Market participant issue selection system and method

• US 7,809,629 B2
• Filed: 04/07/2005
• Issued: 10/05/2010
• Est. Priority Date: 04/07/2005
• Status: Active Grant

• Current Assignee: Cboe Exchange, Inc. (Cboe Global Markets, Inc.)
• Original Assignee: Chicago Board Options Exchange Incorporated (Cboe Global Markets, Inc.)
• Inventors: Smollen, John E., Hustad, Daniel R., Pfaffenbach, Larry
• Primary Examiner(s): Kramer; James A
• Assistant Examiner(s): SHUMATE, PAUL W
• Application Number:
  US11/102,490
• Publication Number:
  US 20060229968A1
• Time in Patent Office: 2,007 Days
• Field of Search: 705 35- 37
• 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

Abstract

A system and method of allocating rights for quoting issues on a trading facility such as an exchange is described. The method may include providing market participants such as remote market makers with a listing of issues available for remote quote streaming where the available issues are ranked according to predetermined trading parameters. A market participant requests allocations of rights to certain issues and the request is filtered according to a value associated with the ranking of the selected issues. The system includes an issue selection database having a listing of issues available for trading where each issue is ranked based on a trading parameter. An issue selection communication module communicates with the issue selection database and is configured to list available issues and rankings. An issue allocation filter receives a market participant request and compares the selected issues in that request to one or more exchange-based rules.

Claims

1. A computer implemented method of allocating rights for quoting classes of options on an exchange, the method comprising:

maintaining in a database of an option class selection system a ranked database of classes of options available for trading by market participants associated with the exchange;

receiving at the option class selection system a request from a market participant having an ownership interest in the exchange to obtain rights to submit quotes in a subset of the plurality of available classes of options, wherein the ownership interest of the market participant is less than an amount necessary to obtain rights to submit quotes in all available classes of options;

automatically determining with the option class selection system if a total trading rights value associated with each of the available classes of options in the subset of available classes of options in the request is within a value of the ownership interest associated with the market participant, where each class of options in the subset of the plurality of available classes of options is assigned a trading rights value correlated to a ranking associated with the class of options in the ranked database; and

if the request is determined by the option class selection system to be within the value of the ownership interest associated with the market participant, automatically transmitting from the option class selection system an approval of the request.

2. The method of claim 1, wherein receiving the request from the market participant comprises receiving the request from a remote market maker.

3. The method of claim 2, wherein receiving the request further comprises displaying option class selection options to the remote market maker.

4. The method of claim 2 further comprising determining whether a maximum number of market participants are authorized to submit quotes for a particular class of options in the subset of the plurality of classes of options.

5. The method of claim 4, further comprising placing a remote market maker on a waiting list for the particular class of options if a maximum number of market participants is already authorized to submit quotes for the particular class of options, and automatically notifying the remote market maker when the particular class of options is available.

6. The method of claim 1, further comprising:

re-ranking classes of options in the ranked database of classes of options at predetermined intervals;

reviewing a value of classes of options in the subset of the plurality of classes of options;

notifying the market participant if the value of classes of options in the subset exceeds the exchange ownership value associated with the market participant.