Trading system having increased liquidity provision
View Patent ↗An anonymous trading system includes a prime broker facility that allows a third party to trade on behalf of an institution. A deal is executed between the third party and a counter-party and a further deal is then executed between the third party and the party on whose behalf it has traded. The second deal may be for the same amount as the first deal or may be altered to include the third party's fee for conducting the first deal. Clients of the third party have prices available to them for trades made via the third party which are displayed at their trader terminals. The client sees that a better price is available though the third party than by dealing direct and selects to conduct a deal through the third party.
1. A computerized method of trading fungible instruments on an anonymous electronic trading system including at least one programmed computer operating as a matching engine and memory storing information regarding bilateral credit between potential counterparties, the method comprising;
storing information in the memory concerning orders received by the trading system from a plurality of parties, each order indicating the party associated with the order and a price associated with the order; and
the matching engine:
matching orders based on the price of the orders and bilateral credit between potential counterparties associated with the orders to enable trades to be made between the counterparties; and
in the absence of bilateral credit between a first and a second party, utilizing the credit of an intermediary party having bilateral credit with both the first and second parties to enable first and second party orders to be matched and a trade to be made between the first and second parties.
2. An anonymous trading system for trading fungible instruments, the trading system comprising;
at least one computer operating as a matching engine; and
memory storing:
information concerning orders received by the trading system from a plurality of parties, each order indicating the party associated with the order and a price associated with the order; and
information regarding bilateral credit between potential conterparties; and
the matching engine:
matching orders based on the price of the orders and bilateral credit between potential counterparties associated with the orders; and
in the absence of bilateral credit between a first and a second party, utilizing the credit of an intermediary party having bilateral credit with both the first and second parties to enable first and second party orders to be matched and a trade to be made between the first and second parties.