Electronic trading system featuring arbitrage and third-party credit opportunities

• US 6,519,574 B1
• Filed: 12/12/1995
• Issued: 02/11/2003
• Est. Priority Date: 12/12/1995
• Status: Expired due to Term

• Current Assignee: Thomson Reuters Global Resources Unlimited Company (The Woodbridge Co. Ltd.)
• Original Assignee: Reuters Limited (The Woodbridge Co. Ltd.)
• Inventors: Silverman, David L., Wilton, Rosalyn S.
• Primary Examiner(s): Poinvil, Frantzy
• Application Number:
  US08/571,106
• Time in Patent Office: 2,618 Days
• Field of Search: 705/35, 705/37, 705/38, 705/39, 707/10, 707/100-104
• US Class Current: 705/35
• CPC Class Codes: G06Q 30/00 Commerce
• CPC Class Codes: G06Q 30/08 Auctions
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

An electronic trading system includes a plurality of trader terminals for receiving credit parameter data, arbitrage parameter data, and trading data from a trading entity and displaying trade information to the trading entity. The trading data includes bid and/or offer information input by the trading entity. The system further includes a computer connected to the plurality of trader terminals via a communications network which receives and stores the credit parameter data and the trading data from the plurality of trader terminals. The system also includes a detector circuit or program for automatically detecting an available arbitrage opportunity including a plurality of trades based on the credit parameter data, the arbitrage parameter data, and the trading data; and a circuit or program for automatically executing the available arbitrage opportunity by executing all of the plurality of trades. A similar electronic trading system includes an automatic name switch feature wherein the plurality of trader terminals receive name switch parameter data, credit parameter data, and trading data from the trading entity. A circuit or program automatically detects and executes available name switch transactions based on the credit parameter data, the name switch parameter data, and the trading data.

Claims

1. An electronic trading system comprising:

a plurality of trader terminals for receiving credit parameter data, arbitrage parameter data, and trading data from a trading entity and displaying trade information to the trading entity, said trading data including bid and/or offer information input by the trading entity;

a computer connected to said plurality of trader terminals via a communications network, said computer receiving and storing said credit parameter data and said trading data from said plurality of trader terminals;

detecting means for automatically detecting an available arbitrage transaction in accordance with said arbitrage parameter data, said available arbitrage transaction including a plurality of trades based on said credit parameter data, said arbitrage parameter data, and said trading data;

executing means for automatically executing said available arbitrage transaction by excuting all of said plurality of trades,

wherein said executing means includes locking means by which all trades necessary to complete a detected arbitrage opportunity are locked prior to execution of any of said all trades to ensure that said all trades remain available during the execution of said detected arbitrage transaction, wherein said executing means will not perform any trades of said detected arbitrage transaction unless said all trades are locked.

2. An electronic trading system according to claim 1, further comprising notification means by which the trading entity is notified that an arbitrage transaction has been performed and the results of said performed arbitrage transaction.

3. An electronic trading system according to claim 1, further comprising alert means for alerting the trading entity of a detected arbitrage opportunity detected by said detecting means and providing the trading entity with the option to pursue or not pursue said detected arbitrage opportunity.

4. An electronic trading system according to claim 1, wherein said credit parameter data includes a credit limit for each potential trading counterparty.

5. An electronic trading system according to claim 1, wherein said arbitrage parameter data includes a minimum spread parameter and/or a minimum size parameter and/or a maximum size parameter.

6. An electronic trading system according to claim 1, wherein said arbitrage parameter data includes a minimum spread parameter, an average spread parameter, a minimum size parameter, and a maximum size parameter.

7. An electronic trading system according to claim 1, wherein said available arbitrage transaction is one in which a first trading entity enables a trade requested by a second trading entity and a third trading entity, said first trading entity having sufficient credit with said second and third trading entities to complete said trade, said second and third trading entities being unable to trade directly with one another.

8. An electronic wading system, comprising:

a plurality of trader terminals for receiving credit parameter data, name switch parameter data, and trading data from a trading entity and displaying trade information to the trading entity, said trading data including bid and/or offer information input by the trading entity;

a computer connected to said plurality of trader terminals via a communications network, said computer receiving and storing said credit parameter data, said name switch parameter data, and said trading data from said plurality of trader terminals;

detecting means for automatically detecting an available name switch transaction based on said credit parameter data, said name switch parameter data, and said trading data;

executing means for locking said trading data and for automatically executing said available name switch transaction.

9. An electronic trading system according to claim 8, further comprising notification means by which the trading entity is notified that a name switch transaction has been performed and the results of said performed name switch transaction.

10. An electronic trading system according to claim 8, wherein said credit parameter data includes a credit limit for each potential trading counterparty.

