Methods and systems for computer-based incremental trading
Methods and systems for computer-based incremental trading are provided. Owners of the top price/time priority orders are able to trade between each other multiple numbers of times prior to the expiration of a workup period, at which time the workup orders of all the users participating in the workup are matched. The workup period is private between the owners of the top price/time priority orders and the orders are allowed to be modified multiple times. When the workup period ends, orders are matched according to the original price/time priority.
1. A computer-based dealer-to-dealer trading method for trading a plurality of different types of bond instruments among a plurality of traders via a computer trading platform, the method comprising:
receiving, by the computer trading platform from a computing device associated with a first trader, an order for a bond instrument, wherein the computer trading platform comprises a server computing device and a database;
storing, by the computer trading platform, the order in the database;
transmitting, by the computer trading platform, the order to a computing device associated with each of the plurality of traders to notify the traders of the order;
matching, by the computer trading platform, the order using price and time priority with a first bid/offer received from a computing device associated with a second trader and a second bid/offer received from a computing device associated with a third trader, wherein the first bid/offer of the second trader has higher priority to trade over the second bid/offer of the third trader responsive to the price and time priority;
determining, by the computer trading platform, whether to initiate a workup period for the order between the first trader and the second trader responsive to triggering of predetermined workup conditions, wherein the workup conditions include size of the order, price of the order, size of the first bid/offer, price of the bid/offer, or any combination thereof;
initiating, by the computer trading platform, the workup period between the first trader and the second trader by transmitting a workup initiating transaction via the platform to the computing devices associated with the first and second traders;
enabling, by the computer trading platform, the first trader and the second trader to modify the matched order between the first trader and the second trader prior to the expiration of the workup period;
providing, by platform, an indicator to the first trader that at least part of the total size of the workup orders on the opposite side of the market belongs to the second trader;
providing, by platform, an indicator to the second trader that at least part of the total size of the workup orders on the opposite side of the market belongs to the first trader;
terminating, by the computer trading platform, the workup period;
when the workup period is terminated:
executing, by the computer trading platform, the order between the first trader and the second trader according to order parameters existing prior to initiation of the workup period;
if the full size of the second trader's bid/offer is satisfied and the size of the order is not exhausted, executing, by the computer trading platform, the order between the first trader and the third trader according to order parameters existing prior to initiation of the workup period; and
if the full size of the third trader's bid/offer is satisfied and the size of the order is not exhausted, executing, by the computer trading platform, the order between the first trader and the second trader according to order parameters modified during the workup period.
2. The method of claim 1 , wherein the matched order is modified during the workup period.
3. The method of claim 1 , wherein the matched order is not modified during the workup period.
4. The method of claim 1 , further comprising receiving, by the computer trading platform, an indication from at least one of the computing device associated with the first trader and the computing device associated with the second trader to convert the modified order size of the at least one of the first trader and the second trader to the order size.
5. The method of claim 1 , further comprising generating, by the computer trading platform, activity log messages for workup order modification.
6. The method of claim 1 , further comprising rejecting, by the computer trading platform, an order modification while the workup order is being executed.
7. The method of claim 1 , further comprising matching, by the computer trading platform, the modified orders when the modified orders are received and prior to the expiration of the workup period.
8. The method of claim 1 , further comprising decrementing, by the computer trading platform, the order sizes of the first trader and the second trader by the executed size every time there is an execution.
9. The method of claim 1 , further comprising cancelling, by the computer trading platform, the workup order when a workup size of zero is received from at least one of the computing device associated with the first trader and the computing device associated with the second trader.
10. The method of claim 1 , further comprising enabling, by the computer trading platform, the third user to modify the second bid/offer prior to the expiration of the workup period.
11. The method of claim 10 , further comprising enabling, by the computer trading platform, the third trader to cancel the modified second bid/offer before the expiration of the workup period.
