Trading platform with automated negotiation and option crossing

• US 10,529,019 B2
• Filed: 05/01/2008
• Issued: 01/07/2020
• Est. Priority Date: 05/01/2008
• Status: Active Grant

• Current Assignee: Trebuchet Holdings LLC (Intercontinental Exchange, Inc.)
• Original Assignee: Trebuchet Holding LLC
• Inventors: Newhouse, Robert, Burros, Chet, Berman, Ross, Mintz, Hal
• Primary Examiner(s): Vyas, Abhishek
• Application Number:
  US12/149,443
• Publication Number:
  US 20090276363A1
• Time in Patent Office: 4,268 Days
• Field of Search: 705 35- 37
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 50/188 Electronic negotiation

Abstract

A system and method for trading securities that include at least one options leg is provided. The system generally includes a database, handlers, a network and at least one server. The database stores user information, security information and transaction information. The handlers receive information feeds from at least one public exchange. The at least one server implements an exchange facility that is capable of exchanging information with client terminals to allow the client to initiate at least one offer to trade a security having an option leg, identifying users interested in the offer, broadcasting the offer to the interested users and conducting a defined period auction among the interested users. The system and method also automatically cross the options legs on exchanges and facilitate negotiation when the auction is not consummated.

Claims

1. A system, comprising:

at least one external electronic exchange system;

one or more client terminals; and

an electronic trading platform in communication with the at least one external electronic exchange system and the one or more client terminals over at least one network, the electronic trading platform comprising;

one or more servers in communication with each other, each of said servers comprising a memory storing program instructions and at least one processor executing said program instructions;

a database embodied on at least one of said one or more servers, the database storing user profiles for a plurality of users registered to use the electronic trading platform, one or more of the user profiles holding interest criteria associated with a respective user, the interest criteria indicating one or more trade offers that the respective user is interested in receiving;

at least one data handler embodied on at least one of said one or more servers and coupled to the at least one external electronic exchange system receiving information feeds from the at least one external electronic exchange system;

a proxy; and

a book manager embodied on at least one of said one or more servers,

at least one of said one or more servers executing program instructions for exchanging information with the one or more client terminals, said program instructions causing the at least one of said one or more servers to;

generate an interactive graphical user interface (GUI) that comprises a first pane and a second pane to be displayed on said one or more client terminals, the first pane independent of the second pane;

receive, via the proxy, at least two offers to trade a security having an option leg from at least one of said client terminals;

identify, via the book manager, a portion of users among the plurality of users interested in the at least two offers by;

querying one or more of the user profiles within the database to retrieve respective interest criteria, and

determining whether offer information associated with each of the at least two offers complies with the retrieved respective interest criteria to identify the portion of users having compliant interest criteria;

broadcast the at least two offers by populating said at least two offers in the first pane of the interactive GUI, said interactive GUI being displayed on said corresponding one or more client terminals;

for each offer of the at least two offers, conduct an auction having a defined period among the identified portion of users;

monitor the one or more client terminals to identify an input from at least one of the one or more client terminals; and

upon identifying the receive input from at least one of the one or more client terminals, said input comprising a drag and drop command that drags a first offer of said at least two offers from the first pane of the interactive GUI and drops said first offer into to the second pane of the interactive GUI, said drag and drop input triggering trigger the at least one of said one or more servers to pull live liquidity information from said at least one external exchange system and to generate of an embedded interactive interface within the second pane, said embedded interactive interface populated with the displaying live liquidity information associated with the auction corresponding to said first offer, said live liquidity information being pulled from said at least one external electronic exchange system, wherein said live liquidity information is not visible and not generated unless and until said drag and drop input is received.

2. The system of claim 1, wherein executing programming instructions further causes the at least one of said one or more servers to:

generate a second type of liquidity information from among the information feeds received from the at least one external exchange based on each of the at least two offers;

aggregate the live liquidity information and the second type of liquidity information to form aggregated liquidity information; and

initiate a transaction based on the aggregated liquidity information.

3. The system according to claim 2, wherein at least one of said servers executes program instructions for consummating a trade based on at least one offer of the at least two offers and the aggregated liquidity information.

4. The system according to claim 3, wherein at least one of said servers executes program instructions for generating the second type of liquidity information from at least one public exchange and consummating the trade based on at least one of the at least two offers.

