Computer-implemented securities trading system with virtual currency and virtual specialist

• US 7,487,123 B1
• Filed: 08/25/1999
• Issued: 02/03/2009
• Est. Priority Date: 03/25/1996
• Status: Expired due to Fees

• Current Assignee: CFPH LLC (Cantor Fitzgerald, L.P.)
• Original Assignee: CFPH LLC (Cantor Fitzgerald, L.P.)
• Inventors: Keiser, Timothy M., Burns, Michael R.
• Primary Examiner(s): ALLEN, AKIBA KANELLE
• Application Number:
  US09/382,907
• Time in Patent Office: 3,450 Days
• Field of Search: 705/37, 705/35, 705/36, 705/1, 705/36.R
• 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
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A computer-implemented financial management system provides the trading of securities via a network using virtual currency. A server computer receives buy and sell orders for derivative financial instruments from a plurality of client computers. The server computer attempts to match the buy and sell orders and then generates a market price through the use of a virtual specialist program executed by the server computer. The virtual specialist program responds to an imbalance in the matching of the buy and sell orders. The virtual currency accumulated by HSX account holders as a result of successful trading may be converted to another currency, credited toward the cost of merchandise provided through a vendor'"'"'s web site, etc.

Claims

1. A method for trading a plurality of instruments in a computerized trading system that receives buy orders and sell orders for an instrument, the method comprising:

Measuring with at least one server computer an imbalance between the buy orders and sell orders for the instrument received over a given period, the buy and seller orders received from at least a first computer associated with a first trader and a second computer associated with a second trader, each of the first and second computers coupled to the at least one server computer over a communication network;

Computing with at least one server computer a projected price movement based on the measured imbalance between the number of buy and sell orders;

setting a market price for the instrument based upon the received buy and sell orders and the measured imbalance;

automatically generating additional buy orders or sell orders for the instrument at the market price to guarantee execution of some or all of the received buy or sell orders;

generating an electronic currency to execute the buy or sell orders;

crediting a first trader'"'"'s account with proceeds in the electronic currency for the executed sell orders by the first trader; and

debiting a second trader'"'"'s account in the electronic currency for the executed buy orders by the second trader.

2. The method according to claim 1, further comprising exchanging the electronic currency in the first or second trader'"'"'s account for desired currency.

3. The method according to claim 2, wherein the electronic currency is exchanged at a currency exchange web site, and wherein a request for the exchange is transmitted to the currency exchange web site via a secured communication.

4. The method according to claim 1, further comprising purchasing goods or services using the electronic currency in the first or second trader'"'"'s account, the goods or services being offered for sale by an on-line vendor via a web site on the Internet.

5. The method according to claim 4, wherein a request for the purchase is transmitted to the vendor'"'"'s web site via a secured communication.

6. The method according to claim 4, wherein the vendor debits the first or second trader'"'"'s account in the electronic currency for the purchase of goods or services via a secured communication.

7. The method according to claim 1, wherein the additional buy orders or sell orders for the instrument are automatically generated at the market price if the projected price movement is greater than or equals a predetermined price movement threshold.

8. A computerized trading system for trading a plurality of instruments via buy orders and sell orders, comprising at least one server computer comprising program code that when executed causes the at least one server computer to perform a method comprising:

measuring an imbalance between the buy orders and sell orders for an instrument received over a given period, the buy and seller orders received from at least a first computer associated with a first trader and a second computer associated with a second trader, each of the first and second computers coupled to the at least one server computer over a communication network;

computing a projected price movement based on the measured imbalance between the number of buy and sell orders;

setting a market price for the instrument based upon the received buy and sell orders and the measured imbalance;

automatically generating additional buy orders or sell orders for the instrument at the market price to guarantee execution of some or all of the received buy or sell orders;

generating an electronic currency to execute the buy and sell orders; and

crediting a first trader'"'"'s account with proceeds in the electronic currency for the executed sell orders by the first trader and debiting a second trader'"'"'s account in the electronic currency for the executed buy orders by the second trader.

9. The system according to claim 8, the program code causes the at least one server computer to perform the method that further comprises

exchanging the electronic currency in the first or second trader'"'"'s account for desired currency.

10. The system according to claim 8, the program code causes the at least one server computer to perform the method that further comprises purchasing goods or services using the electronic currency in the first or second trader'"'"'s account, the goods or services being offered for sale by an on-line vendor via a web site on the Internet.

11. The system according to claim 8, wherein the additional buy orders or sell orders for the instrument are automatically generated at the market price if the projected price movement is greater than or equals a predetermined price movement threshold.

12. A computer-readable storage medium for storing program code, that when executed, causes at least one server computer to perform a method for trading a plurality of instruments in a computerized trading system that receives buy orders and sell orders for an instrument, the method comprising:

measuring an imbalance between the buy orders and sell orders for the instrument received over a given period, the buy and seller orders received from at least a first computer associated with a first trader and a second computer associated with a second trader, each of the first and second computers coupled to the at least one server computer over a communication network;

computing a projected price movement based on the measured imbalance between the number of buy and sell orders;

setting a market price for the instrument based upon the received buy and sell orders and the measured imbalance;

automatically generating additional buy orders or sell orders for the instrument at the market price to guarantee execution of some or all of the received buy or sell orders;

generating an electronic currency to execute the buy or sell orders;

crediting a first trader'"'"'s account with proceeds in the electronic currency for the executed sell orders by the first trader; and

debiting a second trader'"'"'s account in the electronic currency for the executed buy orders by the second trader.

13. The computer-readable storage medium according to claim 12, the method further comprising exchanging the electronic currency in the first or second trader'"'"'s account for desired currency.

14. The computer-readable storage medium according to claim 12, the method further comprising purchasing goods or services using the electronic currency in the first or second trader'"'"'s account, the goods or services being offered for sale by on-line vendor via a web site on the Internet.

15. The computer-readable storage medium according to claim 12, where in the additional buy orders or sell orders for the instrument are automatically generated at the market price if the projected price movement is greater than or equals a predetermined price movement threshold.