Systems and methods for establishing first on the follow trading priority in electronic trading systems

• US 8,117,109 B2
• Filed: 01/09/2007
• Issued: 02/14/2012
• Est. Priority Date: 01/09/2006
• Status: Active Grant

• Current Assignee: BGC Partners Incorporated (BGC Group, Inc.)
• Original Assignee: BGC Partners Incorporated (BGC Group, Inc.)
• Inventors: Lutnick, Howard W., Noviello, Joseph C., Sweeting, Michael
• Primary Examiner(s): Kyle, Charles R
• Assistant Examiner(s): Wood, David L
• Application Number:
  US11/621,546
• Publication Number:
  US 20070244795A1
• Time in Patent Office: 1,862 Days
• Field of Search: 705/37
• 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 trading system transitions from a first state to a second state and may award a participant, when one or more criteria and/or a status of trading rights are met, with trading priority in the second state to trade on an incoming contra order. The participant may also have an associated order modified as a result of an incoming contra order and/or be caused to automatically trade on an incoming contra order.

Claims

1. A method, comprising:

transitioning, by at least one processor of at least one computing device, an electronic trading system from a first trading state to a second trading state;

determining, by the at least one processor, from among a plurality of bids that are pending at a completion of the first trading state, a best bid,

wherein the best bid comprises a bid having a best price from among the plurality of bids, and

wherein the best bid is associated with a participant;

determining, by the at least one processor, that the participant associated with the best bid purchased at least a minimum size in the first trading state;

based at least in part on (i) determining the best bid and (ii) determining that the participant associated with the best bid purchased at least the minimum size in the first trading state, awarding, by the at least one processor, the participant with a potential right to trade exclusively against at least one offer received in the second trading state;

receiving, by the at least one processor, an offer in the second trading state;

based at least in part on awarding the participant with the potential right to trade exclusively, determining, by the at least one processor, that the participant has a right to trade exclusively against the offer;

based at least in part on determining that the participant has the fight to trade exclusively against the offer, presenting, by the at least one processor, the offer exclusively to the participant;

determining, by the at least one processor, that a different participant indicates a willingness to trade against the offer; and

based at least in part on (i) determining that the participant has the right to trade exclusively against the offer and (ii) determining that the different participant indicates the willingness to trade against the offer, automatically causing, by the at least one processor, the participant to trade against the offer.

2. The method of claim 1, wherein determining that the different participant indicates the willingness to trade against the offer comprises:

determining, by the at least one processor, that the different participant has a bid among the plurality of bids that are pending at a completion of the first trading state.

3. The method of claim 1, further comprising:

determining, by the at least one processor, that a size of the best bid satisfies a further minimum size;

and

wherein awarding the participant with the potential right to trade exclusively comprises;

awarding, by the at least one processor, the participant with the potential right to trade exclusively based at least in part on determining that the size of the best bid satisfies the further minimum size.

4. The method of claim 1, further comprising:

determining, by the at least one processor, that a size of the best bid exceeds a predetermined percentage of a size of the offer;

and

wherein determining that the participant has the right to trade exclusively against the offer comprises;

determining, by the at least one processor, that the participant has the right to trade exclusively against the offer based at least in part on determining that the size of the best bid exceeds the predetermined percentage of the size of the offer.

5. The method of claim 1, further comprising:

determining, by the at least one processor, that a difference between a price of the best bid and a price of the offer is within a predetermined delta;

and

wherein determining that the participant has the right to trade exclusively against the offer comprises;

determining, by the at least one processor, that the participant has the right to trade exclusively against the offer based at least in part on determining that the difference between the price of the best bid and the price of the offer is within the predetermined delta.

6. The method of claim 1, further comprising:

determining, by the at least one processor, that a size of the offer satisfies a further minimum size;

and

wherein determining that the participant has the fight to trade exclusively against the offer comprises;

determining, by the at least one processor, that the participant has the right to trade exclusively against the offer based at least in part on determining that the size of the offer satisfies the further minimum size.