11. An electronic trading system according to claim 8, wherein said name switch parameter data includes a minimum spread parameter and/or a minimum size parameter and/or a maximum size parameter.

12. An electronic trading system according to claim 8, wherein said name switch parameter data includes a minimum spread parameter, an average spread parameter, a minimum size parameter, and a maximum size parameter.

13. An electronic trading system according to claim 8, wherein said available name switch transaction is one in which a first trading entity enables a trade requested by a second trading entity and a third trading entity by allowing said second trading entity to trade with said third trading entity using said first trading entity'"'"'s credit line, said first trading entity having sufficient credit with said second and third trading entities to complete said trade, said second and third trading entities being unable to trade directly with one another.

14. An electronic trading system comprising:

a plurality of trader terminals for receiving credit parameter data, arbitrage parameter data, and trading data from a trading entity and displaying trade information to the trading entity, said trading data including bid and/or offer information input by the trading entity;

a computer connected to said plurality of trader terminals via a communications network, said computer receiving and storing said credit parameter data and said trading data from said plurality of trader terminals;

a detector for automatically detecting an available arbitrage transaction in accordance with said arbitrage parameter data, said available arbitrage transaction including a plurality of trades based on said credit parameter data, said arbitrage parameter data, and said trading data;

an executing circuit for automatically executing said available arbitrage transaction by executing all of said plurality of trades,

wherein said executing circuit includes locking circuit by which all trades necessary to complete a detected arbitrage opportunity are locked prior to execution of any of said all trades to insure that said all trades remain available during the execution of said detected arbitrage opportunity, wherein said executing circuit will not perform any trades of said detected arbitrage opportunity unless said all trades are locked.

15. An electronic trading system according to claim 14, further comprising a notification circuit by which the trading entity is notified that an arbitrage transaction has been performed and the results of said performed arbitrage transaction.

16. An electronic trading system according to claim 14, further comprising an alert circuit for alerting the trading entity of a detected arbitrage opportunity detected by said detector and providing the trading entity with the option to pursue or not pursue said detected arbitrage opportunity.

17. An electronic trading system according to claim 14, wherein said credit parameter data includes a credit limit for each potential trading counterparty.

18. An electronic trading system according to claim 14, wherein said arbitrage parameter data includes a minimum spread parameter and/or a minimum size parameter and/or a maximum size parameter.

19. An electronic trading system according to claim 14, wherein said arbitrage parameter data includes a minimum spread parameter, an average spread parameter, a minimum size parameter, and a maximum size parameter.

20. An electronic trading system according to claim 14, wherein said available arbitrage transaction is one in which a first trading entity enables a trade requested by a second trading entity and a third trading entity, said first trading entity having sufficient credit with said second and third trading entities to complete said trade, said second and third trading entities being unable to trade directly with one another.

21. An electronic trading system, comprising:

a plurality of trader terminals for receiving credit parameter data, name switch parameter data, and trading data from a trading entity and displaying trade information to the trading entity, said trading data including bid and/or offer information input by the trading entity;

a computer connected to said plurality of trader terminals via a communications network, said computer receiving and storing said credit parameter data, said name switch parameter data, and said trading data from said plurality of trader terminals;

a detector for automatically detecting an available name switch transaction based on said credit parameter data, said name switch parameter data, and said trading data; and

an executing circuit that locks said trading data and automatically executes said available name switch transaction.

22. An electronic trading system according to claim 21, further comprising a notification circuit by which the trading entity is notified that a name switch transaction has been performed and the results of said performed name switch transaction.

23. An electronic trading system according to claim 21, wherein said credit parameter data includes a credit limit for each potential trading counterparty.

24. An electronic trading system according to claim 21, wherein said name switch parameter data includes a minimum spread parameter and/or a minimum size parameter and/or a maximum size parameter.

25. An electronic trading system according to claim 21, wherein said available name switch transaction is one in which a first trading entity enables a trade requested by a second trading entity and a third trading entity by allowing said second trading entity to trade with said third trading entity using said first trading entity'"'"'s credit line, said first trading entity having sufficient credit with said second and third trading entities to complete said trade, said second and third trading entities being unable to trade directly with one another.

26. In an electronic trade system having a plurality of trader terminals connected over a network, said trader terminal comprising:

an input receiving arbitrage parameter data from a trader;

a display displaying trade data to said trader, said trade data including bid and/or offer information input at a first remote location connected to said network;

a detector for detecting an arbitrage transaction opportunity including at least two trades in accordance with said arbitrage parameter data from said user; and

an executor for executing said arbitrage transaction opportunity by executing all of said trades.

27. A method for arbitrating a plurality of trades over a network comprising the steps of:

receiving arbitrage parameter data;

displaying trade data, said trade data including bid and/or offer information input at a first remote location connected to said network;

detecting an arbitrage transaction opportunity including at least two trades in accordance with said arbitrage parameter data;

executing said arbitrage transaction opportunity by executing all of said trades.

