Computer implemented and/or assisted methods and systems for providing guaranteed, specified and/or predetermined execution prices in a guaranteed, specified and/or predetermined timeframe on the purchase or sale of, for example, listed options
First Claim
1. A method of transmitting an order for execution of a listed options contract at at least one of a guaranteed order execution price and a guaranteed order execution timeframe offered to an investor submitting the order using a computer, the method at least one of implemented and assisted by the computer and comprising at least one of the sequential, sequence independent and non-sequential steps of:
- electronically receiving the order, by a first computer order routing system, from a first broker-dealer computer system;
transmitting the order to be processed by the first computer order routing system to determine a presence of a first affiliate market-maker of the first broker-dealer associated with the first broker-dealer computer system with step-up capability for the listed options contract on a first options exchange implemented by a first options exchange computer system;
electronically receiving by the first computer order routing system in a first communication when the first affiliate market-maker is present, and electronically transmitting a second communication instructing the first broker-dealer computer system to transmit the order to the first options exchange computer system for electronic execution in accordance with at least one of the guaranteed order execution price and the guaranteed order execution timeframe offered to the investor submitting the order; and
when the first affiliate market-maker is not present, electronically transmitting by the first computer order routing system a third communication instructing a second broker-dealer computer system associated with a second broker-dealer to transmit the order for electronic execution in accordance with the at least one of the guaranteed order execution price and the guaranteed order execution timeframe offered to the investor submitting the order upon receipt of a determination by at least one of the first computer order routing system and a second computer order routing system that there is a second affiliate market-maker of the second broker-dealer with step-up capability for the listed options contract on at least one of the first options exchange implemented by the first options exchange computer system and a second options exchange implemented by a second options exchange computer system.
4 Assignments
0 Petitions
Accused Products
Abstract
Methods and systems are provided which enable options broker-dealers to guarantee execution of an option trade order within a specified time window. By providing means to quantify and mitigate the effects of several factors which contribute to options market inefficiency (e.g., market structure, regulatory constraints, and “market misbehavior”), these methods and systems eliminate or at least reduce the level of broker-dealer risk inherent in offering an execution speed guarantee, while optionally simultaneously providing better execution quality for investors.
40 Citations
54 Claims
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1. A method of transmitting an order for execution of a listed options contract at at least one of a guaranteed order execution price and a guaranteed order execution timeframe offered to an investor submitting the order using a computer, the method at least one of implemented and assisted by the computer and comprising at least one of the sequential, sequence independent and non-sequential steps of:
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electronically receiving the order, by a first computer order routing system, from a first broker-dealer computer system; transmitting the order to be processed by the first computer order routing system to determine a presence of a first affiliate market-maker of the first broker-dealer associated with the first broker-dealer computer system with step-up capability for the listed options contract on a first options exchange implemented by a first options exchange computer system; electronically receiving by the first computer order routing system in a first communication when the first affiliate market-maker is present, and electronically transmitting a second communication instructing the first broker-dealer computer system to transmit the order to the first options exchange computer system for electronic execution in accordance with at least one of the guaranteed order execution price and the guaranteed order execution timeframe offered to the investor submitting the order; and when the first affiliate market-maker is not present, electronically transmitting by the first computer order routing system a third communication instructing a second broker-dealer computer system associated with a second broker-dealer to transmit the order for electronic execution in accordance with the at least one of the guaranteed order execution price and the guaranteed order execution timeframe offered to the investor submitting the order upon receipt of a determination by at least one of the first computer order routing system and a second computer order routing system that there is a second affiliate market-maker of the second broker-dealer with step-up capability for the listed options contract on at least one of the first options exchange implemented by the first options exchange computer system and a second options exchange implemented by a second options exchange computer system. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43)
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44. A method of transmitting an order for execution of a listed options contract at at least one of a guaranteed, specified and predetermined execution price and within at least one of a guaranteed ,specified and predetermined timeframe offered to an investor submitting the order using a computer, the method at least one of implemented and assisted by the computer and comprising at least one of the sequential, sequence independent and non-sequential steps of:
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processing the order by a computer routing system to determine which of a plurality of market-makers has step-up capability for the listed options contract on at least one options exchange; and electronically sending the order to an options exchange computer system on which a market-maker with step-up capability for the listed options contract operates for execution in accordance with a guaranteed, specified and/or predetermined execution price and timeframe offered to the investor submitting the order. - View Dependent Claims (45)
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46. A method of transmitting an order for execution of a listed options contract at at least one of a guaranteed, specified and predetermined execution price and within at least one of a guaranteed ,specified and predetermined timeframe offered to the investor submitting the order using a computer, the method at least one of implemented and assisted by the computer and comprising at least one of the sequential, sequence independent and non-sequential steps of:
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forming a rapid execution consortium (REC) that comprises a plurality of options market-makers, wherein the members of the REC collectively have step-up capability for a substantial portion of all listed options classes; and electronically sending the order to an options exchange computer system for execution in accordance with the guaranteed, specified and/or predetermined execution price and timeframe offered to the investor submitting the order based at least in part on the presence of a market-maker with step-up capability for the listed options contract on the exchange. - View Dependent Claims (47, 48, 49, 50)
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51. A method of transmitting an order for execution of a listed options contract at at least one of a guaranteed, specified and predetermined execution price and within at least one of a guaranteed , specified and predetermined timeframe offered to the investor submitting the order using a computer, the method at least one of implemented and assisted by the computer and comprising at least one of the sequential, sequence independent and non-sequential steps of:
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electronically processing the order by a first computer order routing system to determine which of a plurality of option broker-dealers of a rapid execution consortium (REC) has an affiliate market-maker with step-up capability for the listed options contract on at least one options exchange; electronically providing the order to one of the option broker-dealers of the REC that is determined to have an affiliate that is a market-maker with step-up capability for the listed options contract on at least one options exchange; and electronically sending the order to an exchange computer system on which at least one affiliate market-maker with step-up capability for the listed options contract operates for execution in accordance with a guaranteed, specified and/or predetermined execution price and timeframe offered to the investor submitting the order.