7. The method of claim 1, further comprising:

determining, by the at least one processor, that a price of the best bid satisfies a price criterion with respect to a price of a trade made in the first state;

and

wherein awarding the participant with the potential right to trade exclusively further comprises;

awarding, by the at least one processor, the participant with the potential right to trade exclusively based at least in part on determining that the price of the best bid satisfies the price criterion with respect to the price of the trade made in the first state.

8. The method of claim 7, wherein the price criterion comprises the price of the best bid being within a predetermined delta of the price of the trade made in the first state.

9. The method of claim 1, further comprising:

determining, by the at least one processor, that a size of the offer exceeds a predetermined percentage of a size of the best bid;

and

wherein determining that the participant has the fight to trade exclusively against the offer comprises;

determining, by the at least one processor, that the participant has the right to trade exclusively against the offer based at least in part on determining that the size of the offer exceeds the predetermined percentage of the size of the best bid.

10. The method of claim 1, further comprising:

based at least in part on awarding the participant with the potential fight to trade exclusively, modifying, by the at least one processor, the best bid, wherein modifying the best bid does not affect the potential right to trade exclusively of the participant.

11. The method of claim 10, wherein modifying the best bid comprises at least one of:

reducing, by the at least one processor, a size of the best bid, and

decreasing, by the at least one processor, a price of the best bid.

12. The method of claim 10, wherein modifying the best bid comprises:

removing, by the at least one processor, the best bid.

13. The method of claim 1, wherein presenting the offer exclusively to the participant comprises at least one of:

causing, by the at least one processor, the offer to be shown only to the participant; and

making, by the at least one processor, the offer available to be traded against only by the participant.

14. The method of claim 1, further comprising:

determining that the offer has at least one of a best price and a time priority from among a plurality of offers pending in the second trading state;

and

wherein determining that the participant has the fight to trade exclusively against the offer comprises;

determining, by the at least one processor, that the participant has the right to trade exclusively against the offer based at least in part on determining that the offer has at least one of the best price and the time priority from among the plurality of offers pending in the second trading state.

15. The method of claim 1, further comprising:

determining, by the at least one processor, from among a plurality of offers that are pending at the completion of the first trading state, a best offer,

wherein the best offer comprises an offer having a best price from among the plurality of offers, and

wherein the best offer is associated with another participant;

determining, by the at least one processor, that the another participant associated with the best offer sold at least a second minimum size in the first trading state; and

based at least in part on (i) determining the best offer and (ii) determining that the another participant associated with the best offer sold at least the second minimum size in the first trading state, awarding, by the at least one processor, the another participant with a potential right to trade exclusively against at least one bid received in the second trading state.

16. The method of claim 15, further comprising:

based at least in part on awarding the another participant with the potential right to trade exclusively against the at least one bid received in the second trading state, modifying, by the at least one processor, the best offer,

wherein modifying the best offer does not affect the potential right to trade exclusively of the another participant, and

wherein modifying the best offer comprises at least one of;

reducing, by the at least one processor, a size of the best offer, and

increasing, by the at least one processor, a price of the best offer, and

removing, by the at least one processor, the best offer.

17. The method of claim 1, further comprising:

based at least in part on determining that the participant has the right to trade exclusively against the offer, modifying, by the at least one processor, the best bid.

18. The method of claim 17, wherein modifying the best bid comprises at least one of:

reducing, by the at least one processor, a size of the best bid, and

decreasing, by the at least one processor, a price of the best bid.

19. The method of claim 17, wherein modifying the best bid comprises:

removing, by the at least one processor, the best bid.

20. The method of claim 1, wherein the second minimum size is equal to the minimum size.

21. An apparatus:

comprising;

at least one processor; and

at least one memory device electronically coupled to the at least one processor, wherein the at least one memory device stores instructions which, when executed by the at least one processor, direct the at least one processor to;

transition an electronic trading system from a first trading state to a second trading state,

determine, from among a plurality of bids that are pending at a completion of the first trading state, a best bid,

wherein the best bid comprises a bid having a best price from among the plurality of bids having a best price, and

wherein the best bid is associated with a participant;

determine that the participant associated with the best bid purchased at least a minimum size in the first trading state;

