Systems, methods and computer program products for electronic trading of financial instruments

Abstract

An internet-protocol based anonymous trading system which enables traders to identify bids and offers which they are eligible to trade based upon a color coded methodology which gives the trader credit preference information about the potential counterparty while still maintaining the anonymity of the potential counterparty. To that end, each bid or offer is prescreened against all possible counterparties' credit information in the system and each counterparty sees a unique color coded trading interface based upon their particular credit preference combinations and the others in the system. The system then shows all prices in the system, and the color-coding tells the trader which prices he is able to trade, and also shows him the full depth of the market, including those the trader is unable to trade.

Wherefore, the following is claimed:  
     
         1 . A system for facilitating derivative trading, comprising: 
 a communications network operationally interconnecting a first trader and a second trader to a central processing center;    a market module associated with said central processing center that provides said first and second traders with essentially real-time order information regarding more than one financial instrument, said order information including requests to buy financial instruments and requests to sell financial instruments;    a trader module associated with each of said first and second traders for receiving said real-time order information from said central processing center and presenting said real-time order information to said first and second traders according to trader customized profiles;    a credit preference module associated with each of said first and second traders, said credit preference modules indicating trade eligibility of respective said first and second traders for each of said requests to buy and said requests to sell; and    an execution module associated with said central processing center that processes a trade initiated by one of said first and second traders which desires to trade on an order posted in said order information by the other of said first and second traders.    
     
     
         2 . The system of  claim 1 , wherein said credit preference module determines trade eligibility based on credit preferences of both said first and second traders.  
     
     
         3 . The system of  claim 2 , wherein each of said first and second traders provides said credit preference module with credit preference information regarding the other of the first and second traders.  
     
     
         4 . The system of  claim 3 , wherein said credit preference information includes a multi-rule measurement of credit risk.  
     
     
         5 . The system of  claim 1 , further including a switch module that receives interest rate swap positions from said first and second traders, and determines relative position information for said first and second traders.  
     
     
         6 . The system of  claim 5 , wherein said switch module takes into consideration credit preference information provided by each of said first and second traders when determining said position information, whereby said position information includes potentially offsetting positions.  
     
     
         7 . The system of  claim 1 , wherein said trader module presents said order information utilizing instrument symbology.  
     
     
         8 . The system of  claim 1 , wherein said execution module generates an acknowledgment at completion of a trade between said first and second traders.  
     
     
         9 . The system of  claim 1 , wherein said order information is available for a definable period set by one of said first and second traders which posted said order information.  
     
     
         10 . The system of  claim 1 , wherein said execution module enables said first and second traders to negotiate non-commercial terms of a trade based on said order information.  
     
     
         11 . The system of  claim 1 , wherein said execution module provides said one of said first and second traders that initiated a trade based on said order information an option to request a larger quantity order.  
     
     
         12 . A system for facilitating derivative trading, said system having a plurality of interconnected trader nodes that exchange order information, each trader node comprising: 
 a trader module that receives real-time order information and presents said real-time order information to a trader according to customized profiles defined by said trader;    a credit preference module that includes credit preference data inputted by said trader for use in determining trade eligibility of trades proposed in said real-time order information with a second trader; and    an interface to a communications network that interconnects said plurality of trader nodes.    
     
     
         13 . The system of  claim 12 , wherein said credit preference module includes a multi-rule measurement that enables credit rating based on instrument maturity.  
     
     
         14 . The system of  claim 12 , wherein said trader module includes a plurality of selectable trader definable formats that said real-time order information can be presented.  
     
     
         15 . The system of  claim 14 , wherein said trader definable formats include a market entry interface that provides trading information on a trader defined list of financial instruments, and a blotter interface that provides order information of said trader.  
     
     
         16 . The system of  claim 14 , wherein said trader definable formats include a market detail interface that includes system wide orders on a specified financial instrument.  
     
     
         17 . The system of  claim 12 , wherein said trader module presents said order information utilizing instrument symbology.  
     
     
         18 . The system of  claim 12 , further including a switch module that receives interest rate swap positions from said trader and said second traders, and that determines relative position information for said trader.  
     
     
         19 . A system for facilitating derivative trading, said system having a plurality of interconnected first and second traders that exchange order information, each of said first and second traders connected to a central processing center, said central processing center comprising: 
 a market module that provides said first and second traders with essentially real-time order information regarding more than one financial instrument, said order information including requests to buy financial instruments and requests to sell financial instruments;    an execution module associated with said central processing center that can process a trade initiated by one of said first and second traders which desires to trade on an order proposed in said order information by the other of said first and second traders; and    an interface to a communications network that interconnects said plurality of first and second traders to said central processing center.    
     
