Method for directing and executing certified trading interests

• US 7,908,205 B2
• Filed: 07/17/2008
• Issued: 03/15/2011
• 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, Angel, James J.
• Primary Examiner(s): PATEL, JAGDISH
• Application Number:
  US12/219,158
• Publication Number:
  US 20090018971A1
• Time in Patent Office: 971 Days
• Field of Search: 705/35, 705/37
• US Class Current: 705/37
• CPC Class Codes: G06Q 30/0601 Electronic shopping [e-shopping]
• CPC Class Codes: G06Q 30/0633 Lists, e.g. purchase orders, compilation or processing
• 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

Preferred embodiments of the subject invention comprise: (a) electronically receiving securities order-related data regarding a set of securities market participants; (b) electronically storing the received order-related data regarding the set of securities market participants; (c) electronically receiving a securities order-related query (or order parameters) from a first securities market participant; (d) based on the order-related query (or order parameters) received from the first securities market participant and on the securities order-related data regarding the set of securities market participants, computing a dissemination list of securities market participants based on ranking likely contras by probability of execution; and (e) transmitting that dissemination list to an entity who has been granted the privilege of receiving such lists in exchange for being contractually bound to respect confidentiality of the dissemination list and to use the list only for the purpose of sending securities-related information to members of the list.

Claims

1. A method of managing orders in a securities market, comprising the steps of:

(a) electronically receiving data comprising a first preferenced order, a referencing ID, and conditions thereon from a first market participant, wherein said first preferenced order is directed to said referencing ID;

(b) electronically storing said received data in a database;

(c) electronically receiving and storing in said database data comprising orders from other market participants, said database also containing trade behavior data regarding said other market participants;

(d) searching with a first processor said database for orders placed by said other market participants that satisfy said conditions on said order from said first market participant;

(e) ranking with a second processor market participants whose orders have been searched and determined to satisfy said conditions, said ranking based on a calculation of likelihood of market participants to place an order contra to said first preferenced order, said calculation based in turn on said market participant trade behavior data; and

(f) sending a second preferenced order to a second market participant with a ranking corresponding to a high likelihood of placing an order contra to said first preferenced order;

wherein if said second market participant accepts said second preferenced order, an attempt is made to execute said first preferenced order and said second preferenced order as a two-part trade, where either both orders execute or neither does, and

wherein said first and second processors may be the same processor or distinct processors.

2. A method according to claim 1, wherein the transactional integrity of the two-part trade is ensured by altering the normal processing and execution of said second preferenced order so that the execution does not take effect until said first preferenced order can be made non-cancelable.

3. A method according to claim 2, wherein said first preferenced order is made non-cancelable by setting said first preferenced order'"'"'s status internally to an “

executed”

status.

4. A method according to claim 1, wherein transactional integrity of the two-part trade is ensured by issuing a single report for clearing that contains the identities of the first and second participants as true parties to the trade.

5. A method according to claim 1, wherein an execution message received from said second market participant does not trigger an execution confirm message.

6. A method according to claim 5, wherein only an execution message notifying said referencing ID of execution by said second market participant is allowed to proceed.

7. A method according to claim 1, wherein said first market participant and said second market participant discover each other'"'"'s identities after execution.

8. A method according to claim 1, wherein said first market participant and said second market participant discover each other'"'"'s identities after close of a normal trading session.

9. A method according to claim 1, wherein said step of attempting to execute said first preferenced order against said second preferenced order comprises modifying the execution price to the midpoint of the first and second orders.

10. A method according to claim 1, wherein said first preferenced order may include additional size that is not routed to said second participant, but may be executed against a counteroffer from said second participant.

11. A method according to claim 1, wherein said first market participant is an auction server, and wherein said first preferenced order is passive enough to be considered a targeted request for quotation.