based at least in part on (i) determining the best bid and (ii) determining that the participant associated with the best bid purchased at least the minimum size in the first trading state, award the participant with a potential fight to trade exclusively against at least one offer received in the second trading state;

receive an offer in the second trading state,

based at least in part on awarding the participant with the potential right to trade exclusively, determine that the participant has a fight to trade exclusively against the offer;

based at least in part on determining that the participant has the fight to trade exclusively against the offer, present the offer exclusively to the participant;

determine that a different participant indicates a willingness to trade against the offer; and

based at least in part on (i) determining that the participant has the right to trade exclusively against the offer and (ii) determining that the different participant indicates the willingness to trade against the offer, automatically causing the participant to trade against the offer.

22. The apparatus of claim 21, wherein presenting the offer exclusively to the participant comprises at least one of:

causing the offer to be shown only to the participant; and

making the offer available to be traded against only by the participant.

23. The apparatus of claim 21, wherein the instructions, when executed by the at least one processor, further direct the at least one processor to:

determine that the offer has at least one of a best price and a time priority from among a plurality of offers pending in the second trading state;

and

wherein determining that the participant has the fight to trade exclusively against the offer comprises;

determining that the participant has the right to trade exclusively against the offer based at least in part on determining that the offer has at least one of the best price and the time priority from among the plurality of offers pending in the second trading state.

24. The apparatus of claim 21, wherein the instructions, when executed by the at least one processor, further direct the at least one processor to:

determine, from among a plurality of offers that are pending at the completion of the first trading state, a best offer,

wherein the best offer comprises an offer having a best price from among the plurality of offers, and

wherein the best offer is associated with another participant;

determine that the another participant associated with the best offer sold at least a second minimum size in the first trading state; and

based at least in part on (i) determining the best offer and (ii) determining that the another participant associated with the best offer sold at least the second minimum size in the first trading state, award the another participant with a potential right to trade exclusively against at least one bid received in the second trading state.

25. The apparatus of claim 24, wherein the instructions, when executed by the at least one processor, further direct the at least one processor to:

based at least in part on awarding the another participant with the potential right to trade exclusively against the at least one bid received in the second trading state, modify the best offer,

wherein modifying the best offer does not affect the potential right to trade exclusively of the another participant, and

wherein modifying the best offer comprises at least one of;

reducing a size of the best offer, and

increasing a price of the best offer, and

removing the best offer.

26. The apparatus of claim 21, wherein wherein determining that the different participant indicates the willingness to trade against the offer comprises:

determining, by the at least one processor, that the different participant has a bid among the plurality of bids that are pending at a completion of the first trading state.

27. The apparatus of claim 21, wherein the instructions, when executed by the at least one processor, further direct the at least one processor to:

determine that a size of the best bid satisfies a further minimum size,

and

wherein awarding the participant with the potential right to trade exclusively comprises;

awarding the participant with the potential right to trade exclusively based at least in part on determining that the size of the best bid satisfies the further minimum size.

28. The apparatus of claim 21, wherein the instructions, when executed by the at least one processor, further direct the at least one processor to:

determine that a size of the best bid exceeds a predetermined percentage of a size of the offer;

and

wherein determining that the participant has the fight to trade exclusively against the offer comprises;

determining that the participant has the right to trade exclusively against the offer based at least in part on determining that the size of the best bid exceeds the predetermined percentage of the size of the offer.

29. The apparatus of claim 21, wherein the instructions, when executed by the at least one processor, further direct the at least one processor to:

determine that a difference between a price of the best bid and a price of the offer is within a predetermined delta;

and

wherein determining that the participant has the fight to trade exclusively against the offer comprises;

determining that the participant has the right to trade exclusively against the offer based at least in part on determining that the difference between the price of the best bid and the price of the offer is within the predetermined delta.

30. The apparatus of claim 21, wherein the instructions, when executed by the at least one processor, further direct the at least one processor to:

determine that a size of the offer satisfies a further minimum size;

and

wherein determining that the participant has the right to trade exclusively against the offer comprises;

determining that the participant has the right to trade exclusively against the offer based at least in part on determining that the size of the offer satisfies the further minimum size.

