System and method for buy-side order matching
Techniques for buy-side order matching in the trading of financial instruments using a centralized matching engine having one or more storage devices including rules and order parameters for a plurality of buy-side parties. The centralized matching engine includes one or more transmitters and receivers communicatively coupled to a network and one or more processors operatively coupled to the one or more storage devices and the one or more transmitters and receivers. At least one message sent over the network by a plurality of buy-side parties and is received by the central matching engine to set the rules or order parameters. At least one order of at least two of the plurality of buy-side parties is matched based on the rules and the order parameters. A message is transmitted over the network to a sell-side party indicating that trade negotiation can commence.
1. A system for order matching in the trading of financial instruments, comprising:
a centralized matching engine having one or more transmitters and receivers, wherein the centralized matching engine is communicatively coupled to a network, the network including one or more first computer systems and at least one second computer system, wherein the one or more first computer systems are configured to communicate between one or more first parties and the centralized matching engine, and wherein the at least one second computer system is configured to communicate between a second party and the centralized matching engine;
the centralized matching engine further having one or more processors operatively coupled to one or more storage devices and the one or more transmitters and receivers, the one or more processors configured to:
receive at least one message sent over the network from any of the one or more first computer systems, wherein the at least one message is stored in one or more of the storage devices and sets one or more rules and one or more order parameters, and wherein the one or more rules and the one or more order parameters include a trade interest;
analyze the one or more rules and the one or more order parameters to determine eligibility for at least one of the one or more first parties;
determine a first subset of the one or more first parties based on the one or more rules and the one or more order parameters, wherein the first sub-set of the one or more first parties each conform to at least one of the one or more rules or the one or more order parameters;
match the trade interest of the one or more first parties based on the identification of the first subset of the one or more first parties and the one or more rules or the one or more order parameters;
generate and transmit a match message to the first computer system, the match message indicating that a match has been found;
display information based on the match message on at least one first display, wherein the at least one first display is operatively connected to the one or more first computer systems, wherein the information displayed on the one or more first display comprises a first window approximately adjacent a second window, and wherein the first window comprises the trade interest and at least one of a slider interface and a first button for confirming the trade interest, and wherein the second window comprises a second button for withdrawing the trade interest;
receive a reply message input from the one or more first computer systems, wherein the reply message input indicates whether at least one first party confirms the trade interest or whether at least one first party withdraws the trade interest;
transmit a negotiation message to the second computer system confirming the respective trade interests, wherein the transmission of the negotiation message to the second party computer system indicates that trade negotiation can commence; and
match the orders of the one or more first parties when the one or more order parameters and the one or more order parameters for a second party include a same instrument symbol and an opposite order direction, when the one or more rules for the first and second party include a mutual second party.
2. The system according to claim 1 , wherein the first computer system is a buy-side computer system and the second computer system is a sell-side computer system.
3. The system according to claim 1 , wherein the one or more rules includes, for the one or more first parties, an indication of which other first parties, if any, to avoid matching with, and an indication of at least one second party that each first party is willing to engage with for subsequent trade negotiation.
4. The system according to claim 1 , wherein the one or more processors are further configured to communicate via the network with the one or more first parties to withdraw, modify, or cancel pending trade interests.
5. The system according to claim 1 , wherein the message to the second party includes instrument details and names or identities of the one or more first parties.