5. The system according to claim 4, wherein at least one of said servers executes program instructions for concluding the defined period auction without consummating a transaction and initiating a negotiation between an initiator of at least one of the at least two offers and at least one losing bidder of the defined period auction.

6. The system according to claim 5, wherein the negotiation is between the initiator of at least one of the at least two offers and a closest losing bidder.

7. The system according to claim 1, wherein at least one of said servers executes program instructions for concluding the defined period auction without consummating a transaction and initiating a negotiation between an initiator of at least one of the at least two offers and at least one losing bidder of the defined period auction.

8. The system according to claim 7, wherein the negotiation is between the initiator of at least one of the at least two offers and a closest losing bidder.

9. The system according to claim 1, wherein auctions in a particular security are exclusive to an initiating bidder in the defined period auction for a period of time.

10. The system according to claim 1, wherein at least one of said servers executes program instructions for, upon consummation of a trade, of automatically crossing the options legs on at least one public exchange.

11. The system according to claim 10, wherein the trade includes a stock component and at least one of said servers executes program instructions for accounting for price changes of the options legs resulting from crossing on public exchanges and offsetting the price from the stock component.

12. The system according to claim 1, wherein the trade comprises at least one of a tied transaction or a block option trade.

27. The system of claim 2, wherein the at least one of said one or more servers executes program instructions to automatically match at least one of the at least two offers with at least a portion of the aggregated liquidity information.

28. The system of claim 27, wherein the transaction is initiated in response to said automatic match.

29. The system of claim 1, wherein the second pane includes a plurality of sub-panes, each configured to display input associated with multiple auctions occurring simultaneously.

30. The system of claim 1, wherein executing programming instructions further causes the at least one of said one or more servers to:

receive further input from at least one of the one or more client terminals, said further input comprising a further drag and drop command that drags a second offer of said at least two offers from the first pane and drops said second offer into to the second pane, said further drag and drop input triggering generation of a second embedded interactive interface within the second pane, said second embedded interactive interface being independent of said first embedded interactive interface, said second embedded interactive interface displaying live liquidity information associated with another auction corresponding to said second offer simultaneously with the live liquidity information being displayed in the first embedded interactive interface.

13. A method, comprising:

providing an electronic trading platform, in communication with at least one external electronic exchange system and one or more client terminals over at least one network, the electronic trading platform comprising one or more servers in communication with each other, at least one data handler embodied on at least one of said one or more servers and coupled to the at least one external electronic exchange system receiving information feeds from the at least one external electronic exchange system, each of said servers comprising a memory storing program instructions and at least one processor executing said program instructions;

providing a database embodied on at least one of said one or more servers, the database storing user profiles for a plurality of users registered to use the electronic trading platform, one or more of the user profiles holding interest criteria associated with a respective user, the interest criteria indicating one or more trade offers that the respective user is interested in receiving;

at least one of said servers executing program instructions for generating an interactive graphic user interface (GUI) comprising a first pane and a second pane to be displayed on one or more client terminals, the first pane independent of the second pane;

setting, via the at least one of said client terminals, an interest criteria for trade offers having at least one option leg;

receiving, by the electronic trading platform from at least one of said client terminals, at least two offers to trade a security having the at least one option leg;

identifying a portion of users among the plurality of users interested in the at least two offers by;

querying one or more user profiles within the database to retrieve respective interest criteria, and

determining whether offer information associated with the at least two offers complies with the retrieved respective interest criteria to identify the portion of users having compliant interest criteria,

broadcasting the at least two offers by populating said at least two offers in the first pane of the interactive GUI said interactive GUI being displayed on said corresponding one or more client terminals;

for each offer of the at least two offers, conducting an auction having a defined period among the identified portion of users;

monitoring the one or more client terminals to identify an input from at least one of the one or more client terminals; and

upon identifying receiving the input from at least one of the one or more client terminals, said input comprising a drag and drop command that drags a first offer of said at least two offers from the first pane of said interactive GUI and drops said first offer into to the second pane of said interactive GUI, said drag and drop input triggering the at least one of said one or more servers to pull live liquidity information from said at least one external exchange system and to generate an embedded interactive interface within the second pane, said embedded interactive interface populated with the displaying live liquidity information associated with the auction corresponding to said first offer, said live liquidity information being pulled from said at least one external electronic exchange system, wherein said live liquidity information is not visible and not generated unless and until said drag and drop input is received.

