System and method for trading having a principal market maker

• US 5,963,923 A
• Filed: 06/03/1997
• Issued: 10/05/1999
• Est. Priority Date: 11/12/1996
• Status: Expired due to Term

• Current Assignee: Technology Research Group LLC (Southwire Company)
• Original Assignee: Howard B Garber
• Inventors: Garber, Howard B.
• Primary Examiner(s): MacDonald, Allen R.
• Assistant Examiner(s): Patel, Jagdish
• Application Number:
  US08/868,200
• Time in Patent Office: 854 Days
• Field of Search: 705/37, 705/35, 235/379, 235/380
• 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

A system and method is provided for linking a Rolling Spot Currency contract with a Principle Market Maker program. In one aspect of the invention, the system includes an electronic brokerage and trading network having at least one computer coupled to receive and transmit bids and offers for international currency trading; a display terminal and input; and a principal market maker computer coupled to the electronic brokerage and trading network wherein the principal market maker computer is operative to receive and transmit the bids and offers and execute international currency trades by maintaining a market for such currencies. In another aspect of the invention, the method includes the steps of receiving and transmitting bids and offers for publicly traded currencies; storing the received bids and offers in a memory; identifying and executing the matching bids and offers; and identifying unmatched bids and offers and providing a complementary trade to maintain a market for such currencies.

Claims

1. A principal market maker/rolling spot system for trading currency futures, comprising:

a principal market maker futures computer operative to receive and automatically execute primary currency futures purchase and sale trades and orders and maintain a currency futures bid and offer market;

a principal market maker options computer operative to receive and automatically execute secondary currency futures purchase and sale trade and orders and maintain a currency options bid and offer market; and

a bi-directional communications link coupled between the futures and options computers, the bi-directional communications link to facilitate intermarket trading to manage risk taken in a position resulting from a trade in either market.

2. The link defined in claim 1, further comprising a second communications link to rolling spot future trade systems.

3. The link defined in claim 1, further comprising a second communications link to currency futures trade systems.

4. The link defined in claim 1, further comprising a second communications link to allow vertical, horizontal and combination spread options trading.

5. The link defined in claim 1, wherein the bi-directional communications link comprises a wireless communication system.

6. The link defined in claim 1, wherein the bi-directional communications link comprises a telephone.

7. The link defined in claim 1, wherein the bi-directional communications link comprises a touch activation computer.

8. The link defined in claim 1, wherein the bi-directional communications link comprises a voice activation computer.

9. A principal market maker system for trading commodities, comprising:

a principal market maker futures computer operative to receive and automatically execute primary commodity purchase and sale trades and orders and maintain a commodity futures bid and offer market;

a principal market maker options computer operative to receive and automatically execute secondary commodity purchase and sale trades and orders and maintain a commodity options bid and offer market; and

a bi-directional communications link coupled between the futures and options computers, the bi-directional communications link to facilitate intermarket trading to manage risk taken in a position resulting from a trade in either market.

10. An electronic market for trading commodities, comprising:

a communications interface operative to transmit commodity bids and offers from at least one financial institution;

a principal market maker computer coupled to the communications interface, the principal market maker computer operative to receive the commodity bids and offers and execute trades to maintain a market for commodity trades; and

a principal market maker options computer.

11. The electronic market defined in claim 10, further comprising a bi-directional communications link coupled between the options computer and principal market maker computer.

12. The electronic market defined in claim 10, wherein the link comprises a modem.

13. The electronic market defined in claim 10, wherein the link comprises a telephone.

14. The electronic market defined in claim 10, wherein the link comprises a voice activation computer.

15. The electronic market defined in claim 10, wherein the link comprises a touch screen display.

16. The electronic market defined in claim 10, wherein the link comprises a keyboard.

17. A computerized method having a principal market maker computer for maintaining a market for publicly traded currency futures, comprising the steps of:

receiving primary currency futures purchase and sale trades and orders, the primary currency futures purchase and sale trade and order indicative of whether a currency future is to be bought or sold;

receiving secondary currency futures purchase and sale trades and orders, the secondary currency futures purchase and sale trades and orders, indicative of a currency futures options hedge;

automatically matching and executing primary currency futures purchase and sale trades and orders to maintain a currency futures market;

automatically matching and executing secondary currency futures purchase and sale trades and orders to maintain a currency futures options market; and

providing a communications link to allow intermarket futures and options trading to manage risk taken in a position resulting from a trade in either market.

18. The method of claim 17 wherein the communications link is coupled to a rolling spot future trade system.

19. The method of claim 17 wherein the communications link is coupled to a currency futures trade system.

20. The method of claim 17 wherein the communications link allows vertical, horizontal and combination spread options trading.

21. A computerized method having a principal market maker computer for maintaining a market for publicly traded currency futures, comprising the steps of:

receiving primary currency futures purchase and sale trades and orders, the primary currency futures purchase and sale trade and order indicative of whether a currency future is to be bought and sold;

receiving secondary currency futures purchase and sale trades and orders, the secondary currency futures purchase and sale and order indicative of an outright option purchase and sale;

automatically matching and executing the primary currency futures purchase and sale trade and order to maintain a currency futures market;

automatically matching and executing the secondary currency futures purchase and sale trade and order to maintain a currency futures options market; and

providing intermarket futures and options trading to manage risk taken in a position resulting from a trade in either market.

22. The method of claim 21 further comprising the step of providing a communications link to rolling spot future trade systems.

23. The method of claim 21 further comprising the step of providing a communications link to currency futures trade systems.

24. The method of claim 21 further comprising the step of providing a communications link to allow vertical, horizontal and combination spread options trading.

25. A computerized method having a principal market maker computer for maintaining a market for publicly trade currency futures, comprising the steps of;

receiving primary currency futures purchase and sale trades and orders, the primary currency futures purchase and sale trade and order indicative of whether a currency future is to be bought or sold;

receiving secondary currency futures purchase and sale trade and orders, the secondary currency futures purchase and sale trade and order indicative of an outright option purchase and sale;

automatically matching and executing primary currency futures purchase and sale trades and orders to maintain a currency futures market;

automatically matching and executing secondary currency futures purchase and sale trades and orders to maintain a currency futures market; and

providing intermarket futures and options trading to manage risk taken in a position resulting from a trade in either market.

26. The method of claim 25 further comprising the step of providing a communications link to rolling spot future trade systems.

27. The method of claim 25 further comprising the step of providing a communications link to currency futures trade systems.

28. The method of claim 25 further comprising the step of providing a communications link to allow vertical, horizontal and combination spread options trading.