System for conducting and processing spot commodity transactions

• US 5,168,446 A
• Filed: 05/23/1989
• Issued: 12/01/1992
• Est. Priority Date: 05/23/1989
• Status: Expired due to Fees

• Current Assignee: Moneyline Telerate
• Original Assignee: Telerate Systems Incorporated
• Inventors: Wiseman, James W.
• Primary Examiner(s): Weinhardt, Robert
• Assistant Examiner(s): Brutman, Laura
• Application Number:
  US07/356,449
• Time in Patent Office: 1,288 Days
• Field of Search: 364/408, 364/401, 340/825.26, 340/825.27
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: H04L 12/1804 for stock exchange and similar applications
• CPC Class Codes: H04L 9/40 Network security protocols

Abstract

A system is provided for processing spot trades in selected commodities among a group of trading stations in a communication network through a series of structured stages. Each trading station is capable of initiating a transaction with any other trading station in the network by transmitting a request for a quotation on a selected commodity. The receiving, or counterparty, trading station responds by transmitting a quotation back to the initiating trader, and the trader transmits a proposal based on this quotation. The counterparty then transmits an acceptance of the proposal and upon receipt of this acceptance by the initiating trader, a confirmation signal is automatically transmitted back to the counterparty and the deal is automatically logged at both sites. Alterations of transmitted quotations and proposals and extensive negotiation are also possible. At each stage of a transaction, the responses available to the initiating trader or counterparty are limited or structured such that only certain responses are transmitted so that trades progress within the structure of the invention. The structure of the invention greatly improves operator ability to transact numerous trades accurately and quickly in a format that is readily processed by digital computers.

Claims

1. A data processing system for executing and characterizing trades among subscribers of specific ones of a selected group of commodities, said system comprising a group of trading stations including at least one trading station for each subscriber, each trading station being electronically coupled to said system to form a network, each of said trading stations comprising:

a. visual display means and input means for selection of certain fields from among an array of displayed fields including numerical data fields, to permit a trader to operate said system;

b. communication initiation means initiate a communication link with a counterparty trading station of a selected subscriber in said network;

c. first transmission means for transmitting from the initiating trading station a trading quotation request signal to said counterparty trading station, said quotation request signal comprising a commodity identification selected by the initiating trader, and an optional transactional volume amount which the initiating trader may select or elect not to transmit;

d. acceptance means permitting a counterparty to accept from an initiating trading station over said link said quotation request signal;

e. second transmission means for transmitting from said counterparty trading station to the initiating trading station selectively either a signal declining to quote or a quotation signal setting forth a bid price and an offer price for the identified commodity, and optionally a volume amount, said prices and volume amount being selected by the counterparty prior to transmission of said quotation signal;

f. first reception means for receiving from the counterparty trading station either said signal declining to quote, which reception automatically terminates the transaction, or a quotation signal from the counterparty trading station over said link;

g. third transmission means permitting only an initiating trading station that has received a quotation signal to transmit to the counterparty trading station over said link selectively, either a specific predetermined signal declining to make a proposal or a proposal signal proposing a trade in accordance with either the bid or offer term of said quotation signal for a volume amount selected by the initiating trading station prior to transmission of said proposal signal;

h. second reception means permitting said counterparty trading station to receive from the initiating trading station either said signal declining to propose or a proposal signal from the counterparty trading station over said link;

i. fourth transmission means permitting only a counterparty trading station that has received a proposal signal to transmit over said link a specific predetermined acceptance signal indicating acceptance of the proposal, said acceptance signal setting forth a volume amount for the transaction; and

j. acknowledgement means for automatically sending an acknowledgement signal to the counterparty trading station upon receipt of said acceptance at the initiating trading station, receipt of said acknowledgement signal by the counterparty trading station indicating that the initiating trading station has received said acceptance.

2. A data processing system in accordance with claim 1, wherein each of said trading stations also includes means permitting a counterparty trading station, at any time after transmitting a quotation signal and before receiving a proposal signal in accordance with said transmitted quotation signal, to transmit a change quotation signal, said change quotation signal indicating a desire to change the terms of the previously transmitted quotation signal, and where each of said trading stations also includes third reception means for receiving said change quotation signal from a counterparty trading station, and upon receiving a change quotation signal, said initiating trading station third transmission means automatically being rendered unable to transmit a proposal signal to the counterparty trading station until said initiating trading station receives a new quotation signal from said counterparty after receiving said change quotation signal from said counterparty trading station, said proposal signal proposing a trade in accordance with either the bid or offer term of the new quotation signal received by the initiating trading station.

3. A data processing system in accordance with claim 1, wherein each of said trading stations also includes means permitting an initiating trading station, at any time after transmitting a proposal signal and before receiving an acceptance signal in accordance with said transmitted proposal signal, to transmit a change proposal signal, said change proposal signal indicating a desire to change the terms of the previously transmitted proposal signal, and where each of said trading stations also includes fourth reception means for receiving said change proposal signal from an initiating trading station, and upon receiving a change proposal signal, said counterparty trading station fourth transmission means automatically being rendered unable to transmit an acceptance signal to the initiating trading station until said counterparty trading station receives a proposal signal from said initiating trading station after receiving said change proposal signal from said initiating trading station, said transmitted acceptance signal indicating acceptance of the most recently received proposal.

