Method and system for matching short trading positions with long trading positions

• US 8,234,204 B2
• Filed: 11/13/2001
• Issued: 07/31/2012
• Est. Priority Date: 11/13/2000
• Status: Expired due to Fees

• Current Assignee: Position Billboard LLC
• Original Assignee: Goldman Sachs & Company (Goldman Sachs Group Incorporated)
• Inventors: Blauvelt, Joseph P., Curialle, Frank J.
• Primary Examiner(s): Nguyen, Nga B.
• Application Number:
  US10/032,653
• Publication Number:
  US 20020091625A1
• Time in Patent Office: 3,913 Days
• Field of Search: 705/35, 705/36, 705/37, 705/38, 705/39, 705/80
• US Class Current: 705/37
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• 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
• CPC Class Codes: G06Q 50/188 Electronic negotiation

Abstract

A system and method for automatically matching short and long positions of participants and automatically generating repurchase agreements (“repo”) and reverse repurchase agreements (“reverse repo”). The system and method provide trading anonymity and various filtering options for the members.

Claims

1. A processor-implemented method for automatically identifying a counter party position for a short or long position, the method comprising:

receiving at a first terminal at least two member short positions;

receiving at the first terminal at least two member long positions;

identifying at the first terminal via a processor a selected short position from the at least two member short positions and a selected long position from the at least two member long positions, the selected short position and the selected long position having parameters associated with the positions; and

executing via the processor the transaction between the selected member long position and the selected member short position based on the parameters associated with the positions;

wherein the transaction includes a system-facilitated lending on a pro-rata basis between the selected positions if total selection member long position is greater than total selection member short position for a given financial instrument and borrowing on a pro-rata basis if total selection member short position is greater than total selection member long position for a given financial instrument.

2. A method according to claim 1, further comprising filtering the at least two short positions or the at least two long positions according to filter parameters.

3. A method according to claim 2, wherein the filter parameter is a percentage.

4. A method according to claim 2, wherein the filter parameter is a member identity.

5. A method according to claim 2, wherein the filter parameter is a limit on the number of counter parties.

6. A method according to claim 1, wherein identifying includes matching CUSIP information associated with the at least two short positions and CUSIP information associated with the at least two long positions.

7. A method according to claim 1, wherein the at least two short positions include short positions in different securities.

20. A method according to claim 1, wherein the first terminal acts as a third party participant and provides anonymity of members.

8. A medium storing computer executable instructions to perform a method for automatically identifying a counter party position for a short or long position, the method comprising:

receiving at a first terminal at least two member short positions;

receiving at the first terminal at least two member long positions;

identifying at the first terminal a selected short position from the at least two member short positions and a selected long position from the at least two member long positions, the selected short position and the selected long position having parameters associated with the positions;

executing the transaction between the selected member long position and the selected member short position based on the parameters associated with the positions;

wherein the transaction includes a system-facilitated lending on a pro-rata basis between the selected positions if total selection member long position is greater than total selection member short position for a given financial instrument and borrowing on a pro-rata basis if total selection member short position is greater than total selection member long position for a given financial instrument.

9. A computer-readable medium having computer executable instructions stored thereon, the instructions for automatically identifying a counter party position for a short or long position, the instructions comprising:

instructions to receive at a first terminal at least two member short positions;

instructions to receive at the first terminal at least two member long positions;

instructions to identify at the first terminal a selected short position from the at least two member short positions and a selected long position from the at least two member long positions, the selected short position and the selected long position having parameters associated with the positions; and

instructions to execute the transaction as between members of a membership between the selected long position and the selected short position based on the parameters associated with the positions, wherein the transaction includes a system-facilitated lending on a pro-rata basis between the selected positions if total selection member long position is greater than total selection member short position for a given financial instrument and borrowing on a pro-rata basis if total selection member short position is greater than total selection member long position for a given financial instrument.

10. An apparatus for automatically identifying a counter party position for a short or long position, comprising:

a memory having at least one region for storing computer executable instructions, and

a processor for executing the instructions stored in the memory, wherein the instructions comprise;

instructions to receive at a first terminal at least two member short positions;

instructions to receive at the first terminal at least two member long positions;

instructions to identify at the first terminal a selected short position from the at least two member short positions and a selected long position from the at least two member long positions, the selected short position and the selected long position having parameters associated with the positions; and

instructions to execute the transaction as between members of a membership between the selected long position and the selected short position based on the parameters associated with the positions wherein the transaction includes a system-facilitated lending on a pro-rata basis between the selected positions if total selection member long position is greater than total selection member short position for a given financial instrument and borrowing on a pro-rata basis if total selection member short position is greater than total selection member long position for a given financial instrument.