14. The method of claim 13, further comprising:

generating a second type of liquidity information from among information feeds received from the at least one external exchange based on the at least one offer;

aggregate the live liquidity information and the second type of liquidity information to form aggregated liquidity information; and

initiating a transaction based on the aggregated liquidity information.

15. The method according to claim 13, further comprising:

providing an indication to at least one other user whether the at least one other user consummated a trade based on the provided information.

16. The method according to claim 15, further comprising:

prompting the at least one other user to negotiate with an entity that initiated at least one of the at least two offers if the trade is not consummated.

17. The method according to claim 16, further comprising:

prompting the at least one other user through an electronic interface to provide information used to negotiate with the entity;

transmitting electronic information between the at least one other user and the entity of at least one of the at least two offers; and

consummating a transaction based on at least one of the at least two offers when the at least one other user and entity agree.

19. The method according to claim 14, further comprising:

consummating a trade based on at least one of the at least two offers and the aggregated liquidity information.

20. The method according to claim 19, further comprising:

generating the second type of liquidity from at least one public exchange; and

consummating the trade.

21. The method according to claim 20, further comprising:

concluding the defined period auction without consummating a transaction; and

initiating a negotiation between an initiator of at least one of the at least two offers and at least one losing bidder of the defined period auction.

22. The method according to claim 21, wherein the negotiation is between the initiator of at least one of the at least two offers and a closest losing bidder.

18. A method, comprising:

providing an electronic trading platform, in communication with at least one external electronic exchange system and one or more client terminals over at least one network, the electronic exchange system comprising one or more servers in communication with each other, at least one data handler embodied on at least one of said one or more servers and coupled to the at least one external electronic exchange system receiving information feeds from the at least one external electronic exchange system, each of said servers comprising a memory storing program instructions, at least one processor executing said program instructions, and at least one database;

providing a database embodied on at least one of said one or more servers, the database storing user profiles for a plurality of users registered to use the electronic trading platform, one or more of the user profiles holding interest criteria associated with a respective user, the interest criteria indicating one or more trade offers that the respective user is interested in receiving;

executing, by the at least one of said servers, program instructions for exchanging information with the client terminals that causes the at least one of said servers to;

generate an interactive graphical user interface (GUI) that comprises a first pane and a second pane to be displayed on said one or more client terminals, the first pane independent of the second pane;

receive at least two offers to trade a security having an option leg from at least one of the client terminals;

identifying a portion of users among the plurality of users interested in the at least two offers by;

querying one or more of the user profiles within the database to retrieve respective interest criteria, and

determining whether offer information associated with each of the at least two offers complies with the retrieved respective interest criteria to identify the portion of users having compliant interest criteria;

broadcasting the at least two offers by displaying populating said at least two offers in the first pane of the interactive GUI, said GUI being screen displayed on said corresponding one or more client terminals;

for each offer of the at least two offers, conducting an auction having a defined period among the identified portion of users;

monitoring the one or more client terminals to identify an input from at least one of the one or more client terminals; and

upon identifying the receive input from at least one of the one or more client terminals, said input comprising a drag and drop command that drags a first offer of said at least two offers from the first pane of said interactive GUI and drops said first offer into to the second pane of said interactive GUI, said drag and drop input triggering the at least one of said one or more servers to pull live liquidity information from said at least one external exchange system and to generate an embedded interactive interface within the second pane, said embedded interactive interface displaying populated with the live liquidity information associated with the auction corresponding to said first offer, said live liquidity information being pulled from said at least one external electronic exchange system, wherein said live liquidity information is not visible and not generated unless and until said drag and drop input is received.

23. The method according to claim 18, wherein auctions in a particular security are exclusive to an initiating bidder in the defined period auction for a period of time.

24. The method according to claim 18, further comprising:

automatically crossing the options legs on at least one public exchange.

25. The method according to claim 24, wherein the trade includes a stock component, the method further comprising:

accounting for prices changes of the options legs resulting from crossing on public exchanges and offsetting the price from the stock component.

26. The method according to claim 18, wherein the trade comprises at least one of a tied transaction or a block option trade.