4. A data processing system in accordance with claim 1, wherein each of said trading stations includes transmission means permitting an initiating trading station, upon receiving a quotation signal from a counterparty trading station, to transmit one of a limited number of fixed negotiation signals with or without a volume amount, each constituting a request to negotiate the terms transmitted in the quotation signal, and each of said trading stations further including fifth reception means for receiving from an initiating trading station said negotiation request signals.

5. A data processing system in accordance with claim 1, wherein each of said trading stations also includes termination means permitting either the initiating trading station or the counterparty trading station to terminate the communication link between the two trading stations until a proposal signal is received by or sent from said trading station.

6. A data processing system in accordance with claim 1, wherein said system includes at least one trading station capable of simultaneously carrying on up to four trades with any combination of up to four other trading stations on the network of trading stations.

7. A data processing system in accordance with claim 1, wherein, after a communication link has already been established between two trading stations and after a transaction has been completed or discontinued, a counterparty trading station may function as an initiating trading station by transmitting a quotation request signal to the original initiating trading station, and the original initiating trading station may function as a counterparty trading station.

8. A data processing system in accordance with claim 1, wherein at least one of said trading stations includes a graphics slate input device, said graphics slate comprising a screen display with a touch sensitive overlay, said slate allowing a trader to input data and commands by touching said touch sensitive overlay at a location immediately above the desired field displayed on said slate screen, said slate screen displaying various forms at different stages of a transaction, each form comprising a fixed array of data input and command fields.

9. A data processing system for executing and characterizing trades among subscribers of specific ones of a selected group of commodities, said system comprising a group of trading stations including at least one trading station for each subscriber, each trading station being electronically coupled to said system to form a network, said network transmitting data messages from a transmitting trading station to a receiving trading station to enable any two trading stations in said network to carry out a transaction in a series of transactional stages, said data messages containing one of a limited number of data message type identifiers, where at each particular stage of the transaction, a trading station is capable of selectively transmitting a data message containing one of only a subset of data message type identifiers, said subset not including every data message type identifier that the trading station is capable of transmitting in the course of an entire transaction, each stage of the transaction consequently having a corresponding subset of data message type identifiers which a trading station presently in that stage may transmit, where the transmission of a data message containing a data message type identifier causes the transmitting trading station to enter into another transactional stage, and the reception of the message containing said data message type identifier causes the receiving trading station to enter into another transactional stage.

10. A data processing system in accordance with claim 9, wherein data messages transmitted by said system comprise various fields, each message containing a data message type field in a predetermined location in said message, said data message type identifier located in said data message type field.

11. A data processing system in accordance with claim 10, wherein each data message type identifier further corresponds to a predetermined message format, said predetermined message format comprising a predetermined arrangement of fields, each field of a predetermined length and each field corresponding to a predetermined information category, each trading station including determination means permitting a receiving trading station to determine the data message type identifier of the incoming message, each trading station further including determination means to determine, based on the data message type identifier, the corresponding information category for each field in the received message.

12. A data processing system in accordance with claim 11, wherein each trading station includes storage means for storing, for a given transaction, data indicating at least the identity of the commodity sold in the transaction, the agreed volume of the transaction, the agreed price of the commodity, the identity of the other party to the transaction, and whether the operator of the trading station agreed to buy or sell the commodity in the transaction.

13. A data processing system in accordance with claim 9, wherein at least one of said trading stations includes a graphics slate input device, said graphics slate comprising a screen display with a touch sensitive overlay, said slate allowing a trader to input data and commands by touching said touch sensitive overlay at a location immediately above the desired field displayed on said slate screen, said slate screen displaying various forms at different stages of a transaction, each form comprising a fixed array of data input and command fields.

14. A data processing system for executing and characterizing trades among subscribers of specific ones of a selected group of commodities, said system comprising a group of trading stations including at least one trading station for each subscriber, each trading station being electronically coupled to said system to form a network, said network transmitting data messages including at least one data field, from a transmitting trading station to a receiving trading station to enable any two trading stations in said network to carry out a transaction in a series of transactional stages, said system including a change alert subsystem, said change alert subsystem comprising:

signal processing means for scanning messages received at a trading station to determine if the message contains a specified data field;

means for retrieving the contents of the specified data field if the message contains the specified data field;

means for logically comparing the contents of the specified data field with the contents, if any, of a specified memory location in which the contents of a corresponding data field from a message that was previously sent from or received at said trading station during the transaction has been stored; and

means for sounding an audible alarm if the contents of the specified data field differs from the contents, if any, of the specified memory location.

15. A data processing system for executing and characterizing trades among subscribers of specific ones of a selected group of commodities, said system comprising a group of trading stations including at least one trading station for each subscriber, each trading station being electronically coupled to said system to form a network, said network transmitting data messages including at least one data field, from a transmitting trading station to a receiving trading station to enable any two trading stations in said network to carry out a transaction in a series of transactional stages, said system including a change alert subsystem, said change alert subsystem comprising:

signal processing means for scanning messages received at a trading station to determine if the message contains a specified data field;

means for retrieving the contents of the specified data field if the message contains the specified data field;

means for logically comparing the contents of the specified data field with the contents, if any, of a specified memory location in which the contents of a corresponding data field from a message that was previously sent from or received at said trading station during the transaction has been stored; and

means for displaying a visual change indication if the contents of the specified data field differs from the contents, if any, of the specified memory location.