Currency trading system, methods, and software

• US 7,146,336 B2
• Filed: 05/16/2001
• Issued: 12/05/2006
• Est. Priority Date: 03/08/2001
• Status: Expired due to Term

• Current Assignee: OANDA Corp.
• Original Assignee: OANDA Corp.
• Inventors: Stumm, Michael, Olsen, Richard B.
• Primary Examiner(s): Bashore, Alain L.
• Application Number:
  US09/858,610
• Publication Number:
  US 20020156718A1
• Time in Patent Office: 2,029 Days
• Field of Search: 705/35, 705/37, 705/1
• 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

In one aspect, the present invention comprises a system for trading currencies over a computer network. A preferred embodiment comprises: (a) a server front-end; (b) at least one database; (c) a transaction server; (d) a rate server; (e) a pricing engine; (f) an interest rate manager; (g) a trade manager; (h) a value at risk server; (i) a margin control manager; (j) a trading system monitor; and (k) a hedging engine. In another aspect, the present invention comprises methods for trading currency over a computer network. In another aspect, the present invention comprises software for currency trading over a computer network.

Claims

1. A system for trading currencies over a computer network, comprising:

(a) a server front-end in communication with said computer network;

(b) a database;

(c) a transaction server in communication with said server front-end and with said database;

(d) a rate server in communication with said server front-end; and

(e) a pricing engine in communication with said rate server; and

further comprising an interest rate manager in communication with said transaction server and said database, wherein said interest rate manager is operative to calculate, pay out, and collect interest on a tick-by-tick basis.

2. A system for trading currencies over a computer network, comprising:

(a) a server front-end in communication with said computer network;

(b) a database;

(c) a transaction server in communication with said server front-end and with said database;

(d) a rate server in communication with said server front-end; and

(e) a pricing engine in communication with said rate server; and

further comprising a trade manager in communication with said transaction server and said database, wherein said trade manager comprises a stop-loss daemon that (a) continuously checks whether stop-loss orders should be executed, and (b) if a stop-loss order should be executed, executes it through said transaction server.

3. A system for trading currencies over a computer network, comprising:

(a) a server front-end in communication with said computer network;

(b) a database;

(c) a transaction server in communication with said server front-end and with said database;

(d) a rate server in communication with said server front-end; and

(e) a pricing engine in communication with said rate server; and

further comprising a trade manager in communication with said transaction server and said database, wherein said trade manager comprises a take-profit daemon that (a) continuously checks whether take-profit orders should be executed, and (b) if a take-profit order should be executed, executes it through said transaction server.

4. A system for trading currencies over a computer network, comprising:

(a) a server front-end in communication with said computer network;

(b) a database;

(c) a transaction server in communication with said server front-end and with said database;

(d) a rate server in communication with said server front-end; and

(e) a pricing engine in communication with said rate server; and

further comprising a trade manager in communication with said transaction server and said database, wherein said trade manager comprises a limit-order daemon that (a) continuously checks whether limit orders should be executed, and (b) if a limit order should be executed, executes it through said transaction server.

5. A system for trading currencies over a computer network, comprising:

(a) a server front-end in communication with said computer network;

(b) a database;

(c) a transaction server in communication with said server front-end and with said database;

(d) a rate server in communication with said server front-end; and

(e) a pricing engine in communication with said rate server, wherein said pricing engine is operable to compute currency exchange rates based on;

(a) data obtained from external rate sources; and

(b) market directional movement and volatility.

6. A system as in claim 5, wherein said pricing engine is further operable to compute currency exchange rates based on positions held by said system.

8. A system as in claim 6, wherein said positions are managed based on one or more trading models.

9. A system as in claim 8, wherein at least one of said one or more trading models comprises:

(a) a price collector component;

(b) a price filter component;

(c) a price database component;

(d) a gearing calculator component;

(e) a deal acceptor component; and

(f) a book-keeper component.

10. A system as in claim 8, wherein at least one of said one or more trading models comprises:

(a) a price collector component;

(b) a price filter component;

(c) a price database component;

(d) a gearing calculator component;

(e) a deal acceptor component;

(f) an opportunity catcher component; and

(g) a book-keeper component.

7. A system for trading currencies over a computer network, comprising:

(a) a server front-end in communication with said computer network;

(b) a database;

(c) a transaction server in communication with said server front-end and with said database;

(d) a rate server in communication with said server front-end; and

(e) a pricing engine in communication with said rate server;

further comprising a hedging engine in communication with said transaction server, wherein said hedging engine is operable to perform at least two of the following calculations;

(a) calculate a total amount of home currency appearing in all open positions;

(b) calculate an out-of-equilibrium exposure;

(c) calculate a new potential net exposure;

(d) calculate an equilibrium position;

(e) calculate boundaries of possible exposures;

(f) calculate values for a pair of quoting functions; and

(g) calculate an average price and an average spread.

11. A system for trading currencies over a computer network, comprising:

(a) a server front-end in communication with said computer network;

(b) a database;

(c) a transaction server in communication with said server front-end and with said database;

(d) a rate server in communication with said server front-end; and

(e) a pricing engine in communication with said rate server;

further comprising a margin control manager in communication with said transaction server and said database, wherein said margin control manager is operable to monitor on a tick-by-tick basis margin requirements of accounts and on said tick-by-tick basis liquidate holdings as needed to maintain specified margins.