Systems and methods for an online credit derivative trading system

• US 7,587,355 B2
• Filed: 12/09/2002
• Issued: 09/08/2009
• Est. Priority Date: 12/09/2002
• Status: Active Grant

• Current Assignee: Creditex Group, Inc. (TP ICAP Plc)
• Original Assignee: Creditex Group, Inc. (TP ICAP Plc)
• Inventors: Dar, Mazyar M., Hirani, Sunil G.
• Primary Examiner(s): Trammell; James P
• Assistant Examiner(s): Swartz; Jamie H
• Application Number:
  US10/316,167
• Publication Number:
  US 20040143535A1
• Time in Patent Office: 2,465 Days
• Field of Search: 705 36- 38, 705/35
• 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 credit derivative trading system comprises a credit derivative authority configured to receive defined positions for credit derivatives and update a plurality of trade clients in real-time whenever there is movement in the market for a particular credit derivative.

Claims

1. A credit derivative trading system for processing credit derivative transactions, comprising:

a database configured to store credit derivative information for certain reference entities;

memory configured to store execution instructions; and

a processor coupled with the database and the memory, the processor configured to execute the instructions, the instructions configured to cause the processor to

receive a defined position of a credit derivative from a trader client, the defined position indicating at least a name of a reference entity, an expected termination, and a bid or offer price for the credit derivative;

display the defined position of the credit derivative to a plurality of other trader clients to request positions;

provide a collection of trade histories of trades of credit derivatives engaged in by the trader client to at least one of the plurality of other trader clients;

receive one or more positions for the credit derivative from a respective one or more of the plurality of other trader clients;

determine, if a received position is a bid for the credit derivative, whether the received bid is improved relative to all other bids stored in the database for the credit derivative and;

determine, if a received position is an offer price for the credit derivative, whether the offer price is improved relative to all other offer prices stored in the database for the credit derivative; and

update information displayed to the plurality of other trader clients when the received bid is improved relative to all other bids for the credit derivative stored in the database or when the received offer price is improved relative to all other offer prices for the credit derivative stored in the database to respectively indicate that the received bid is improved relative to all other bids or that the received offer price is improved relative to all other offer prices.

2. The credit derivative trading system of claim 1, wherein the instructions are further configured to cause the processor to update the plurality of other trader clients in real-time.

3. The credit derivative trading system of claim 1, wherein the instructions are further configured to cause the processor to update the information stored in the database based on the received position.

4. The credit derivative trading system of claim 1, wherein the instructions are further configured to cause the processor to validate the received position before determining if the received position constitutes a received bid that is improved relative to stored bids or a received offer price that is improved relative to stored offer prices.

5. The credit derivative trading system of claim 4, wherein the instructions are further configured to cause the processor to cause an error message to be displayed to the trader client when the validation of the received position fails.

6. The credit derivative trading system of claim 1, wherein the instructions are further configured to cause the processor to receive a responsive position from one of the plurality of other trader clients.

7. The credit derivative trading system of claim 6, wherein the instructions are further configured to cause the processor to update the information stored in the database based on the responsive position.

8. The credit derivative trading system of claim 1, wherein the instructions are further configured to cause the processor to receive an acceptance of the received position from one of the plurality of other trader clients.

9. The credit derivative trading system of claim 8, wherein the instructions are further configured to cause the processor to allow the trader client to interact directly with the other trader client that accepted the received position or with a broker once the received position is accepted.

10. The credit derivative trading system of claim 9, wherein the instructions are further configured to cause the processor to update the information stored in the database based on the received acceptance and the interaction between the trader client and the other trader client or the broker.

11. The credit derivative trading system of claim 1, wherein the instructions are further configured to cause the processor to facilitate communication between the trader client and at least one of the plurality of other trader clients.

12. The credit derivative trading system of claim 1, wherein the instructions are further configured to cause the processor to receive a request to render the defined position inactive and to render the position inactive in response to a received inactivation request.

13. The credit derivative trading system of claim 12, wherein the instructions are further configured to cause the processor to receive a request to reactivate the inactive position and to reactivate the position in response to the received reactivation request.

14. The credit derivative trading system of claim 1, wherein the instructions are further configured to cause the processor to receive a request from a trader client for a history of spread for a certain credit derivative and to provide the spread history in response to the received request.

15. A method for online trading of credit derivatives, comprising:

receiving, in an online trading system, a defined position of a credit derivative from a trader client, the defined position indicating at least a name of a reference entity, an expected termination, and a bid or offer price for the credit derivative;

displaying the defined position of the credit derivative to a plurality of other trader clients to request positions;

providing a collection of trade histories of trades of credit derivatives engaged in by the trader client to at least one of the plurality of other trader clients;

receiving one or more positions of the credit derivative from a respective one or more of the plurality of other trader clients;

determining via a computer device, if a received position is a bid for the credit derivative, whether the received bid is improved relative to all other bids stored in the database for the credit derivative;

determining via a computer device, if a received position is an offer price for the credit derivative, whether the offer price is improved relative to all other offer prices stored in the database for the credit derivative;

updating via a computer device, information displayed to the plurality of other trader clients when the received bid is improved relative to all other bids for the credit derivative stored in the database or when the received offer price is improved relative to all other offer prices for the credit derivative stored in the database to respectively indicate that the received bid is improved relative to all other bids or that the received offer price is improved relative to all other offer prices.

16. The method of claim 15, further comprising updating the plurality of other trader clients in real-time.

17. The method of claim 15, further comprising updating the information stored in the database based on the received position.

18. The method of claim 15, further comprising validating the received position before determining if the received position constitutes a received bid that is improved relative to stored bids or a received offer price that is improved relative to stored offer prices.

19. The method of claim 18, further comprising causing an error message to be displayed to the trader client when the validation of the received position fails.

20. The method of claim 15, further comprising receiving a responsive position.

21. The method of claim 20, further comprising updating the information stored in the database based on the responsive position.

22. The method of claim 15, further comprising receiving an acceptance of the received position from one of the plurality of other trader clients.

23. The method of claim 22, further comprising allowing the trader client to interact directly with the other trader client that accepted the received position or with a broker once the received position is accepted.