Implied market trading system
A computer based trading system implies spread markets from multiple real or implied spread markets. In particular, one aspect of the invention permits implication of a spread market from a combination of inter-commodity and inter-calendar spread orders. Furthermore, another aspect of the invention allows use of nontradeable implied or bridge markets to combine with other implied or real markets to create further tradeable implied markets. The method described herein thereby permits the creation of all implied markets that are inherent in the combination of futures, calendar spread and inter-commodity spread real orders.
1. A computer-implemented method for generating implied spread markets from multiple spread orders, comprising the steps of:
storing a first spread order;
storing a second spread order, the second spread order of a different order type than the first spread order and having a common and offsetting leg with the first spread order; and
generating a first implied spread order based on the first spread order and the second spread order,
wherein the step of storing a first spread order, the step of storing a second spread order, and the step of generating a first implied spread order are implemented on a computer.
2. The method of claim 1 , further comprising the steps of:
storing a third spread order having a common and offsetting leg with the first implied spread order; and
generating a second implied spread based on the third spread and the first implied spread order.
3. The method of claim 1 , wherein one or more of the first and second spread orders is a real spread order.
4. The method of claim 1 , wherein one of the first or second spread orders is an inter-commodity spread order.
5. The method of claim 1 , wherein one of the first or second spread orders is an inter-calendar spread order.
6. The method of claim 1 , further comprising the step of:
comparing the second implied spread order with other orders to find a matched trade.
7. The method of claim 1 , further comprising the step of:
generating matched trade information for the first, second and third spread orders after the second implied spread order has been matched.
8. The method of claim 1 , wherein the first implied spread order is a non-tradable implied spread order.