Electronic trading for principal/broker trading

• US 8,494,949 B2
• Filed: 01/14/2002
• Issued: 07/23/2013
• Est. Priority Date: 06/01/2001
• Status: Active Grant

• Current Assignee: BGC Partners Incorporated (BGC Group, Inc.)
• Original Assignee: BGC Partners Incorporated (BGC Group, Inc.)
• Inventors: Gilbert, Andrew C., Stergiopoulos, Andrew, Tselepis, William P.
• Primary Examiner(s): JOHNSON, GREGORY L
• Application Number:
  US10/047,607
• Publication Number:
  US 20030088499A1
• Time in Patent Office: 4,208 Days
• Field of Search: 705 30- 39
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

Electronic trading systems and methods which facilitate principal/broker trading are provided. In a first aspect of the invention, a database relating to trading participants in the trading system is designed to indicate which traders utilize a principal/broker relationship and what, if any, limitations are placed on the activity of the broker, trading commands submitted by the broker, and counterparties in a transaction with the broker. In another aspect of the invention, trading commands and executed trades involving principals/brokers may be presented to other traders using special designations. The ability to enter certain trading commands by, and in response to, brokers may be limited. In a further aspect of the invention, anonymous trading features may prevent traders from knowing whether another trader is a broker or principal, may restrict traders from being able to block trading with brokers, and may permit brokers to configure anonymous trading parameters.

Claims

1. A method, comprising the steps of:

receiving computer data signals conveying two passive orders for proposed transactions to be mediated with assistance of an electronic trading system, stored data for the orders indicating that a first of the two passive orders is entered with authority of a principal of the principal'"'"'s real party in interest, and the stored data indicating that a second of the two passive orders is entered with authority of a broker acting on behalf of the broker'"'"'s real party in interest; and

electronically determining presentation of the first and second passive orders to a prospective aggressor counterparty, a difference between the determined presentation of the two passive orders to the prospective aggressor counterparty being based at least in part on the stored indication of principal vs, broker authority, and indicating to the prospective aggressor counterparty the respective principal and broker authorities of the two respective passive orders.

2. The method of claim 1, further comprising:

preventing the prospective aggressor counterparty from acting on at least one of the passive trading orders based at least in part on a determination that the prospective aggressor is acting with the authority of a broker.

3. The method of claim 2, wherein:

preventing the prospective aggressor from acting on the passive trading order is executed by blocking a trading command from the prospective aggressor so that the aggressor'"'"'s trading command does not form part of a trade.

4. The method of claim 1, further comprising the step of:

preventing the prospective aggressor counterparty from acting on the second passive order based at least in part on the broker authority of the second passive order.

5. The method of claim 1, wherein:

the difference between the determined presentation includes presenting one of the two passive orders to the prospective aggressor counterparty, and blocking presentation of the other passive order.

6. The method of claim 5, wherein:

the difference between the determined presentation includes presenting the principal'"'"'s passive order to the prospective aggressor counterparty, and blocking presentation of the broker'"'"'s passive order.

7. The method of claim 1, wherein:

the difference between the determined presentation includes presenting the principal'"'"'s passive order to the prospective aggressor counterparty, and blocking presentation of the broker'"'"'s passive order.

8. The method of claim 1, wherein:

the determined presentation is further based at least in part on an comparison of the presented passive order to a warning limit between the prospective aggressor counterparty and the real party in interest associated with the passive order.

9. The method of claim 1, wherein:

the presentation to the prospective aggressor counterparty is by means of a display screen.

10. The method of claim 9, wherein:

the difference between the determined presentations of the two passive orders to the prospective aggressor counterparty includes different visual attributes.

11. The method of claim 10, wherein:

different visual attributes include one or more of using different colors, using different fonts, or using flashing.

12. The system of claim 9, wherein:

the difference between the determined presentations of the two passive orders to the prospective aggressor counterparty includes indicating that one of the two passive orders is not available to be traded by the prospective aggressor counterparty.

13. The method of claim 12, wherein:

the principal'"'"'s passive order is presented as tradeable to the prospective aggressor counterparty, and the broker'"'"'s passive order is presented as non-tradeable to the prospective aggressor counterparty.

14. The method of claim 1, wherein:

the difference between the determined presentations of the two passive orders to the prospective aggressor counterparty is further based at least in part on a status of the prospective aggressor counterparty as principal or broker.