12. The method of claim 1 , further comprising enabling, by the computer trading platform, the third user to modify the second bid/offer prior to the expiration of the workup period when the second bid/offer of the third trader is withdrawn.
13. The method of claim 1 , further comprising triggering the workup period on a one-man locked market.
14. The method of claim 13 , wherein when the full size of the one man locked market is executed in full on either side, the order on the opposite side of one man locked market is automatically held.
15. The method of claim 13 , wherein the full size of either a bid or offer order of the one man locked market is executed in full.
16. A system for trading a plurality of different types of bond instruments among a plurality of traders, the system comprising:
a server computing device configured to:
receive, from a first trader, an order for a bond instrument;
store the order in a database coupled to the server computing device;
transmit the order to a computing device associated with each of the plurality of traders to notify the traders of the order;
match the order using price and time priority with a first bid/offer received from a computing device associated with a second trader and a second bid/offer received from a computing device associated with a third trader, wherein the first bid/offer of the second trader has higher priority to trade over the second bid/offer of the third trader responsive to the price and time priority;
determine whether to initiate a workup period for the order between the first trader and the second trader responsive to triggering of predetermined workup conditions, wherein the workup conditions include size of the order, price of the order, size of the first bid/offer, price of the bid/offer, or any combination thereof;
initiate the workup period between the first trader and the second trader by transmitting a workup initiating transaction via the platform to the computing devices associated with the first and second traders;
enable the first trader and the second trader to modify the matched order between the first trader and the second trader prior to the expiration of the workup period;
provide an indicator to the first trader that at least part of the total size of the workup orders on the opposite side of the market belongs to the second trader;
provide an indicator to the second trader that at least part of the total size of the workup orders on the opposite side of the market belongs to the first trader;
terminate the workup period;
when the workup period is terminated:
execute the order between the first trader and the second trader according to order parameters existing prior to initiation of the workup period;
if the full size of the second trader's bid/offer is satisfied and the size of the order is not exhausted, execute the order between the first trader and the third trader according to order parameters existing prior to initiation of the workup period; and
if the full size of the third trader's bid/offer is satisfied and the size of the order is not exhausted, execute the order between the first trader and the second trader according to order parameters modified during the workup period.
17. The system of claim 16 , wherein the matched order is modified during the workup period.
18. The system of claim 16 , wherein the matched order is not modified during the workup period.
19. The system of claim 16 , wherein the server computing device is further configured to receive an indication from at least one of the computing device associated with the first trader and the computing device associated with the second trader to convert the modified order size of the at least one of the first trader and the second trader to the order size.
20. The system of claim 16 , wherein the server computing device is further configured to generate activity log messages for workup order modification.
21. The system of claim 16 , wherein the server computing device is further configured to reject an order modification while the workup order is being executed.
22. The system of claim 16 , wherein the server computing device is further configured to match the modified orders when the modified orders are received and prior to the expiration of the workup period.
23. The system of claim 16 , wherein the server computing device is further configured to decrement the order sizes of the first trader and the second trader by the executed size every time there is an execution.
24. The system of claim 16 , wherein the server computing device is further configured to cancel the workup order when a workup size of zero is received from at least one of the computing device associated with the first trader and the computing device associated with the second trader.
25. The system of claim 16 , wherein the server computing device is further configured to enable the third user to modify the second bid/offer prior to the expiration of the workup period.
26. The system of claim 25 , wherein the server computing device is further configured to enable the third trader to cancel the modified second bid/offer before the expiration of the workup period.
27. The system of claim 16 , wherein the server computing device is further configured to enable the third user to modify the second bid/offer prior to the expiration of the workup period when the second bid/offer of the third trader is withdrawn.
28. The system of claim 16 , wherein the server computing device is further configured to trigger the workup period on a one-man locked market.
29. The system of claim 28 , wherein when the full size of the one man locked market is executed in full on either side, the order on the opposite side of one man locked market is automatically held.
30. The system of claim 16 , wherein the full size of either a bid or offer order of the one man locked market is executed in full.