11. A processor-implemented method for automatically identifying a counter party position for a short or long position, the method comprising:

receiving at a first terminal at least two member short positions for securities identified by CUSIP;

receiving at the first terminal at least two member long positions for securities identified by CUSIP;

filtering the at least two short positions or the at least two long positions according to filter parameters;

identifying at the first terminal via a processor a selected short position from the at least two member short positions and a selected long position from the at least two member long positions, the selected short position and the selected long position identified by comparing and matching the CUSIP of the respective selected short and long positions; and

executing via the processor the transaction between the selected member long position and the selected member short position based on the parameters associated with the positions;

wherein the transaction includes a system-facilitated lending on a pro-rata basis between the selected positions if total selection member long position is greater than total selection member short position for a given financial instrument and borrowing on a pro-rata basis if total selection member short position is greater than total selection member long position for a given financial instrument.

12. A processor-implemented method for automatically identifying a counter party position for a short or long position, the method comprising:

identifying via a processor at least two member short positions;

sending information on the at least two member short positions to a first terminal;

receiving information on the identified positions from the first terminal to allow a transaction between a selected short position and a selected long position, the selected short position one of the at least two member short positions, wherein the selected short position is identified from the at least two member short positions and the selected long position is identified from at least two member long positions by parameters associated with the positions, and information on the at least two member long positions is sent to the first terminal; and

executing via the processor the transaction between the selected member long position and the selected member short position based on the parameters associated with the positions;

wherein the transaction includes a system-facilitated lending on a pro-rata basis between the selected positions if total selection member long position is greater than total selection member short position for a given financial instrument and borrowing on a pro-rata basis if total selection member short position is greater than total selection member long position for a given financial instrument.

13. A processor-implemented method for automatically identifying a counter party position for a short or long position, the method comprising:

identifying via a processor at least two member long positions;

sending information on the at least two member long positions to a first terminal;

receiving information on the identified positions from the first terminal to allow a transaction between a selected long position and a selected short position, the selected long position one of the at least two member long positions, wherein the selected long position is identified from the at least two member long positions and the selected short position is identified from at least two member short positions by parameters associated with the positions, and information on the at least two member short positions is sent to the first terminal; and

executing via the processor the transaction between the selected long position and the selected short position based on the parameters associated with the positions;

wherein the transaction includes a system-facilitated lending on a pro-rata basis between the selected positions if total selection member long position is greater than total selection member short position for a given financial instrument and borrowing on a pro-rata basis if total selection member short position is greater than total selection member long position for a given financial instrument.

14. A processor-implemented method for automatically identifying a counter party position for a short or long position, the method comprising:

receiving at a first terminal at least two member short positions from one or more short position parties, wherein said short position parties have authorized a third party agent to act as a counterparty to each of said short position party'"'"'s on-side transactions;

receiving at said first terminal at least two member long positions from one or more long position parties, wherein said long position parties have authorized said third party agent to act as a counterparty to each of said long position party'"'"'s on-side transactions;

identifying at said first terminal via a processor a selected short position from said at least two member short positions and a selected long position from said at least two member long positions, said selected short position and said selected long position identified by parameters associated with said positions; and

executing via the processor the transaction between the selected member long position and the selected member short position based on the parameters associated with the positions;

wherein the transaction includes a system-facilitated lending on a pro-rata basis between the selected positions if total selection member long position is greater than total selection member short position for a given financial instrument and borrowing on a pro-rata basis if total selection member short position is greater than total selection member long position for a given financial instrument.

15. A method according to claim 14, further comprising filtering said at least two short positions or said at least two long positions according to filter parameters.

16. A method according to claim 15, wherein said filter parameter is a percentage.

17. A method according to claim 15, wherein said filter parameter is a member identity.

18. A method according to claim 15, wherein said filter parameter is a limit on the number of counter parties and wherein said at least two short positions include short positions in different securities.

19. A method according to claim 14, wherein identifying includes matching CUSIP information associated with said at least two short positions and CUSIP information associated with said at least two long positions.

21. A method according to claim 15, wherein the filtering parameters are specified by a member.