15. The method of claim 1, further comprising:

determining authority to complete a trade based at least in part on a status as principal or broker of the party that entered a one of the passive orders.

16. The method of claim 1, further comprising:

maintaining the identity of the real party in interest associated with a one of the passive orders and the identity of the prospective aggressor counterparty anonymous to each other.

17. The method of claim 1, further comprising:

revealing the identity of the real party in interest associated with a one of the passive orders and the identity of the prospective aggressor counterparty to each other before executing a trade between the one of the passive orders and the aggressive counterparty.

18. The method of claim 1, further comprising:

automatically executing the full value of a one of the passive orders based at least in part on a status as principal or broker of the party that entered the passive order to be automatically executed.

19. The method of claim 1, further comprising:

automatically executing a part of the value of a one of the passive orders based at least in part on a status as principal or broker of the party that entered the passive order to be automatically executed.

20. The method of claim 1, further comprising:

automatically executing the full value of a one of the passive orders based at least in part on a status as principal or broker of the prospective aggressor counterparty.

21. The method of claim 1, further comprising:

automatically executing a part of the value of a one of the passive orders based at least in part on a status as principal or broker of the prospective aggressor counterparty.

22. The method of claim 1, further comprising:

manually executing the full value of a one of the passive orders based at least in part on a status as principal or broker of the party that entered the passive order to be automatically executed.

23. The method of claim 1, further comprising:

manually executing a part of the value of a one of the passive orders based at least in part on a status as principal or broker of the party that entered the passive order to be automatically executed.

24. A method for configuring trading interface settings, comprising:

in an electronic trading system for anonymous trading, setting in a non-transitory memory of an electronic trading system trading limitations to be applied to trading by a trader designated by the restrictions, the limitations indicating restrictions on tradability of orders by the designated trader, the trading restrictions based at least in part on a principal vs, broker role of the counterparties that entered the respective orders, the settings available to be set including a setting enabling the designated trader to trade orders entered by counterparty principals on a less-restricted basis and enabling trading of orders entered by counterparty brokers on a more-restricted basis; and

imposing the trading limitations on the designated trader based at least in part on the stored trading limitation settings.

25. The method of claim 24, further comprising the steps of:

receiving computer data signals conveying two passive orders for proposed transactions to be mediated with assistance of an electronic trading system, stored data for the orders indicating that a first of the two passive orders is entered with authority of a principal of the principal'"'"'s real party in interest, and the stored data indicating that a second of the two passive orders is entered with authority of a broker acting on behalf of the broker'"'"'s real party in interest; and

electronically determining presentation of the first and second passive orders to a prospective aggressor counterparty, a difference between the determined presentation of the two passive orders to the prospective aggressor counterparty being based at least in part on the stored indication of principal vs, broker authority, and indicating to the prospective aggressor counterparty the respective principal and broker authorities of the two respective passive orders.

26. The method of claim 24, further comprising the step of:

restricting trading of counterparty orders by the limitation-setting trader based at least in part on the principal vs, broker role of the counterparties that entered the respective counterparty orders.

27. The method of claim 24, wherein:

enabling presentation of some counterparty orders to the limitation-setting trader, and blocking presentation of other counterparty orders, based at least in part on limitations set by the limitation-setting trader to designate enabling/blocking presentation based on principal vs, broker role of the counterparties that entered the respective counterparty orders.

28. The method of claim 24, wherein:

the limitations set by the limitation-setting trader enable presentation of some counterparty orders to the limitation-setting trader with an indication that the counterparty orders are tradeable by the limitation-setting trader, and presentation of other counterparty orders with an indication that the counterparty orders are not tradeable by the limitation-setting trader, based at least in part on the indication of principal vs, broker role of the counterparty that entered the respective counterparty orders.

29. The method of claim 24, wherein:

the difference in tradeability of counterparty orders by the limitation-setting trader is further based at least in part on a status of the trader as principal vs, a broker acting on behalf of a principal.

