Electronic trading system supporting anonymous negotiation and indicators of interest
View Patent ↗A system conducts anonymous negotiations and supports indications-of-interest (IOIs) in trading stock. The system includes a database for storing public orders received from a public stock trading system; and a server for receiving hidden orders from a plurality of users and for conducting anonymous negotiations between first and second users with the hidden orders. The server repeatedly accesses the database to determine a match of any one of the hidden orders with any one of the public orders, and to execute a pair of orders selected from the hidden orders and the public orders.
1. A system for electronically conducting trades of financial instruments, including:
at least one computer with associated computer memory which electronically receives orders for the financial instrument originating from within the system from user stations of a plurality of users of the system and; orders for the financial instrument originating from outside the system;
the at least one computer being programmed to:
support anonymous negotiations for a trade of one or more orders of the financial interest originating from within the system with one or more other orders originating within the system; and
electronically execute:
a trade of orders in the financial instrument between orders originating from within the system that are matched by the at least one computer without negotiation;
a trade of an order in the financial instrument originating from within system with an order originating from outside the system that are matched by the at least one computer without negotiation;
a trade of orders in the financial instrument which originate from within the system negotiated by a first and a second user of the system via respective user stations and the at least one computer in accordance with at least price and quantity terms of the trade agreed to by the first and second users; and
a trade in the financial instrument between an order originating within the system of a first user of the system or an order originating within the system of a second user of the system, where the first and second orders include terms agreed to by the first and second users, and an order originating from outside the system;
wherein the at least one computer is programmed to execute a trade in accordance with a priority when the same trade becomes available between two orders originating within the system, and between an order originating from within the system and an order originating from outside the system.
2. The system of claim 1 wherein the at least one computer is programmed to provide the priority of trade execution to the two orders originating within the system.
3. A method for electronically trading financial instruments over an electronic trading system while maintaining the identity of the trading parties anonymous with respect to each other and with respect to users of the trading system, the electronic trading system comprising at least one computer with associated computer memory adapted to communicate with users over a network, the method comprising:
the at least one computer receiving over the network anonymous orders from a plurality of users of the system;
the at least one computer receiving over the network orders for the financial instrument originating from outside the system;
the at least one computer electronically executing:
a trade of matching orders of users of the system;
a trade of an order from a user of the system matched with an order originating from outside the system;
a trade of an order of a first user of the system originating from within the system received by the at least one computer with an order of a second user of the system originating from within the system, wherein at least price and quantity terms for the trade of the orders of the first and second users are agreed to by first and second users;
a trade of one of the orders of the first and second users for which the first and second users have agreed at least to the price and quantity terms with an order originating from outside the system;
the at least one computer determining when the same trade becomes available between two orders originating within the system and between an order originating from within the system and an order originating from outside the system, and when the same trade is determined to be available, the at least one computer executing in accordance with a priority either a trade between the two orders originating within the system, or a trade between the order originating from within the system and the order originating from outside the system.