Electronic trading system including an auto-arbitrage feature or name switching feature

• US 7,725,383 B2
• Filed: 05/29/2007
• Issued: 05/25/2010
• Est. Priority Date: 12/12/1995
• Status: Expired due to Fees

• Current Assignee: Reuters Limited (The Woodbridge Co. Ltd.)
• Original Assignee: Reuters Limited (The Woodbridge Co. Ltd.)
• Inventors: Silverman, David L., Wilton, Rosalyn S.
• Primary Examiner(s): Dass; Harish T.
• Application Number:
  US11/754,691
• Publication Number:
  US 20080033865A1
• Time in Patent Office: 1,092 Days
• Field of Search: 273/278, 707/103.R, 705 35- 37
• US Class Current: 705/37
• CPC Class Codes: G06Q 30/00 Commerce
• CPC Class Codes: G06Q 30/08 Auctions
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• 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

An electronic trading system includes a plurality of trader terminals for receiving credit parameter data, arbitrage parameter data, and trading data from a trading entity, and a computer connected to the plurality of trader terminals via a communications network that receives and stores the credit parameter data and the trading data. The system also includes a detector circuit or program for automatically detecting an available arbitrage opportunity including a plurality of trades based on the credit parameter data, the arbitrage parameter data, and the trading data. A similar electronic trading system includes an automatic name switch feature wherein the plurality of trader terminals receive name switch parameter data, credit parameter data, and trading data from the trading entity. A circuit or program automatically detects and executes available name switch transactions based on the credit parameter data, the name switch parameter data, and the trading data.

Claims

1. A computer for use in an electronic trading system, the computer comprising:

a network interface for communicating with a plurality of trading entities;

a processor configured to perform actions comprising;

receiving trading data and arbitrage parameter data for the plurality of trading entities including a first, second and third trading entity;

automatically detecting contingent trades between the first trading entity and the second trading entity and between the first trading entity and the third trading entity according to the trading data and the arbitrage parameter data;

locking trading data for the contingent trades prior to executing the contingent trades to ensure the contingent trades remain available during execution of the contingent trades; and

if the contingent trades are locked, executing the contingent trades.

2. The computer of claim 1, wherein the processor is further configured to create an arbitrage opportunity based on the contingent trades including determining that a direct trade between the second trading entity and the third trading entity would be unavailable.

3. The computer of claim 2, wherein, for creating an arbitrage opportunity, the processor is configured to determine that a direct trade between the second trading entity and the third trading entity would be unavailable based, at least in part, on credit-related discrepancies.

4. The computer of claim 2, wherein, for creating an arbitrage opportunity, the credit-related discrepancies include credit parameter data for the first, second and third trading entities.

5. The computer of claim 4, wherein the credit parameter data includes a first credit limit for the first trading entity with respect to the second trading entity and a second credit limit for the first trading entity with respect to the third trading entity.

6. The computer of claim 5, wherein the credit parameter data further includes a third credit limit for the second trading entity with respect to the third trading entity and a fourth credit limit for the second trading entity with respect to the first trading entity.

7. The computer of claim 6, wherein the credit parameter data further includes a fifth credit limit for the third trading entity with respect to the first trading entity and a sixth credit limit for the third trading entity with respect to the second trading entity.

8. The computer of claim 1 wherein the processor is further configured to perform actions comprising:

receiving an indication from the first trading entity whether to pursue or not pursue the detected contingent trades; and

executing the detected contingent trades in dependence upon the indication.

9. The computer of claim 1, wherein, for receiving trading data and arbitrage parameter data, the arbitrage parameter data comprises at least one of a minimum spread parameter, an average spread parameter, a minimum size parameter and a maximum size parameter.

10. The computer of claim 9, wherein the determination of contingent trades is based on, at least in part, on the minimum spread parameter, the average spread parameter, the minimum size parameter and the maximum size parameter.

11. The computer of claim 1, wherein the processor is further configured to automatically execute the detected contingent trades.

12. A method comprising:

receiving, at a computer, trading data and arbitrage parameter data for a plurality of trading entities including a first, second and third trading entity;

automatically detecting, via the computer, contingent trades between the first trading entity and the second trading entity and between the first trading entity and the third trading entity according to the trading data and the arbitrage parameter data;

locking trading data for the contingent trades, via the computer, prior to executing the contingent trades to ensure the contingent trades remain available during execution of the contingent trades; and

if the computer determines the contingent trades are locked, executing the contingent trades via the computer.

13. The method of claim 12, further comprising creating an arbitrage opportunity based on the contingent trades including the computer determining that a direct trade between the second trading entity and the third trading entity would be unavailable.

14. The method of claim 13, wherein, for creating an arbitrage opportunity via the computer, the computer determines that a direct trade between the second trading entity and the third trading entity would be unavailable based, at least in part, on credit parameter data for the first, second and third trading entities.

15. The method according to claim 14, wherein the credit parameter data includes a first credit limit for the trading entity with respect to the second trading entity and a second credit limit for the first trading entity with respect to the third trading entity.

16. The method according to claim 15, wherein the credit parameter data further includes a third credit limit for the second trading entity with respect to the third trading entity and a fourth credit limit for the second trading entity with respect to the first trading entity.

17. The method according to claim 16, wherein the credit parameter data further includes a fifth credit limit for the third trading entity with respect to the first trading entity and a sixth credit limit for the third trading entity with respect to the second trading entity.

18. The method according to claim 12, further comprising:

receiving, at the computer, an indication from the first trading entity whether to pursue or not pursue the detected contingent trades; and

executing the detected contingent trades in dependence upon the indication.

19. The method according to claim 12, wherein, for receiving, at the computer, trading data and arbitrage parameter data, the arbitrage parameter data comprises at least one of a minimum spread parameter, an average spread parameter, a minimum size parameter and a maximum size parameter.

20. The method according to claim 19, wherein the determination of contingent trades is based on, at least in part, on the minimum spread parameter, the average spread parameter, the minimum size parameter and the maximum size parameter.