Electronic trading system supporting anonymous negotiation and indications of interest

• US 7,475,046 B1
• Filed: 10/05/1999
• Issued: 01/06/2009
• Est. Priority Date: 10/05/1999
• Status: Expired due to Term

• Current Assignee: Bloomberg LP
• Original Assignee: Bloomberg LP
• Inventors: Foley, Kevin, Bang, Kim
• Primary Examiner(s): Hewitt; Calvin
• Assistant Examiner(s): Agwumezie; Charles C
• Application Number:
  US09/412,408
• Time in Patent Office: 3,381 Days
• Field of Search: 705/1, 705/35, 705/36, 705/37, 705/74
• US Class Current: 705/74
• CPC Class Codes: G06Q 20/383 Anonymous user system
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

A system conducts anonymous negotiations and supports indications of interest in trading stock. The system includes a database for storing public orders received from a public stock trading system; and a server for receiving hidden orders from a plurality of users and for conducting anonymous negotiations between first and second users with the hidden orders. The server repeatedly accesses the database to determine a match of any one of the hidden orders with any one of the public orders, and to execute a pair of orders selected from the hidden orders and the public orders. The system also transmits indications of interest (IOIs) into a trading environment using the server for processing a trading order from a first user and for maintaining a profile of a user. The profile includes a current IOI setting for controlling transmission of the IOI from the user. The server responds to a toggle command from the first user to control transmission of the IOI opposite to the current IOI setting. The server responds to the IOI setting being set to allow transmission by transmitting the IOI of the first user associated with the trading order.

Claims

1. A method for electronically trading stocks using an electronic trading system while maintaining the identity of the trading parties anonymous with respect to each other and with respect to users of the trading system, comprising:

a first party offering to buy or sell over the system a number of shares selected by the first party of a stock at a price selected by the first party from or to one or more counterparties selected by the first party;

the first party and a counterparty electronically agreeing to trade up to an agreed number of shares of the stock at an agreed price;

if there is no better trade in at least one stock order originating from outside the system for the particular stock for either the first party or the counterparty, the system electronically executing the trade agreed to by the first party and the counterparty, and if there is a better trade in at least one stock order originating from outside the system for the particular stock for either the first party or the counterparty, the system executing the better trade.

2. The method of claim 1 including the system identifying users who have engaged in recent trade or order activity in particular stocks, and wherein the first party offering to buy shares from or sell shares to one or more selected counterparties includes selecting the one or more counterparties from the users identified by the system.

3. The method of claim 1 comprising the first party and the counterparty electronically negotiating the price of the stock or the number of shares of the stock, or both, over the system prior to agreeing to the trade.

4. The method of claim 3 comprising determining if there is no better trade in the particular stock for either the first party or the counterparty at least once during negotiating and at least once after completion of negotiating and before any trade is executed between the first party and the counterparty.

5. The method of claim 1 comprising users of the system selecting counterparties to whom the system automatically electronically conveys orders of respective users.

6. The method of claim 1 wherein agreeing to trade up to an agreed number of shares of stock includes agreement by the first party and the counterparty to trade for less than the full number of shares offered at an agreed price.

7. A system for conducting anonymous trades of stock, including:

at least one computer with associated computer memory which receives anonymous orders from a plurality of users of the system, and is programmed to support anonymous electronic negotiations between a first user and a second user of the system for a trade of a stock;

the at least one computer also receiving stock orders originating from outside the system and being programmed to electronically execute;

a trade of matching orders of users of the system;

a trade of an order from a user of the system matched with an order originating from outside the system;

a trade negotiated by a first and a second user of the system in accordance with at least price and quantity terms agreed to by the first and second users;

a trade of an order of a first user of the system to a negotiated trade agreed to by the first user and a second user of the system and an order originating from outside the system; and

a trade of an order of the second user of the system to the negotiated trade and an order originating from outside the system;

the at least one computer being programmed to execute a trade in accordance with a priority when the same trade becomes available;

between two orders originating within the system, and

between an order originating from within the system and an order originating from outside the system.

8. The system of claim 7 wherein the at least one computer is programmed to provide priority of trade execution to orders originating within the system.

9. A system for conducting anonymous negotiations in trading stock comprising:

at least one computer with associated computer memory which receives orders from a plurality of users and orders originating from outside the system, the at least one computer being programmed to;

support anonymous negotiations between first and second users with orders;

to repeatedly determine whether there is a match of any one of the orders from the first and second users with any one of the orders originating from outside the system; and

to execute a pair of orders selected from the orders from the first and second users and the orders originating from outside the system.

10. The system of claim 9 wherein the pair of orders includes orders of the first and second users paired by anonymous negotiation and by acceptance by the first and second users.

11. The system of claim 9 wherein the pair of orders includes a first order of the first user and an order originating from outside the system received by the at least one computer matched to the first order.

12. The system of claim 9 wherein the at least one computer is programmed to conduct anonymous negotiations between the first user and a plurality of second users selected by the first user.

13. The system of claim 9 comprising a user station having an input device and an output device.

14. The system of claim 13 wherein the at least one computer is programmed to provide available second users from which the first user can select using the input device.

15. The system of claim 13 wherein the at least one computer is programmed to provide a pop-up input window to the output device for receiving user inputs for conducting the negotiations between the first and second users.