Systems and methods for controlling traders from manipulating electronic trading markets
Systems and methods are provided to control gaming in electronic trading markets. These systems and methods alleviate the problem of a seller or buyer trying to act on a trader's original bid or offer only to trade at an unfavorable level after the trader changes the bid or offer. A pricing method suspends trading for a period of time if a price difference between two bids or offers by the same trader is too great. A timing method prevents a trader from canceling or replacing a bid or offer for a period of time. These methods provide a more fair and efficient way of executing electronic trades.
1. A method for controlling manipulation of an electronic trading market by a trader comprising the steps of:
providing, via a processor, an exclusive trading period wherein only a first trader is allowed to submit a bid or offer and a second trader is allowed to submit a hit or take; and
automatically providing, via the processor, a bid-offer period upon completion of the exclusive trading period, during which the processor prevents the first trader from canceling or replacing a submitted bid or offer.
2. The method of claim 1 , wherein during the bid-offer period the processor prevents the first trader from replacing the bid or offer.
3. The method of claim 1 wherein during the exclusive trading period, the processor allows the first trader to submit multiple bids or offers.
4. The method of claim 1 further comprising the steps of:
restarting the exclusive trading period upon the second trader submitting a hit or take.
5. The method of claim 1 , wherein during the bid-offer period the processor prevents the first trader from canceling the bid or offer.
6. The method of claim 1 further comprising allowing the second trader to respond to the bid or offer with a hit or take during the bid-offer period.
7. The method of claim 1 further comprising allowing the first trader to cancel or replace the bid or offer upon completion of the bid-offer period.
8. A system for controlling manipulation of an electronic trading market by a trader comprising:
a tangible memory storing programs to instruct a trading server to provide:
an exclusive trading period wherein a first trader is allowed to submit a bid or offer and a second trader is allowed to submit a hit or take, and
a bid-offer period that starts automatically upon completion of the exclusive trading period, during which the processor prevents the first trader from canceling or replacing a submitted bid or offer.
9. The system of claim 8 wherein the programs instruct the trading server to restart the exclusive trading period upon the second trader submitting a hit or take.
10. The system of claim 8 wherein the programs instruct the trading server to, during the bid-offer period, prevent the first trader from replacing the bid or offer.
11. The system of claim 8 wherein the programs instruct the trading server to, during the bid-offer period, allow the second trader to respond to the bid or offer with a hit or take.
12. The system of claim 8 wherein the programs instruct the trading server to allow the first trader to cancel or replace the bid or offer upon completion of the bid-offer period.