Automated futures trading exchange
DCFirst Claim
1. A computerized open outcry exchange system for transacting sales of a particular futures commodity contract in varying volumes or lot sizes by members of a futures trading exchange as principals or agents for others wherein bids to purchase or offers to sell said particular commodity contract are made by said principals or agents through remote terminals, said system comprising:
- a. means for receiving and storing bids and offers from said remote terminals and automatically completing a transaction of matching bids and offers on a first-come, first-served basis thereby establishing a trading system,b. means for storing CFTC requirements and regulations to be observed on said buy and sell transactions thereby establishing a clearing system,c. means coupling said stored CFTC requirements and regulations in said clearing system to said trading system for comparing said transaction with said stored requirements and regulations thereby determining the validity of each transaction,d. means for storing predetermined compliance criteria necessary to detect illegal trade practices or trade patterns which would adversely affect said commodity market thereby establishing a compliance system, ande. mean coupling said stored compliance criteria in said compliance system to said trading system and said clearing system for automatically comparing said transaction determined to be valid to said predetermined compliance criteria thereby enabling detection of illegal trade practices and trade patterns which would adversely affect said commodity market.
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Abstract
A computerized open outcry exchange system for transacting sales of a particular futures commodity contract by members of a futures trading exchange wherein bids to purchase or offers to sell the particular commodity contract are made by the members through remote terminals and the exchange computer automatically matches offers and bids to complete the transaction.
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Citations
42 Claims
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1. A computerized open outcry exchange system for transacting sales of a particular futures commodity contract in varying volumes or lot sizes by members of a futures trading exchange as principals or agents for others wherein bids to purchase or offers to sell said particular commodity contract are made by said principals or agents through remote terminals, said system comprising:
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a. means for receiving and storing bids and offers from said remote terminals and automatically completing a transaction of matching bids and offers on a first-come, first-served basis thereby establishing a trading system, b. means for storing CFTC requirements and regulations to be observed on said buy and sell transactions thereby establishing a clearing system, c. means coupling said stored CFTC requirements and regulations in said clearing system to said trading system for comparing said transaction with said stored requirements and regulations thereby determining the validity of each transaction, d. means for storing predetermined compliance criteria necessary to detect illegal trade practices or trade patterns which would adversely affect said commodity market thereby establishing a compliance system, and e. mean coupling said stored compliance criteria in said compliance system to said trading system and said clearing system for automatically comparing said transaction determined to be valid to said predetermined compliance criteria thereby enabling detection of illegal trade practices and trade patterns which would adversely affect said commodity market. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13)
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14. An automated system for transacting a sale of a particular futures commodity contract in predetermined volumes or lot sizes by members of the trading system as principals or agents for others wherein bids to purchase or offers to sell are made by said principals or agents for said particular commodity contract, said system comprising:
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a. remote terminals for initiating and transmitting transaction data including buyer'"'"'s bids and seller'"'"'s offers, b. a central processor for receiving said buyer'"'"'s bids and seller'"'"'s offers thereby forming a trading system, c. means in said central processor for completing a transaction by comparing received bids with received offers to find a matching bid and offer, d. means coupled to said trading system and said remote terminals for storing predetermined trading constraints and approving only those bids and offers coming within said constraints thereby forming a clearing system, e. means coupled to said trading system and said clearing system for storing predetermined criteria representing fraudulent trading practices and comparing said transaction data with said predetermined criteria thereby establishing a compliance system for enabling detection of said fraudulent trading practices, and f. means in said central processor for notifying the remote terminals of a completed transaction when a matched bid and offer are found. - View Dependent Claims (15, 16, 17, 18, 19, 20, 21, 22)
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23. A method of transacting a sale of a particular futures commodity in varying volumes or lot sizes by members of a futures trading exchange as principals or agents for others wherein bids to purchase or offers to sell are made by said principals or agents for said particular commodity, said method comprising the steps of:
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a. receiving in a central processor buyer bids and seller offers on a particular commodity from remote terminals, b. storing in said central processor said bids and offers in the form of time, price and lot size of each of said received bids and offers, c. comparing said received bids and offers and matching equal bids and offers on a first cone, first served basis according to the time of receiving said bids and offers thereby storing a trading system, d. storing buy and sell constraints on each member of said exchange thereby forming a clearing system, e. coupling said clearing system to said trading system for approving execution of a transaction only when said transaction falls within said predetermined buy and sell constraints, f. executing the buy and sell transaction for a particular commodity for which said offer and bid have been matched and approved by said clearing system, g. storing predetermined compliance criteria necessary to detect illegal trade practices thereby forming a compliance system, h. coupling said compliance system to said trading system and said clearing system for detecting any illegal trade practices as indicated by said stored predetermined criteria, and i. confirming the execution of an approved transaction immediately to both buyer and seller at the remote terminals whose bid and offer are matched. - View Dependent Claims (24, 25, 26, 27, 28, 29, 30, 31, 32, 33)
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34. A method of storing an automated futures trading system for transacting a sale of a particular commodity in predetermined volumes or lot sizes by members of the trading system as principals or agents for others wherein bids to purchase or offers to sell said particular commodity are made by said principals or agents, said method comprising the steps of:
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a. initiating and transmitting buyer'"'"'s bids and seller'"'"'s offers from remotely terminals, b. determining whether said buyer'"'"'s bids and seller'"'"'s offers are valid, c. comparing received valid bids with received valid offers to find a matching bid and offer on a first-come, first-served basis, d. reviewing said valid bids and offers to detect illegal trading practices, and e. notifying the remote terminals of a completed transaction when a matched bid and offer are found. - View Dependent Claims (35, 36, 37, 38, 39, 40, 41, 42)
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Specification