31. The apparatus of claim 21, wherein the instructions, when executed by the at least one processor, further direct the at least one processor to:

determine that a size of the offer exceeds a predetermined percentage of a size of the best bid;

and

wherein determining that the participant has the right to trade exclusively against the offer comprises;

determining that the participant has the right to trade exclusively against the offer based at least in part on determining that the size of the offer exceeds the predetermined percentage of the size of the best bid.

32. The apparatus of claim 21, wherein the instructions, when executed by the at least one processor, further direct the at least one processor to:

determine that a price of the best bid is within a predetermined delta of a price of a trade made in the first state;

and

wherein awarding the participant with the potential right to trade exclusively further comprises;

awarding the participant with the potential right to trade exclusively based at least in part on determining that the price of the best bid is within the predetermined delta of the price of the trade made in the first state.

33. The apparatus of claim 21, wherein the instructions, when executed by the at least one processor, further direct the at least one processor to:

based at least in part on determining that the participant has the right to trade exclusively against the offer, modify the best bid.

34. The apparatus of claim 33, wherein modifying the best bid comprises at least one of:

reducing a size of the best bid, and

decreasing a price of the best bid.

35. The apparatus of claim 33, wherein modifying the best bid comprises:

removing the best bid.

36. The apparatus of claim 21, wherein the instructions, when executed by the at least one processor, further direct the at least one processor to:

based at least in part on awarding the participant with the potential right to trade exclusively, modify the best bid, wherein modifying the best bid does not affect the potential right to trade exclusively of the participant.

37. The apparatus of claim 36, wherein modifying the best bid comprises at least one of:

reducing a size of the best bid, and

decreasing a price of the best bid.

38. The apparatus of claim 36, wherein modifying the best bid comprises:

removing the best bid.

39. The apparatus of claim 21, wherein the second minimum size is equal to the minimum size.

40. A computer readable medium comprising a program that, when executed by at least one computing device, directs the at least one computing device to:

transition an electronic trading system from a first trading state to a second trading state,

determine, from among a plurality of bids that are pending at a completion of the first trading state, a best bid,

wherein the best bid comprises a bid having a best price from among the plurality of bids, and

wherein the best bid is associated with a participant;

determine that the participant associated with the best bid purchased at least a minimum size in the first trading state;

based at least in part on (i) determining the best bid and (ii) determining that the participant associated with the best bid purchased at least the minimum size in the first trading state, award the participant with a potential fight to trade exclusively against at least one offer received in the second trading state;

receive an offer in the second trading state,

based at least in part on awarding the participant with the potential fight to trade exclusively, determine that the participant has a right to trade exclusively against the offer;

based at least in part on determining that the participant has the fight to trade exclusively against the offer, present the offer exclusively to the participant;

determine that a different participant indicates a willingness to trade against the offer; and

based at least in part on (i) determining that the participant has the right to trade exclusively against the offer and (ii) determining that the different participant indicates the willingness to trade against the offer, automatically causing the participant to trade against the offer.

41. The computer readable medium of claim 40, wherein determining that the different participant indicates the willingness to trade against the offer comprises:

determining that the different participant has a bid among the plurality of bids that are pending at a completion of the first trading state.

42. The computer readable medium of claim 40, wherein the instructions, when executed by the at least one computing device, further direct the at least one computing device to:

determine that the offer has at least one of a best price and a time priority from among a plurality of offers pending in the second trading state;

and

wherein determining that the participant has the fight to trade exclusively against the offer comprises;

determining that the participant has the right to trade exclusively against the offer based at least in part on determining that the offer has at least one of the best price and the time priority from among the plurality of offers pending in the bid/offer second trading state.

43. The computer readable medium of claim 40, wherein the instructions, when executed by the at least one computing device, further direct the at least one computing device to:

determine, from among a plurality of offers that are pending at the completion of the first trading state, a best offer,

wherein the best offer comprises an offer having a best price from among the plurality of offers, and

wherein the best offer is associated with another participant;

determine that the another participant associated with the best offer sold at least a second minimum size in the first trading state; and

based at least in part on (i) determining the best offer and (ii) determining that the another participant associated with the best offer sold at least the second minimum size in the first trading state, award the another participant with a potential right to trade exclusively against at least one bid received in the second trading state.

