is entered with authority of a broker acting on behalf of the broker'"'"'s real party in interest from a broker workstation;

electronically determining presentation of the first and second passive orders to a prospective aggressor counterparty, a difference between the determined presentation of the two passive orders to the prospective aggressor counterparty being based at least in part on the stored indication of principal vs. broker authority, and preventing the prospective aggressor counterparty from acting on at least one of the passive trading orders based at least in part on a determination that the prospective aggressor is acting with the authority of a broker.

2. The method of claim 1, wherein:

the presenting includes displaying the first passive order in a different manner from the second passive order, the different presentations reflecting the respective principal and broker authorities of the passive orders'"'"' real parties in interest, wherein the different manner is using different colors, using different fonts, using flashing or hiding an unavailable passive order.

3. The method of claim 1, wherein:

the presentation to the prospective aggressor counterparty is by means of a display screen.

4. The method of claim 1, wherein:

preventing the prospective aggressor from acting on the passive trading order is executed by blocking the passive order from the prospective aggressor so that the aggressor'"'"'s trading command does not form part of the trade.

5. The method of claim 4, further comprising the step of:

automatically executing a part of the value of a one of the passive orders based at least in part on a status as principal or broker of the party that entered the passive order to be automatically executed.

6. The method of claim 1, further comprising the step of:

automatically executing at least part of the value of a one of the passive orders based at least in part on a status as principal or broker of the prospective aggressor counterparty.

7. The method of claim 1, further comprising:

preventing the prospective aggressor counterparty from acting on the second passive order based at least in part on the broker authority of the second passive order.

8. The method of claim 1, further comprising the steps of:

in an electronic trading system for anonymous trading, setting in a non-transitory memory of an electronic trading system trading limitations to be applied to trading by a trader designated by the restrictions, the limitations indicating restrictions on tradability of orders by the designated trader, the trading restrictions based at least in part on a principal vs. broker role of the counterparties that entered the respective orders, the settings available to be set including a setting enabling the designated trader to trade orders entered by counterparty principals on a less-restricted basis and enabling trading of orders entered by counterparty brokers on a more-restricted basis; and

imposing the trading limitations on the designated trader based at least in part on the stored trading limitation settings.

9. The method of claim 1, wherein:

the difference between the determined presentation includes presenting one of the two passive orders to the prospective aggressor counterparty, and blocking presentation of the other passive order.

10. The method of claim 1, wherein:

the difference between the determined presentation includes presenting the principal'"'"'s passive order to the prospective aggressor counterparty, and blocking presentation of the broker'"'"'s passive order.

11. The method of claim 1, wherein:

the determined presentation is further based at least in part on an comparison of the presented passive order to a warning limit between the prospective aggressor counterparty and the real party in interest associated with the passive order.

12. The method of claim 1, wherein:

the difference between the determined presentations of the two passive orders to the prospective aggressor counterparty includes indicating that one of the two passive orders is not available to be traded by the prospective aggressor counterparty.

13. The method of claim 12, wherein:

the principal'"'"'s passive order is presented as tradeable to the prospective aggressor counterparty, and the broker'"'"'s passive order is presented as non-tradeable to the prospective aggressor counterparty.

14. The method of claim 1, further comprising:

maintaining the identity of the real party in interest associated with a one of the passive orders and the identity of the prospective aggressor counterparty anonymous to each other.

15. The method of claim 14, further comprising:

revealing the identity of the real party in interest associated with a one of the passive orders and the identity of the prospective aggressor counterparty to each other before executing a trade between the one of the passive orders and the aggressive counterparty.

16. The method of claim 1, further comprising:

automatically executing the full value of a one of the passive orders based at least in part on a status as principal or broker of the party that entered the passive order to be automatically executed.

31. The apparatus of claim 14, wherein the programs are further designed to cause the processor to:

reveal the identity of the real party in interest associated with a one of the passive orders and the identity of the prospective aggressor counterparty to each other before executing a trade between the one of the passive orders and the aggressive counterparty.

