Network and method for trading derivatives

• US 8,484,103 B2
• Filed: 04/06/2010
• Issued: 07/09/2013
• Est. Priority Date: 10/30/2000
• Status: Expired due to Term

• Current Assignee: Chicago Mercantile Exchange, Inc. (CME Group Incorporated)
• Original Assignee: Chicago Mercantile Exchange, Inc. (CME Group Incorporated)
• Inventors: Brady, Neal, Carey, Noah, Erwin, William R., Gilmore, John, Quattrocki, Michael, Stone, Frank, Thornburgh, Mark
• Primary Examiner(s): Poinvil, Frantzy
• Application Number:
  US12/754,901
• Publication Number:
  US 20100191643A1
• Time in Patent Office: 1,190 Days
• Field of Search: 705 10- 44
• US Class Current: 705/30
• 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 40/12 Accounting

Abstract

A computer network and method for electronically trading derivatives. The system includes networks and methods where a control or network managing station in the network acts as a facilitator for the market makers and subscribers to make a trade at an Exchange. In another embodiment the network managing station consummates the trade between a market maker and a subscriber by matching binding quotes and orders and clears the trade at an Exchange. The computer network for electronically trading derivative comprises: (a) network managing station; (b) one or more market maker stations; (c) one or more subscriber stations; (d) one or more Exchanges. The network managing station connects market makers and subscribers for making real time indicative quotes, issuing requests for quotes, obtaining binding quotes and wherein the market maker and subscriber are in communication with an Exchange for sending binding quotes and orders to the Exchange for clearing and confirming transactions.

Claims

1. A server for facilitating trading derivatives over a network, the server being coupled with a network and comprising:

means for receiving, by the server, a request for an indicative quote from a requestor, for at least one product of a plurality of products from a particular responder station of a plurality of responder stations;

means for transmitting the request for indicative quote, by the server, to the particular responder station of the plurality of responder stations;

means for receiving, by the server, a request for binding quote from said requestor, for at least one product of said plurality of products from said particular responder station of the plurality of responder stations;

means for transmitting the request for binding quote, by the server, to the particular responder station of the plurality of responder stations;

whereby the requestor may cause transmission of the request for indicative quote for the at least one product via a computer network system to the particular responder station of the plurality of responder stations, a remaining of the plurality of responder stations not receiving the request for indicative quote;

means for receiving, by the server, the indicative quote in response to the request for indicative quote, from the particular responder station for only the at least one product and subsequently receiving a subsequent indicative quote superseding a previous indicative quote;

means for transmitting the indicative quote, by the server, to the requestor, and subsequently transmitting the subsequent indicative quote superseding the previous indicative quote;

means for receiving, by the server, said binding quote in response to the request for binding quote, from the particular responder station for only the at least one product; and

means for transmitting the binding quote for only the at least one product, by the server, to the requestor.

2. The server of claim 1 wherein the subsequent indicative quote is different than the previous indicative quote.

3. The server of claim 1 wherein the particular responder station provides the subsequent indicative quote upon the elapse of a period of time.

4. The server of claim 1 wherein the particular responder station provides the subsequent indicative quote based on the occurrence of an event.

5. The server of claim 1, further comprising means for indicating a plurality of products for which a responder associated with the particular responder station is interested in quoting.

6. The server of claim 1, wherein the identity of the particular responder station and requestor are substantially anonymous.

7. The server of claim 1, further comprises means for polling a plurality of responder stations, each associated with a different responder possibly interested in quoting for the at least one product and evaluating responses thereto.

8. The server of claim 1, further comprising:

means for storing a record of the request for indicative quote and the request for binding quote generated by the requestor in an audit database; and

means for monitoring the network for requests for indicative quotes, requests for binding quotes, indicative quotes and binding quotes, and updating the audit database based thereon.

9. The server of claim 1, further comprising:

means for receiving at least one of the binding quote from the at least one responder station and transmit an order based thereon via the network to an exchange for clearing and confirmation; and

wherein the server further comprises;

means for receiving the order via the network for clearing and confirmation.

10. A method for trading derivatives, the method comprising:

receiving, by a computer, a request for an indicative quote from a requestor, for at least one product of a plurality of products from a particular responder station of a plurality of responder stations;

transmitting the request for said indicative quote, by the computer, to the particular responder station of the plurality of responder stations;

receiving, by the computer, a request for binding quote from a requestor, for at least one product of the plurality of products from a particular responder station of the plurality of responder stations;

transmitting the request for a binding quote, by the computer, to the particular responder station of the plurality of responder stations;

whereby the requestor may cause transmission of the request for said indicative quote for the at least one product via a computer network system to the particular responder station of the plurality of responder stations, the remaining of the plurality of responder stations not receiving the request for indicative quote;

receiving, by the computer, an indicative quote in response to the request for indicative quote, from the particular responder station for only the at least one product and subsequently receiving a subsequent indicative quote superseding a previous indicative quote;

transmitting the indicative quote, by the computer, to the requestor, and subsequently transmitting the subsequent indicative quote superseding the previous indicative quote;

receiving, by the computer, a binding quote in response to the request for binding quote, from the particular responder station for only the at least one product; and

transmitting the binding quote for only the at least one product, by the computer, to the requestor.

11. The method of claim 10 wherein the subsequent indicative quote is different than the previous indicative quote.

12. The method of claim 10 wherein the particular responder station provides the subsequent indicative quote upon the elapse of a period of time.

13. The method of claim 10 wherein the particular responder station provides the subsequent indicative quote based on the occurrence of an event.

14. The method of claim 13 wherein the event comprises a change in the market for the at least one product.

15. The method of claim 10, further comprising indicating a plurality of products for which the responder associated with the particular responder station is interested in quoting.

16. The method of claim 10, wherein the identity of the particular responder station and requestor are substantially anonymous.

17. The method of claim 10, further comprises polling a plurality of responder stations, each associated with a different responder possibly interested in quoting for the at least one product and evaluating responses thereto.

18. The method of claim 10, further comprising:

storing a record of the request for indicative quote and the request for binding quote generated by the requestor in an audit database; and

monitoring the network for requests for indicative quotes, requests for binding quotes, indicative quotes and binding quotes, and updating the audit database based thereon.

19. The method of claim 10, further comprising:

receiving at least one of the binding quote from the at least one responder station and transmit an order based thereon via the network to an exchange for clearing and confirmation; and

wherein the server further comprises;

receiving the order via the network for clearing and confirmation.

20. A system for trading derivatives, the system comprising:

a network;

a network managing station coupled with the network and operative to receive a request for an indicative quote from a requestor, via the network, for at least one product of a plurality of products from a particular responder station of a plurality of responder stations, transmit the request for said indicative quote, via the network, to the particular responder station of the plurality of responder stations, receive, via the network, a request for a binding quote from a requestor, for at least one product of said plurality of products from a particular responder station of the plurality of responder stations, and transmit the request for a binding quote, via the network, to the particular responder station of the plurality of responder stations;

whereby the requestor may cause transmission of the request for for indicative quote for the at least one product via the network to the particular responder station of the plurality of responder stations, said remaining of the plurality of responder stations not receiving the request for said indicative quote;

the network managing station being further operative to receive, via the network, the indicative quote in response to the request for indicative quote, from the particular responder station for only the at least one product and subsequently receiving a subsequent indicative quote superseding a previous indicative quote, transmit the indicative quote, via the network, to the requestor, and subsequently transmit the subsequent indicative quote superseding the previous indicative quote, receive, via the network, a binding quote in response to the request for binding quote, from the particular responder station for only the at least one product, and transmit the binding quote for only the at least one product, via the network, to the requestor.