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52. A method of transmitting an order for execution of a listed options contract at at least one of a guaranteed, specified and predetermined execution price and/or within at least one of a guaranteed, specified and predetermined timeframe offered to the investor submitting the order using a computer, the method at least one of implemented and assisted by the computer and comprising at least one of the sequential, sequence independent and non-sequential steps of:
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electronically receiving the order, by a first computer order routing system, from a first broker-dealer computer system; transmitting the order to be processed by the first computer order routing system to determine a presence of a first affiliate market-maker of the first broker-dealer associated with the first broker-dealer computer system with step-up capability for the listed options contract on a first options exchange implemented by a first options exchange computer system; electronically receiving by the first computer order routing system a first communication when the first affiliate market-maker is present, and electronically transmitting a second communication instructing the first broker-dealer computer system to transmit the order to the first options exchange computer system for electronic execution in accordance with at least one of the guaranteed, specified and predetermined execution price and/or within at least one of a the guaranteed, specified and predetermined timeframe offered to the investor submitting the order; and when the first affiliate market-maker is not present, electronically transmitting by the first computer order routing system a third communication instructing a second broker-dealer computer system associated with a second broker-dealer to transmit the order for electronic execution in accordance with the at least one of the guaranteed, specified and predetermined execution price and/or within at least one of the guaranteed, specified and predetermined timeframe offered to the investor submitting the order upon receipt of a determination by at least one of the first computer order routing system and a second computer order routing system that there is a second affiliate market-maker of the second broker-dealer with step-up capability for the listed options contract on at least one of the first options exchange implemented by the first options exchange computer system and a second options exchange implemented by a second options exchange computer system.
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53. A computer system executing an order for a listed options contract, comprising:
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means for receiving the order by a first broker-dealer; means for processing the order by a first routing system to determine a presence of a first affiliate market-maker of the first broker-dealer with step-up capability for the listed options contract on a first options exchange; means for sending the order by the first broker-dealer, if it is determined that the first affiliate market-maker is present, to the first options exchange for execution in accordance with at least one of a guaranteed, specified and predetermined execution price and/or within at least one of a guaranteed, specified and predetermined timeframe offered to the investor submitting the order; and means for sending the order to a second broker-dealer, if it is determined that the first affiliate market-maker is not present, for execution in accordance with at least one of the guaranteed, specified and predetermined execution price and/or within at least one of the guaranteed, specified and predetermined timeframe offered to the investor submitting the order upon a determination by at least one of the first routing system and a second routing system that there is a second affiliate market-maker of the second broker-dealer with step-up capability for the listed options contract on at least one of the first options exchange and a second options exchange.
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54. A computer system executing an order for a listed options contract, comprising:
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an input device receiving the order by a first broker-dealer; a first processor determining a presence of a first affiliate market-maker of the first broker-dealer with step-up capability for the listed options contract on a first options exchange; and an order transmitter for sending the order by the first broker-dealer, if it is determined that the first affiliate market-maker is present, to the first options exchange for execution in accordance with at least one of a guaranteed, specified and predetermined execution price and/or within at least one of a guaranteed, specified and predetermined timeframe offered to the investor submitting the order; wherein, if it is determined that the first affiliate market-maker is not present, the order transmitter sends the order to a second broker-dealer for execution in accordance with at least one of the guaranteed, specified and predetermined execution price and/or within at least one of the guaranteed, specified and predetermined timeframe offered to the investor submitting the order upon a determination by at least one of the first processor and a second processor that there is a second affiliate market-maker of the second broker-dealer with step-up capability for the listed options contract on at least one of the first options exchange and a second options exchange.
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Specification