System and method for managing trading order requests

• US 20040260640A1
• Filed: 04/23/2004
• Published: 12/23/2004
• Est. Priority Date: 05/15/2003
• Status: Active Grant

• Current Assignee: Cantor Index LLC
• Original Assignee: Cantor Index LLC
• Inventors: Crosthwaite, Dominic, Findlay, Lewis C.
• Granted Patent: US 8,799,121 B2
• Time in Patent Office: Days
• US Class Current: 705/37
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• 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 50/34 Betting or bookmaking, e.g. Internet betting
• CPC Class Codes: G07F 15/00 Coin-freed apparatus with meter-controlled dispensing of liquid, gas or electricity
• CPC Class Codes: G07F 17/3288 Betting, e.g. on live events, bookmaking

Abstract

A method of determining whether to approve trading order requests is provided. A request to place a first trading order is received from a user using a trading account associated with the user. A risk value is determined for the first trading order. A plurality of balances associated with the trading account are determined. The balances may include an available cash balance, an available credit balance, and an available waived margin balance for the trading account. A determination of whether to approve the first trading order is made based at least in part on the risk value for the first trading order and the available cash balance, the available credit balance, and the available waived margin balance determined for the trading account. If the first trading order is approved, the first trading order is placed.

Claims

1. A method for managing trading order requests, comprising:

receiving from a user a request to place a first trading order, the request being made using a trading account associated with the user;

determining a risk value for the first trading order;

determining a plurality of balances associated with the trading account, wherein the balances comprise an available cash balance, an available credit balance, and an available waived margin balance;

determining whether to approve the first trading order based at least in part on the risk value for the first trading order and the available cash balance, the available credit balance, and the available waived margin balance determined for the trading account; and

if the first trading order is approved, placing the first trading order.

2. The method of claim 1, wherein determining whether to approve the first trading order comprises:

performing a plurality of credit checks, one or more of the credit checks comprising a comparison between a combination of one or more of the balances associated with the trading account and the risk value for the first trading order; and

determining whether to approve the first trading order based on the results of the credit checks and a credit check matrix, the credit check matrix defining appropriate approval decisions corresponding with various results of the plurality of credit checks.

3. The method of claim 2, wherein the plurality of credit checks comprises:

a first credit check comprising a comparison between the available waived margin balance for the trading account and the risk value for the first trading order; and

a second credit check comprising a determination of whether the available credit balance for the trading account is greater than or equal to zero.

4. The method of claim 3, further comprising determining an available total margin balance for the trading account;

and

wherein the plurality of credit checks comprises a third credit check comprising a comparison between the available total margin balance for the trading account and the available cash balance, the available credit balance, and the available waived margin balance for the trading account.

5. The method of claim 2, further comprising determining a guaranteed profits balance for the trading account, the guaranteed profits balance representing an amount of profits guaranteed but not yet paid to the trading account based on one or more other executed first trading orders;

and

wherein the plurality of credit checks comprises a comparison between the risk value for the first trading order and the sum of the available cash balance, the available waived margin balance, and the guaranteed profits balance for the trading account.

6. The method of claim 2, further comprising determining a guaranteed profits balance for the trading account, the guaranteed profits balance representing an amount of profits guaranteed but not yet paid to the trading account based on one or more other executed first trading orders;

and

wherein the plurality of credit checks comprises a determination of whether the sum of the available cash balance, the available credit balance, and the guaranteed profits balance for the trading account is greater than or equal to zero.

7. The method of claim 1, further comprising determining a guaranteed profits balance for the trading account, the guaranteed profits balance representing an amount of profits guaranteed but not yet paid to the trading account based on one or more other executed first trading orders.

8. The method of claim 1, wherein determining whether to approve the first trading order comprises:

performing a plurality of margin call checks, one or more of the margin call checks comprising a determination of whether the sum of one or more of the balances associated with the trading account is greater than or equal to zero; and

determining whether to place a margin call on the trading account based on the results of the margin calls and a margin call matrix, the margin call matrix defining appropriate margin call decisions corresponding with various results of the plurality of margin calls.

9. The method of claim 8, wherein the margin call decisions include a decision not to place a margin call and a plurality of decisions to place various types of margin calls.

10. The method of claim 1, wherein determining whether to approve the first trading order comprises:

performing a plurality of credit checks, one or more of the credit checks comprising a comparison between a combination of one or more of the balances associated with the trading account and the risk value for the first trading order;

determining whether to approve the first trading order based on the results of the credit checks and a credit check matrix, the credit check matrix defining appropriate approval decisions corresponding with various results of the plurality of credit checks;

performing a plurality of margin call checks, one or more of the margin call checks comprising a determination of whether the sum of one or more of the balances associated with the trading account is greater than or equal to zero; and

determining whether to place a margin call on the trading account based on the results of the margin calls and a margin call matrix, the margin call matrix defining appropriate margin call decisions corresponding with various results of the plurality of margin calls.

11. The method of claim 1, wherein:

the requested first trading order comprises an order to trade a particular betting product; and

the risk value for the first trading order is determined based at least in part on an estimated maximum tick liability associated with the particular betting product.

12. The method of claim 11, wherein the estimated maximum tick liability is determined based at least in part on statistical data regarding the particular betting product.