17. An apparatus comprising:

a processor;

a nonvolatile memory, having stored therein computer data signals representing two passive trading orders for proposed transactions to be mediated with assistance of an electronic trading system, the stored data for the orders indicating that a first of the two passive orders is entered with authority of a principal of the principal'"'"'s real party in interest, and the stored data indicating that a second of the two passive orders is entered with authority of a broker acting on behalf of the broker'"'"'s real party in interest from a broker workstation;

the memory further storing one or more computer programs designed to cause the processor to electronically determine presentation of the first and second passive orders to a prospective aggressor counterparty, a difference between the determined presentation of the two passive orders to the prospective aggressor counterparty to be based at least in part on the stored indication of principal vs. broker authority, and to prevent the prospective aggressor counterparty from acting on at least one of the passive trading orders based at least in part on a determination that the prospective aggressor is acting with the authority of a broker.

18. The apparatus of claim 17, wherein the programs are further designed to:

cause presentation to the prospective aggressor counterparty by means of a display screen.

19. The apparatus of claim 18, wherein the programs are further designed to:

cause display of the first passive order in a different manner from the second passive order, the different presentations reflecting the respective principal and broker authorities of the passive orders'"'"' real parties in interest, wherein the different manner is using different colors, using different fonts, using flashing or hiding an unavailable passive order.

20. The apparatus of claim 17, wherein the programs are further designed to:

prevent the prospective aggressor from acting on the passive trading order by blocking the passive order from the prospective aggressor so that the aggressor'"'"'s trading command does not form part of the trade.

21. The apparatus of claim 20, wherein the programs are further designed to cause the processor to:

automatically execute a part of the value of a one of the passive orders based at least in part on a status as principal or broker of the party that entered the passive order to be automatically executed.

22. The apparatus of claim 17, wherein the programs are further designed to cause the processor to:

automatically execute at least part of the value of a one of the passive orders based at least in part on a status as principal or broker of the prospective aggressor counterparty.

23. The apparatus of claim 17, wherein the programs are further designed to cause the processor to:

prevent the prospective aggressor counterparty from acting on the second passive order based at least in part on the broker authority of the second passive order.

24. The apparatus of claim 17, wherein the programs are further designed to cause the processor to:

set in the memory trading limitations to be applied to trading by a trader designated by the restrictions, the limitations indicating restrictions on tradability of orders by the designated trader, the trading restrictions based at least in part on a principal vs. broker role of the counterparties that entered the respective orders, the settings available to be set including a setting enabling the designated trader to trade orders entered by counterparty principals on a less-restricted basis and enabling trading of orders entered by counterparty brokers on a more-restricted basis; and

impose the trading limitations on the designated trader based at least in part on the stored trading limitation settings.

25. The apparatus of claim 17, wherein:

the difference between the determined presentation includes to present one of the two passive orders to the prospective aggressor counterparty, and to block presentation of the other passive order.

26. The apparatus of claim 17, wherein the programs are further designed to cause the processor to:

determine the difference between the presentation by presenting the principal'"'"'s passive order to the prospective aggressor counterparty, and to block presentation of the broker'"'"'s passive order.

27. The apparatus of claim 17, wherein the programs are further designed to cause the processor to:

determine presentation based at least in part on an comparison of the presented passive order to a warning limit between the prospective aggressor counterparty and the real party in interest associated with the passive order.

28. The apparatus of claim 17, wherein the programs are further designed to cause the processor to:

determine the difference between the presentations of the two passive orders to the prospective aggressor counterparty to indicate that one of the two passive orders is not available to be traded by the prospective aggressor counterparty.

29. The apparatus of claim 28, wherein the programs are further designed to cause the processor to:

present the principal'"'"'s passive order as tradeable to the prospective aggressor counterparty, and the broker'"'"'s passive order is presented as non-tradeable to the prospective aggressor counterparty.

30. The apparatus of claim 17, wherein the programs are further designed to cause the processor to:

maintain the identity of the real party in interest associated with a one of the passive orders and the identity of the prospective aggressor counterparty anonymous to each other.

32. The apparatus of claim 17, wherein the programs are further designed to cause the processor to:

automatically execute the full value of a one of the passive orders based at least in part on a status as principal or broker of the party that entered the passive order to be automatically executed.