HYBRID TRADING SYSTEM FOR CONCURRENTLY TRADING THROUGH BOTH ELECTRONIC AND OPEN-OUTCRY TRADING MECHANISMS
A system and method of allocating orders in an exchange configured for trading by a combination of electronic and open-outcry trading mechanisms is provided. One method includes permitting multiple quotes to be disseminated to the market, and providing market making rights of varying degrees to entities having a physical presence on the floor of the exchange and entities remotely located away from the trading floor. The system includes a trade engine configured for receiving orders from market makers on and away from the trading floor. The system also includes executable instructions for allocating to designated primary market makers a portion of an incoming order remaining after first trading against public customer orders.
1 .- 21 . (canceled)
22 . A computer-implemented method of routing orders for financial instruments in an exchange having both real-time screen-based trading and open-outcry trading capabilities, the method comprising the following steps:
receiving, by a financial exchange computer, an electronic order to trade one or more financial instruments at a financial exchange;
concurrently receiving, by the financial exchange computer, quotes generated by a plurality of market makers for a particular financial instrument, wherein at least one of the plurality of market makers is physically present on a trading floor of the financial exchange and at least one of the plurality of market makers is not physically present on the trading floor;
determining, by the financial exchange computer, that at least a portion of the electronic order is immediately executable against at least one of the quotes received;
allocating, by financial exchange computer, the at least a portion of the electronic order against the at least one of the quotes according to at least one of a first or second allocating rule;
executing, by the financial exchange computer, the at least a portion of the electronic order; and
automatically routing, by the financial exchange computer, any remaining portion of the electronic order to an electronic order book.
23 . The computer-implemented method of claim 22 , wherein the one or more financial instruments comprise securities, options, or futures.
24 . The computer-implemented method of claim 22 , wherein the first allocating rule is a parity rule.
25 . The computer-implemented method of claim 24 , wherein the second allocating rule is a market turner rule.
26 . The computer-implemented method of claim 22 , wherein said allocating step further comprises:
allocating the at least a portion of the electronic order against the at least one of the quotes according to a customer priority rule.
27 . The computer-implemented method of claim 22 , wherein the financial exchange computer comprises one or more computers in electronic communication with each other.
28 . The computer-implemented method of claim 22 , wherein said allocating step requires that both the first and second allocating rules be applied.
29 . A financial exchange computer at a financial exchange, the financial exchange computer comprising:
a display device;
a memory storing a set of allocating rules; and
a processor in communication with the display device and the memory, the processor configured to utilize one or more of the allocating rules stored in the memory and to:
receive an electronic order to trade one or more financial instruments;
concurrently receive quotes generated by a plurality of market makers for a particular financial instrument, wherein at least one of the plurality of market makers is physically present on a trading floor of the financial exchange and at least one of the plurality of market makers is not physically present on the trading floor;
determine that at least a portion of the electronic order is immediately executable against at least one of the quotes received;
allocate the at least a portion of the electronic order against the at least one of the quotes according to at least one of a first or second allocating rule;
execute the at least a portion of the electronic order; and
automatically route any remaining portion of the electronic order to an electronic order book.
30 . The financial exchange computer of claim 29 , wherein the one or more financial instruments comprise securities, options, or futures.
31 . The financial exchange computer of claim 29 , wherein the first allocating rule is a parity rule.
32 . The financial exchange computer of claim 31 , wherein the second allocating rule is a market turner rule.
33 . The financial exchange computer of claim 29 , wherein the processor is configured to allocate the at least a portion of the electronic order against the at least one of the quotes according to a customer priority rule.
34 . The financial exchange computer of claim 29 , wherein the financial exchange computer comprises one or more computers in electronic communication with each other.
35 . The financial exchange computer of claim 29 , wherein the processor is configured to apply both the first and second allocating rules.