28. The method according to claim 27, further comprising the steps of:

notifying a trading entity that said arbitrage transaction has been executed; and

notifying the trading entity of the results of said executed arbitrage transaction.

29. The method according to claim 27, further comprising the steps of:

alerting a trading entity of a detected arbitrage opportunity; and

providing the trading entity with the option to pursue or not pursue said detected arbitrage opportunity.

30. The method according to claim 27, wherein, prior to said executing said, said method includes the step of:

locking all trades necessary to execute the detected arbitrage opportunity prior to ensure that said all trades remain available during the execution of said detected arbitrage transaction,

wherein said executing step is not performed on any trades of said detected arbitrage transaction unless said locking step is executed.

31. The method according to claim 27, wherein said credit parameter data includes a credit limit for potential trading counterparties.

32. The method according to claim 27, wherein said arbitrage parameter data includes a minimum spread parameter and/or a minimum size parameter and/or a maximum size parameter.

33. The method according to claim 27, wherein said arbitrage parameter data includes a minimum spread parameter, an average spread parameter, a minimum size parameter, and a maximum size parameter.

34. The method according to claim 27, wherein the detected arbitrage transaction opportunity is one in which a first trading entity enables a trade requested by a second trading entity and a third trading entity, said first trading entity having sufficient credit with said second and third trading entities to complete said trade, said second and third trading entities being unable to trade directly with one another.

35. In an electronic trading system having a plurality of trader terminals connected over a network, said trader terminal comprising:

an input receiving arbitrage parameter data from a trader;

a display displaying trade data to said trader, said trade data including bid and/or offer information input at a first remote location connected to said network;

a detector for detecting an arbitrage transaction opportunity including at least two trades in accordance with said arbitrage parameter data from said user;

an arbitrage availability lock for locking in the availability of said at least two trades, thereby ensuring that said at least two trades remain available during execution of said at least two trades; and

an executor for executing said arbitrage transaction opportunity by executing said at least two trades.

36. In an electronic trading system having a plurality of trader terminals connected over a network, said trader terminal comprising:

an input receiving arbitrage parameter data from a trader, said arbitrage parameter data including one or more of a minimum spread parameter, a minimum size parameter and a maximum size parameter;

a display displaying trade data to said trader, said trade data including bid and/or offer information input at a first remote location connected to said network;

a detector for detecting an arbitrage transaction opportunity including at least two trades in accordance with said arbitrage parameter data from said user;

an executor for executing said opportunity by executing said at least two trades; and

a notifier for notifying that said arbitrage transaction opportunity has been executed and the results of said executed opportunity.

37. A computer-readable medium having computer-executable instructions for performing steps for arbitrating a plurality of trades over a network, said computer-executable instructions comprising the steps of:

receiving credit parameter data, arbitrage parameter data and trading data;

displaying trade data, said trade data including bid and/or offer information input at a first remote location connected to said network;

detecting an arbitrage transaction opportunity including at least two trades in accordance with said arbitrage parameter data;

executing said arbitrage action opportunity by executed all of said trades.

38. The computer-readable medium according to claim 37, said computer-executable instructions further comprising the steps of:

notifying a trading entity that said arbitrage transaction has been executed; and

notifying the trading entity of the results of said executed arbitrage transaction.

39. The computer-readable medium according to claim 37, said computer-executable instructions further comprising the steps of:

alerting a trading entity of a detected arbitrage opportunity; and

providing the trading entity with the option to pursue or not pursue said detected arbitrage opportunity.

40. The computer-readable medium according to claim 37, wherein, prior to said executing said, said computer-executable instructions includes the step of:

locking all trades necessary to execute the detected arbitrage opportunity prior to ensure that said all trades remain available during the execution of said detected arbitrage transaction,

wherein said executing step is not performed on any trades of said detected arbitrage transaction unless said locking step is executed.

41. The computer-readable medium according to claim 37, wherein said credit parameter data includes a credit limit for potential trading counterparties.

42. The computer-readable medium according to claim 37, wherein said arbitrage parameter data includes a minimum spread parameter and/or a minimum size parameter and/or a maximum size parameter.

43. The computer-readable medium according to claim 37, wherein said arbitrage parameter data includes a minimum spread parameter, an average read parameter, a minimum size parameter, and a maximum size parameter.

44. The computer-readable medium according to claim 37, wherein the detected arbitrage transaction opportunity is one in which a first trading entity enables a trade requested by a second trading entity and a third trading entity, said first trading entity having sufficient credit with said second and third trading entities to complete said trade, said second and third trading entities being unable to trade directly with one another.