Confidential block trading system and method

• US 7,685,052 B2
• Filed: 06/24/2003
• Issued: 03/23/2010
• Est. Priority Date: 06/01/2000
• Status: Expired due to Fees

• Current Assignee: Virtu ITG Software Solutions LLC
• Original Assignee: Aritas Group, Inc.
• Inventors: Federspiel, Fred J., Waelbroeck, Henri, Lopez, John E.
• Primary Examiner(s): Kalinowski; Alexander
• Assistant Examiner(s): Ebersman; Bruce I
• Application Number:
  US10/603,100
• Publication Number:
  US 20040059666A1
• Time in Patent Office: 2,464 Days
• Field of Search: 705/37, 705/36.R, 705/38, 705/39
• 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 method for facilitating trading of securities over a computer system comprises electronically receiving a buy or sell order for a security from a first user; determining that the order is reasonably priced; transmitting to a second user an electronic notification that a reasonably priced order for the security is present, but without notifying the second user of the side of the first user'"'"'s order; receiving an order from the second user, wherein the second user'"'"'s order is a contra to the first user'"'"'s order and sufficiently aggressive in price to cross the first user'"'"'s order; and executing a trade comprising the first user'"'"'s order and the second user'"'"'s order at the limit price of the first user'"'"'s order. Also described is an electronic system for facilitating securities trading that comprises a facilitator module, a financial information exchange server, a transactional database, and an analytics server.

Claims

1. A method for facilitating trading of securities over a computer system, comprising the computer implemented steps of:

electronically receiving a first buy or sell order for a security from a first user;

calculating a block price range for said security, said block price range having an upper end and a lower end;

determining that said first order has a price that is reasonably priced, wherein said price is considered reasonably priced if said price comprises either;

for a sell order, said price is equal to or lower than said upper end of said block price range, or

for a buy order, said price is equal to or higher than said lower end of said block price range;

transmitting to a second user an electronic notification that a reasonably priced order for said security is present, but without notifying said second user of the side of said first order;

receiving a second order from said second user, wherein said second order is a contra to said first order and said second order nearly matches but does not cross said first order;

transmitting an electronic contra order notification to said first user after said second order is received, said contra order notification indicating that a nearly matching contra order is active within the system;

transmitting a second electronic contra order notification to said second user after said second order is received, said second contra order notification indicating that a nearly matching order contra to said second order is active within the system;

receiving a third order from said first user, said third order being a contra to said second order and crossing said second order; and

executing a trade comprising said second order and said third order.

2. A method as in claim 1, wherein said second user receives said second contra order notification only after a predetermined time period has lapsed after said second order is received.

3. A method as in claim 1, wherein said first user receives said contra order notification immediately after said second order is received.