Price change of orders from reserve in an electronic trading system

• US 7,822,672 B2
• Filed: 04/20/2001
• Issued: 10/26/2010
• Est. Priority Date: 04/20/2001
• Status: Active Grant

• Current Assignee: Bloomberg LP
• Original Assignee: Bloomberg LP
• Inventors: Hausman, Andrew
• Primary Examiner(s): Oyebisi; Ojo O
• Application Number:
  US09/839,529
• Publication Number:
  US 20020178104A1
• Time in Patent Office: 3,476 Days
• Field of Search: 705/35, 705/36.R, 705/37
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

Electronic trading of interests using reserves and a price change feature. A portion of a total desired trade quantity may be held in reserve, and thereby not disclosed in the relevant market. The invention provides for a subsequent trade order or quotation to be automatically initiated from the reserve when the disclosed order is accepted. The price of the subsequent order of a given reserve quantity will be different from the prior disclosed price. The process for disclosing a subsequent order may be fully or partially automatic, e.g., with or without a requirement for a response to a prompt by the trader entering the order. Preferably, the cycle of new orders with changed prices continues until the reserve is exhausted. The invention is useful for trading, for example, current or future interests in equities, fixed-income securities, currencies, and commodities such as foods, resources, energy, and emissions rights, and other interests.

Claims

1. A method for electronic trading of interests over at least one network by a system including at least one computer, the method comprising:

the at least one computer receiving over the at least one network an order for an interest comprising terms for a trade of a total desired quantity of the interest, the terms comprising an identification of the interest, an initial price, an initial quantity, and a reserve quantity, the total desired quantity being equal to a sum of the initial quantity and the reserve quantity;

based on the received order, the at least one computer providing for disclosure to potential counterparties over the at least one network terms for a first proposed trade of the interest, the terms for the first proposed trade comprising an identification of the interest, the initial price, and the initial quantity;

the at least one computer, after acceptance of the first proposed trade for all or part of the initial quantity, providing for disclosure to potential counterparties over the at least one network terms of a second proposed trade of the interest, the terms for the second proposed trade comprising an identification of the interest, a second price, and a second quantity, the second price being equal to the initial price changed by a reserve price change associated with the order, and the second quantity comprising at least a portion of the reserve quantity; and

prior to the acceptance of the first proposed trade, the at least one computer not providing for disclosure to potential counterparties over the at least one network of any portion of the reserve quantity.

2. The method of claim 1, wherein the interest comprises a commodities contract.

3. The method of claim 2, wherein the contract comprises an energy forward contract.

4. The method of claim 1, wherein the interest comprises an interest in an equity security.

5. The method of claim 1, wherein the interest comprises an interest in a fixed income security.

6. The method of claim 1, wherein the interest comprises currency.

7. The method of claim 1, wherein the interest comprises an interest in a first currency and the initial price and the second price are expressed in a second currency.

8. The method of claim 1, wherein all terms of the second proposed trade are automatically provided for disclosure to potential counterparties over the at least one network by the at least one computer after acceptance of the first proposed trade.

9. The method of claim 1, wherein all terms of the second proposed trade are provided for disclosure to potential counterparties over the at least one network by the at least one computer after acceptance of the first proposed trade and receipt by the at least one computer over the at least one network of a given signal.

10. The method of claim 1, wherein the proposed trades are proposed sales, and the reserve price change increases the initial price.

11. The method of claim 1, wherein the proposed trades are proposed purchases, and the reserve price change decreases the initial price.

12. The method of claim 1, wherein the second quantity is equal to a preselected quantity, or if the reserve quantity is less than the preselected quantity, all of the reserve quantity.

13. The method of claim 1, further comprising:

after acceptance of the second proposed trade, the at least one computer providing for disclosure to potential counterparties over the at least one network terms of a third proposed trade of the interest the terms for the third proposed trade comprising an identification of the interest, a third price, and a third quantity, the third price being equal to the second price changed by the reserve price change, and the third quantity being not greater than the reserve quantity less the second quantity.

14. The method of claim 13, wherein the third quantity is equal to a preselected quantity, or if the quantity of reserve remaining is less than the first and second quantities, all remaining reserve quantity.

15. The method of claim 1, further comprising completing at least one of the trades.

16. In a method for electronic trading of interests over at least one network by a system including at least one computer, wherein an order for an interest includes a total quantity, a reserve quantity and an initial price, and wherein the order is provided for disclosure over the network by the at least one computer with a quantity of the total quantity less the reserve quantity and with the initial price, the improvement comprising the at least one computer automatically providing for disclosure over the at least one network terms of a subsequent order for all or part of the total quantity from the reserve quantity after the occurrence of a given condition, the terms for the subsequent order to be provided for disclosure after the occurrence of the given condition comprising a subsequent price and a subsequent quantity, the subsequent price being equal to the initial disclosed price changed by a reserve price change associated with the order, and the subsequent quantity comprising at least a portion of the reserve quantity.

17. The method of claim 16, wherein the condition comprises acceptance of a portion of the order for which the quantity and price have been disclosed.

