Call for quote/price system and methods for use in a wholesale financial market
An electronic trading system and associated methods that provide for anonymous pricing data while ensuring the integrity of the system by preventing it from being used for price discovery information only. Methods are included to police the dealers requesting price information and clear rules are implemented to reward the dealer offering the best price. Dealers request price information by submitting an open (not anonymous) request to a broker for a price on an amount of a security or financial instrument, referred to herein as a “Price-For-Call,” which results in an anonymous RFQ being sent to a group of other dealers. If more than one dealer in the group responds with a price, only the best price (bid or offer or both) is returned to the requesting dealer and only the dealer offering the best price is rewarded with knowledge of the price information by virtue of the fact that his price traded.
1. A computerized method for facilitating trading on an electronic trading system of a financial instrument with a group of dealers, comprising:
receiving at a central computer system an open request from a requesting dealer electronic trading system to make an illiquid market for an amount of said financial instrument, said open request including a point spread in the illiquid market between an acceptable bid and an acceptable offer for said amount of said financial instrument;
transmitting said open request in the illiquid market by said central computer system to an electronic trading system of each of said group of dealers;
receiving at said central computer system from one or more of said dealers of said group of dealers a commitment to trade said amount of said financial instrument at a specified price; and
transmitting said commitment to trade to said requesting dealer electronic trading system.
2. The method of claim 1 , wherein said open request further includes said specified price.
3. The method of claim 1 , wherein said specified price is included within said commitment to trade as either said acceptable bid or said acceptable offer and said requesting dealer can trade on either said acceptable bid or said acceptable offer.
4. The method of claim 1 , wherein said open request further includes an acceptable bid based on a last traded price for said amount of said financial instrument.
5. The method of claim 1 , wherein the identity of the requesting dealer is confidential until a trade occurs.
6. The method of claim 1 , further comprising: monitoring, by said central computer system, said requesting dealer and said group of dealers for an action that compromises said electronic trading system.
7. The method of claim 1 , further comprising, publishing to said group of dealers an identification of a requesting dealer that cancels said open request.
8. The method of claim 7 , further comprising preventing said requesting dealer that cancels said open request from making one or more of said open requests at a future time.
9. The method of claim 7 , further comprising preventing said requesting dealer that cancels said open request from using said electronic trading system for other forms of securities trading.
10. The method of claim 1 , receiving a request to cancel or change said commitment to trade from at least one of said group of dealers.
11. The method of claim 10 , wherein said request to cancel or change said commitment to trade is within a predetermined period of time from a time of receipt of said commitment to trade.