6. The system according to claim 1 , wherein the one or more first parties include at least two first parties.
7. A method for order matching in the trading of financial instruments using a centralized matching engine having one or more transmitters and receivers, wherein the centralized matching engine is communicatively coupled to a network, the network including one or more first computer systems and at least one second computer system, wherein the one or more first computer systems are configured to communicate between a one or more first parties and the centralized matching engine, wherein the at least one second computer system is configured to communicate between a second party and the centralized matching engine, wherein the centralized matching engine further includes one or more processors operatively coupled to one or more storage devices and the one or more transmitters and receivers, the method comprising:
receiving at least one message sent over the network from any of the one or more first computer systems, wherein the at least one message is stored in one or more of the storage devices and sets one or more rules and the one or more order parameters, and wherein the one or more rules and the one or more order parameters include a trade interest;
analyzing the one or more rules and the one or more order parameters to determine eligibility for at least one of the one or more first parties;
determining a first subset of the one or more first parties based on the one or more rules and the one or more order parameters, wherein the first sub-set of the one or more first parties each conform to at least one of the one or more rules or the one or more order parameters;
matching the trade interest of one or more first parties based on the identification of the first subset of the one or more first parties and the one or more rules or the one or more order parameters;
generating and transmitting a match message to the first computer system, the match message indicating that a match has been found;
displaying information based on the match message on at least one first display, wherein the at least one first display is operatively connected to the one or more first computer systems, wherein the information displayed on the one or more first display comprises a first window approximately adjacent a second window, and wherein the first window comprises the trade interest and at least one of a slider interface and a first button for confirming the trade interest, and wherein the second window comprises a second button for withdrawing the trade interest;
receiving a reply message input from the one or more first computer systems, wherein the reply message input indicates whether at least one first party confirms the trade interest or whether at least one first party withdraws the trade interest;
transmitting a negotiation message to the second computer system confirming the respective trade interests, wherein the transmission of the negotiation message to the second computer system indicates that trade negotiation can commence; and
matching the orders of the one or more first parties when the one or more order parameters and the one or more order parameters for a second party include a same instrument symbol and an opposite order direction, when the one or more rules for the first and second party include a mutual second party.
8. The method according to claim 7 , wherein the first computer system is a buy-side computer system and the second computer system is a sell-side computer system.
9. The method according to claim 7 , wherein the one or more rules includes, for the one or more first parties, an indication of which other first parties, if any, to avoid matching with, and an indication of at least one second party that each first party is willing to engage with for subsequent trade negotiation.
10. The method according to claim 7 , further comprising communicating via the network with the one or more first parties to withdraw, modify, or cancel pending trade interests.
11. The method according to claim 7 , wherein the message to the second party includes instrument details and names or identities of the one or more first parties.
12. The method according to claim 7 , wherein the one or more first parties include at least two first parties.
13. The method according to claim 7 , wherein the one or more order parameters comprises one or more of the instrument symbol, an order size, or the order direction for the trade interest placed by the one or more first parties.
14. A non-transitory computer-readable medium storing instructions that, when executed by a processor, cause a computer system to match orders in the trading of financial instruments, by performing the steps of:
receiving at least one message sent over a network from any of one or more first party computer systems, wherein the network includes the one or more first computer systems and at least one second computer system, wherein the one or more first computer systems are configured to communicate between one or more first parties and a centralized computer matching engine, wherein the at least one second computer system is configured to communicate between a second party and the centralized computer matching engine, wherein the at least one message is stored in one or more storage devices coupled to the centralized matching engine and sets one or more rules and one or more order parameters, and wherein the one or more rules and the one or more order parameters include a trade interest;
analyzing the one or more rules and the one or more order parameters to determine eligibility for at least of the one or more first parties;
determining a first subset of the one or more first parties based on the one or more rules and the one or more order parameters, wherein the first sub-set of the one or more first parties each conform to at least one of the one or more rules or the one or more order parameters;
matching the trade interest of one or more first parties based on the identification of the first subset of the one or more first parties and the one or more rules or the one or more order parameters;
generating and transmitting a match message to the first computer system, the match message indicating that a match has been found;
displaying information based on the match message on at least one first display, wherein the at least one first display is operatively connected to the one or more first computer systems;
receiving a reply message input from the one or more first computer systems, wherein the reply message input indicates whether at least one first party confirms the trade interest or whether at least one first party withdraws the trade interest, wherein the information displayed on the one or more first display comprises a first window approximately adjacent a second window, and wherein the first window comprises at least one of a slider interface and the trade interest and a first button for confirming the trade interest, and wherein the second window comprises a second button for withdrawing the trade interest;
transmitting a negotiation message to the second computer system confirming the respective trade interests, wherein the transmission of the negotiation message to the second computer system indicates that trade negotiation can commence; and
matching the orders of the one or more first parties when the one or more order parameters and the one or more order parameters for a second party include a same instrument symbol and an opposite order direction, when the one or more rules for the first and second party include a mutual second party.