18. A computer program product comprising a computer readable medium having stored thereon computer code which when executed by at least one computer causes the at least one computer to perform a method for trading interests over at least one network, the method comprising:

the at least one computer receiving over the at least one network an order for an interest comprising terms for a trade of a total desired quantity of the interest, the terms comprising an identification of the interest, an initial price, an initial quantity, and a reserve quantity, the total desired quantity being equal to a sum of the initial quantity and the reserve quantity;

based on the received order, the at least one computer providing for disclosure to potential counterparties over the at least one network terms for a first proposed trade of the interest the terms for the first proposed trade comprising an identification of the interest, the initial price, and the initial quantity;

the at least one computer, after acceptance of the first proposed trade for all or part of the initial quantity, providing for disclosure to potential counterparties over the at least one network terms of the second proposed trade of the interest, the terms for the second proposed trade comprising an identification of the interest, a second price, and a second quantity, the second price being equal to the initial price changed by a reserve price change associated with the order, and the second quantity comprising at least a portion of the reserve quantity; and

prior to the acceptance of the first proposed trade, the at least one computer not providing for disclosure to potential counterparties over the at least one network of any portion of the reserve quantity.

19. The product of claim 18, wherein the interest comprises a commodities contract.

20. The product of claim 19, wherein the contract comprises an energy forward contract.

21. The product of claim 18, wherein the interest comprises an interest in an equity security.

22. The product of claim 18, wherein the interest comprises an interest in a fixed income security.

23. The product of claim 18, wherein all terms of the second proposed trade are automatically provided for disclosure to potential counterparties over the at least one network by the at least one computer after acceptance of the first proposed trade.

24. The product of claim 18, wherein all terms of the second proposed trade are provided for disclosure to potential counterparties over the at least one network by the at least one computer after acceptance of the first proposed trade and receipt by the at least one computer over the at least one network of a given signal.

25. The product of claim 18, wherein the proposed trades are proposed sales, and the reserve price change increases the initial price.

26. The product of claim 18, wherein the proposed trades are proposed purchases, and the reserve price change decreases the initial price.

27. The product of claim 18, wherein the second quantity is equal to a preselected quantity, or if the reserve quantity is less than the preselected quantity, all of the reserve quantity.

28. The product of claim 18, further comprising:

after acceptance of the second proposed trade, the at least one computer providing for disclosure to potential counterparties over the at least one network terms of a third proposed trade of the interest the terms for the third proposed trade comprising an identification of the interest, a third price, and a third quantity, the third price being equal to the second price changed by the reserve price change, and the third quantity being not greater than the reserve quantity less the second quantity.

29. The product of claim 28, wherein the third quantity is equal to a preselected quantity, or if the quantity of reserve remaining is less than the first and second quantities, all remaining reserve quantity.

30. The product of claim 18, further comprising completing at least one of the trades.

31. The product of claim 18, wherein the interest comprises currency.

32. The product of claim 18, wherein the interest comprises an interest in a first currency and the initial price and the second price are expressed in a second currency.

33. A data processing system for trading interests over at least one network, the system comprising at least one computer and a computer program product comprising a computer readable medium having stored thereon computer code which when executed by the at least one computer causes the at least one computer to at least:

receive over the at least one network an order for an interest comprising terms for a trade of a total desired quantity of the interest, the terms comprising an identification of the interest, an initial price, an initial quantity, and a reserve quantity, the total desired quantity being equal to a sum of the initial quantity and the reserve quantity;

based on the received order, provide for disclosure to potential counterparties over the at least one network terms of a first proposed trade of the interest, the terms for the first proposed trade comprising an identification of the interest, the initial price, and the initial quantity;

after acceptance of the first proposed trade for all or part of the initial quantity, provide for disclosure to potential counterparties over the at least one network, terms of a second proposed trade of the interest the terms for a second proposed trade comprising an identification of the interest, a second price, and a second quantity, the second price being equal to the initial price changed by a reserve price change associated with the order, and the second quantity comprising at least a portion of the reserve quantity; and

prior to the acceptance of the first proposed trade, not providing for disclosure to potential counterparties over the at least one network of any portion of the reserve quantity.

34. The system of claim 33, wherein the at least one computer is caused to automatically provide for disclosure to potential counterparties over the at least one network all terms of the second proposed trade.

35. The system of claim 33, wherein the at least one computer is caused to provide for disclosure to potential counterparties over the at least one network all terms of the second proposed trade after acceptance of the first proposed trade and receipt by the at least one computer over the at least one network of a given signal.

36. The system of claim 33, wherein after acceptance of the second proposed trade, the at least one computer is caused to provide for disclosure to potential counterparties over the at least one network terms of a third proposed trade of the interest, the terms for the third proposed trade comprising an identification of the interest, a third price, and a third quantity, the third price being equal to the second price changed by the reserve price change, and the third quantity being not greater than the reserve quantity less the second quantity.

37. The system of claim 36, wherein the third quantity is equal to a preselected quantity, or if the quantity of reserve remaining is less than the first and second quantities, all remaining reserve quantity.

38. A method for electronic trading of interests over at least one network by a system including at least one computer, the method comprising:

the at least one computer providing for disclosure to potential counterparties over the at least one network a first quantity of an order of an interest at a first price, the order including a reserve quantity not provided by the at least one computer for disclosure to potential counterparties over the at least one network at least initially;

the at least one computer accepting a trade for the disclosed first quantity of the interest;

after accepting the trade, the at least one computer automatically providing for disclosure to potential counterparties over the at least one network of a quantity from the reserve quantity of the order for the interest at a price changed from the price of the quantity previously disclosed over the at least one network by a price change associated with the order.

39. The method of claim 38, comprising the at least one computer automatically providing for disclosure to potential counterparties over the at least one network the quantity from reserve and the price therefor.