44. The computer readable medium of claim 43, wherein the instructions, when executed by the at least one computing device, further direct the at least one computing device to:

based at least in part on awarding the another participant with the potential right to trade exclusively against the at least one bid received in the second trading state, modify the best offer,

wherein modifying the best offer does not affect the potential right to trade exclusively of the another participant, and

wherein modifying the best offer comprises at least one of;

reducing a size of the best offer, and

increasing a price of the best offer, and

removing the best offer.

45. The computer readable medium of claim 40, wherein the instructions, when executed by the at least one computing device, further direct the at least one computing device to:

determine that a size of the best bid satisfies a further minimum size;

and

wherein awarding the participant with the potential right to trade exclusively comprises;

awarding the participant with the potential right to trade exclusively based at least in part on determining that the size of the best bid satisfies the further minimum size.

46. The computer readable medium of claim 40, wherein the instructions, when executed by the at least one computing device, further direct the at least one computing device to:

determine that a size of the best bid exceeds a predetermined percentage of a size of the offer;

and

wherein determining that the participant has the fight to trade exclusively against the offer comprises;

determining that the participant has the right to trade exclusively against the offer based at least in part on determining that the size of the best bid exceeds the predetermined percentage of the size of the offer.

47. The computer readable medium of claim 40, wherein the instructions, when executed by the at least one computing device, further direct the at least one computing device to:

determine that a difference between a price of the best bid and a price of the offer is within a predetermined delta;

and

wherein determining that the participant has the fight to trade exclusively against the offer comprises;

determining that the participant has the right to trade exclusively against the offer based at least in part on determining that the difference between the price of the best bid and the price of the offer is within the predetermined delta.

48. The computer readable medium of claim 40, wherein the instructions, when executed by the at least one computing device, further direct the at least one computing device to:

determine that a size of the offer satisfies a further minimum size;

and

wherein determining that the participant has the right to trade exclusively against the offer comprises;

determining that the participant has the right to trade exclusively against the offer based at least in part on determining that the size of the offer satisfies the further minimum size.

49. The computer readable medium of claim 40, wherein the instructions, when executed by the at least one computing device, further direct the at least one computing device to:

determine that a size of the offer exceeds a predetermined percentage of a size of the best bid;

and

wherein determining that the participant has the right to trade exclusively against the offer comprises;

determining that the participant has the right to trade exclusively against the offer based at least in part on determining that the size of the offer exceeds the predetermined percentage of the size of the best bid.

50. The computer readable medium of claim 40, wherein the instructions, when executed by the at least one computing device, further direct the at least one computing device to:

determine that a price of the best bid is within a predetermined delta of a price of a trade made in the first state;

and

wherein awarding the participant with the potential right to trade exclusively further comprises;

awarding the participant with the potential right to trade exclusively based at least in part on determining that the price of the best bid is within the predetermined delta of the price of the trade made in the first state.

51. The computer readable medium of claim 40, wherein the instructions, when executed by the at least one computing device, further direct the at least one computing device to:

based at least in part on determining that the participant has the right to trade exclusively against the offer, modify the best bid.

52. The computer readable medium of claim 51, wherein modifying the best bid comprises at least one of:

reducing a size of the best bid, and

decreasing a price of the best bid.

53. The computer readable medium of claim 51, wherein modifying the best bid comprises:

removing the best bid.

54. The computer readable medium of claim 40, wherein the instructions, when executed by the at least one computing device, further direct the at least one computing device to:

based at least in part on awarding the participant with the potential right to trade exclusively, modify the best bid, wherein modifying the best bid does not affect the potential right to trade exclusively of the participant.

55. The computer readable medium of claim 54, wherein modify modifying the best bid comprises at least one of:

reducing a size of the best bid, and

decreasing a price of the best bid.

56. The computer readable medium of claim 54, wherein modifying the best bid comprises:

removing the best bid.

57. The computer readable medium of claim 40, wherein the second minimum size is equal to the minimum size.