13. The method of claim 1, further comprising:

matching the first trading order with a second trading order to execute the first trading order; and

adjusting one or more of the balances associated with the trading account based at least in part on the risk value of the first trading order.

14. The method of claim 13, wherein:

the requested first trading order comprises an order to trade a particular betting product;

the particular betting product is associated with at least one event having an overall duration; and

the method further comprises;

updating the risk value for the matched first trading order during the overall duration of the at least one event; and

updating one or more of the balances associated with the trading account based at least in part on the updated risk value for the matched first trading order.

15. A system for managing trading order requests, comprising:

a memory operable to store a trading account for a user; and

a processor operable to;

receive from the user a request to place a first trading order using the trading account;

determine a risk value for the first trading order;

determine a plurality of balances associated with the trading account, including an available cash balance, an available credit balance, and an available waived margin balance;

determine whether to approve the first trading order based at least in part on the risk value for the first trading order and the available cash balance, the available credit balance, and the available waived margin balance determined for the trading account; and

if the first trading order is approved, place the first trading order.

16. The system of claim 15, wherein determining whether to approve the first trading order comprises:

performing a plurality of credit checks, one or more of the credit checks comprising a comparison between a combination of one or more of the balances associated with the trading account and the risk value for the first trading order; and

determining whether to approve the first trading order based on the results of the credit checks and a credit check matrix, the credit check matrix defining appropriate approval decisions corresponding with various results of the plurality of credit checks.

17. The system of claim 16, wherein the plurality of credit checks comprises:

a first credit check comprising a comparison between the available waived margin balance for the trading account and the risk value for the first trading order; and

a second credit check comprising a determination of whether the available credit balance for the trading account is greater than or equal to zero.

18. The system of claim 17, wherein the processor is further operable to determine an available total margin balance for the trading account;

and

wherein the plurality of credit checks comprises a third credit check comprising a comparison between the available total margin balance for the trading account and the available cash balance, the available credit balance, and the available waived margin balance for the trading account.

19. The system of claim 16, wherein the processor is further operable to determine a guaranteed profits balance for the trading account, the guaranteed profits balance representing an amount of profits guaranteed but not yet paid to the trading account based on one or more other executed first trading orders;

and

wherein the plurality of credit checks comprises a comparison between the risk value for the first trading order and the sum of the available cash balance, the available waived margin balance, and the guaranteed profits balance for the trading account.

20. The system of claim 16, wherein the processor is further operable to determine a guaranteed profits balance for the trading account, the guaranteed profits balance representing an amount of profits guaranteed but not yet paid to the trading account based on one or more other executed first trading orders;

and

wherein the plurality of credit checks comprises a determination of whether the sum of the available cash balance, the available credit balance, and the guaranteed profits balance for the trading account is greater than or equal to zero.

21. The system of claim 15, wherein the processor is further operable to determine a guaranteed profits balance for the trading account, the guaranteed profits balance representing an amount of profits guaranteed but not yet paid to the trading account based on one or more other executed first trading orders.

22. The system of claim 15, wherein determining whether to approve the first trading order comprises:

performing a plurality of margin call checks, one or more of the margin call checks comprising a determination of whether the sum of one or more of the balances associated with the trading account is greater than or equal to zero; and

determining whether to place a margin call on the trading account based on the results of the margin calls and a margin call matrix, the margin call matrix defining appropriate margin call decisions corresponding with various results of the plurality of margin calls.

23. The system of claim 22, wherein the margin call decisions include a decision not to place a margin call and a plurality of decisions to place various types of margin calls.

24. The system of claim 15, wherein determining whether to approve the first trading order comprises:

performing a plurality of credit checks, one or more of the credit checks comprising a comparison between a combination of one or more of the balances associated with the trading account and the risk value for the first trading order;

determining whether to approve the first trading order based on the results of the credit checks and a credit check matrix, the credit check matrix defining appropriate approval decisions corresponding with various results of the plurality of credit checks;

performing a plurality of margin call checks, one or more of the margin call checks comprising a determination of whether the sum of one or more of the balances associated with the trading account is greater than or equal to zero; and

determining whether to place a margin call on the trading account based on the results of the margin calls and a margin call matrix, the margin call matrix defining appropriate margin call decisions corresponding with various results of the plurality of margin calls.

25. The system of claim 15, wherein:

the requested first trading order comprises an order to trade a particular betting product; and

the processor determines the risk value for the first trading order based at least in part on an estimated maximum tick liability associated with the particular betting product.

26. The system of claim 25, wherein the estimated maximum tick liability is determined based at least in part on statistical data regarding the particular betting product.

27. The system of claim 15, wherein the processor is further operable to:

match the first trading order with a second trading order to execute the first trading order; and

adjust one or more of the balances associated with the trading account based at least in part on the risk value of the first trading order.

28. The system of claim 27, wherein:

the requested first trading order comprises an order to trade a particular betting product;

the particular betting product is associated with at least one event having an overall duration; and

the processor is further operable to;

update the risk value for the matched first trading order during the overall duration of the at least one event; and

update one or more of the balances associated with the trading account based at least in part on the updated risk value for the matched first trading order.