30. A system for electronic trading, having hardware and/or software in non-transitory memory, designed to:

receive and store computer data signals conveying two passive orders for proposed transactions to be mediated with assistance of the electronic trading system, the stored signals of the orders indicating that a first of the two passive orders is entered with authority of a principal of the principal'"'"'s real party in interest, and the stored signals indicating that a second of the two passive orders is entered with authority of a broker acting on behalf of the broker'"'"'s real party in interest; and

determine a presentation of the first and second passive orders to a prospective aggressor counterparty, a difference between the determined presentation of the two passive orders to the prospective aggressor counterparty being based at least in part on the stored indication of principal vs, broker authority, and indicating to the prospective aggressor counterparty the respective principal and broker authorities of the two respective passive orders.

31. The system of claim 30, being further configured to:

present the first passive trading order and the second passive trading order using a special designation on a trader workstation, which indicates bid availability on a trader workstation.

32. The system of claim 31, being further configured to:

present the first passive trading order in a different manner than the second passive trading order, wherein the different manner is using different colors, using different fonts, or using flashing.

33. The system of claim 30, being further configured to:

prevent the prospective aggressor counterparty from acting on the first passive order based at least in part on a determination that the first order was entered with the authority of a broker.

34. The system of claim 33 being further configured to:

block a trading command from the prospective aggressor counterparty so that the aggressor'"'"'s trading command does not form part of a trade.

35. The system of claim 34, being further configured to:

determine whether a trading command is a passive trading order or an aggressive trading command to determine acceptance status.

36. The system of claim 30, being further configured to:

prevent the prospective aggressor counterparty from acting on one of the passive trading orders based at least in part on the stored indication of a status of the party that entered the one passive trading order as principal or broker.

37. The system of claim 30, wherein:

the difference between the determined presentation includes the presentation of one of the two passive orders to the prospective aggressor counterparty, and blocking presentation of the other.

38. The system of claim 30, wherein:

the two passive orders are on behalf of the same real party in interest.

39. The system of claim 30, wherein:

the two passive orders are on behalf of different real parties in interest.

40. The system of claim 30, wherein:

the presentation to the prospective aggressor counterparty is by means of a display screen.

41. The system of claim 40, wherein:

the difference between the determined presentations of the two passive orders to the prospective aggressor counterparty includes different visual attributes.

42. The system of claim 40, wherein:

the difference between the determined presentations of the two passive orders to the prospective aggressor counterparty includes indicating that one of the two passive orders is not available to be traded by the prospective aggressor counterparty.

43. The system of claim 30, wherein:

the difference between the determined presentations of the two passive orders to the prospective aggressor counterparty is further based at least in part on a status of the prospective aggressor counterparty as principal or broker.

44. A system for permitting set trading interface settings of an electronic trading system, comprising computer equipment that is configured to:

permit setting of trading limitations for storage in a non-transitory memory of computer hardware of the electronic trading system, the set trading limitations indicating restrictions on tradeability by a trader designated by the restriction of orders placed by potential counterparty traders, the restrictions based at least in part on a principal vs, broker role of the counterparties that entered the respective orders, the electronic trading system maintaining anonymity to the designated trader of the counterparty traders as to their orders, the settings available to be set including a setting enabling the designated trader to trade orders entered by counterparties acting with the authority of a principal on a less-restricted basis and enabling the designated trader to trade orders entered by counterparties acting with the authority of brokers on a more-restricted basis; and

impose the trading limitations on the designated trader as set by the trading limitation settings.

45. The system of claim 44, wherein the computer equipment is further configured to:

restrict trading of counterparty orders by the limitation-setting trader based at least in part on the principal vs, broker role of the counterparties that entered the respective counterparty orders.

46. The system of claim 44, wherein:

the limitations set by the limitation-setting trader enable presentation of some counterparty orders to the limitation-setting trader, and block presentation of other counterparty orders, based at least in part on a principal vs, broker role of the counterparties that entered the respective counterparty orders.

47. The system of claim 44, wherein:

the limitations set by the limitation-setting trader enable presentation of some counterparty orders to the limitation-setting trader with an indication that the counterparty orders are tradeable by the limitation-setting trader, and presentation of other counterparty orders with an indication that the counterparty orders are not tradeable by the limitation-setting trader, based at least in part on the indication of principal vs, broker role of the counterparty that entered the respective counterparty orders.

48. The system of claim 44, wherein:

the difference in tradeability of counterparty orders by the limitation-setting trader is further based at least in part on a status of the trader as principal vs, a broker acting on behalf of a principal.