     
         20 . A computer program product for use with a data processing system for facilitating derivative trading, said computer program product comprising: 
 a computer usable medium having computer-readable code means embodied in said medium, said computer-readable code means comprising:    a trader software module for receiving real-time order information and presenting said real-time order information to a trader according to profiles customized by said trader; and    a credit preference software module for determining trade eligibility of proposed trades between said trader and a second trader, wherein said credit preference software module includes credit preference data inputted by said trader.    
     
     
         21 . A computer program product for use with a data processing system for facilitating derivative trading, said computer program product comprising: 
 a computer usable medium having computer-readable code means embodied in said medium, said computer-readable code means comprising:    a market module that provides said first and second traders with essentially real-time order information regarding more than one financial instrument, said order information including requests to buy financial instruments and requests to sell financial instruments; and    an execution module associated with said central processing center that can process a trade initiated by one of said first and second traders which desires to trade on an order proposed in said order information by the other of said first and second traders.    
     
     
         22 . A method for facilitating derivative trading between a first party and a plurality of potential traders including a second party, all of which are interconnected by a computer network, said method comprising the steps of: 
 inputting credit preference data on the potential traders for distribution to the potential traders;    sending an order from the first party to the potential traders requesting a trade on an instrument; and    receiving an acknowledgment from the second trader initiating a trade with the first trader on the order.    
     
     
         23 . The method of  claim 22 , further comprising the step of receiving a request from the second trader to increase a quantity of the order.  
     
     
         24 . The method of  claim 23 , further comprising the step of responding to the request for an increased quantity.  
     
     
         25 . The method of  claim 22 , wherein said step of inputting credit preference data includes the step of rating each of the potential traders by a multi-rule measurement of credit risk.  
     
     
         26 . The method of  claim 22 , further comprising the step of canceling the order.  
     
     
         27 . The method of  claim 22 , further comprising the step of canceling all outstanding orders.  
     
     
         28 . The method of  claim 22 , further comprising the step of or suspending all outstanding orders.  
     
     
         29 . The method of  claim 22 , further comprising the step of presenting a blotter interface to the first trader that presents active orders of the first trader.  
     
     
         30 . The method of  claim 22 , further comprising the step of presenting a blotter interface to the first trader that presents executed orders of the first trader.  
     
     
         31 . A method for facilitating derivative trading between a first party and a second party, comprising the steps of: 
 receiving an order from the first party to the second party requesting a trade on an instrument;    checking the order for trade eligibility based on credit preferences of the first and second parties;    encoding the order with the appropriate information based on said step of checking the order;    presenting the encoded order to the second party based on a preference of the second trader to receive orders on the instrument; and    initiating a trade between the first and second parties if the second party initiates a trade.    
     
     
         32 . The method of  claim 31 , further including the step of presenting the second party with order information regarding outstanding orders of the second party.  
     
     
         33 . The method of  claim 31 , further including the step of presenting detail market information to the second party regarding market activity in a single financial instrument.  
     
     
         34 . The method of  claim 32 , wherein said detailed market information includes quantity, bid price, ask price, and encoded credit preference information.  
     
     
         35 . The method of  claim 31 , further including the step of presenting market entry information to the second party regarding financial instruments selected by the second party.  
     
     
         36 . The method of  claim 35 , wherein said market entry information includes best bids, best asking prices, and encoded credit preference information.  
     
     
         37 . The method of  claim 31 , further including the step of receiving an acknowledgment to the first and second traders if a trade is executed.  
     
     
         38 . The method of  claim 31 , further including the step of querying the second party to determine if the second party would like to increase the quantity traded.  
     
     
         39 . The method of  claim 31 , further including the step of negotiating non-commercial terms of the financial instrument traded.  
     
     
         40 . The method of  claim 31 , further including the steps of receiving interest rate swap positions from the first and second parties, and determining relative position information for the first and second parties.  
     
     
         41 . The method of  claim 31 , wherein the financial instrument is defined by an instrument symbology.  
     
     
         42 . The method of  claim 31 , wherein said step of checking the order for trade eligibility includes the step of screening the order by maturity date.  
     
     
         43 . A computer program product for use with a data processing system for facilitating derivative trading, said computer program product comprising: 
 a computer usable medium having computer-readable code means embodied in said medium, said computer-readable code means comprising:    computer readable code means for receiving an order from the first party to the second party requesting a trade on an instrument;    computer readable code means for checking the order for trade eligibility based on credit preferences of the first and second parties;    computer readable code means for encoding the order with the appropriate information based on said step of checking the order;    computer readable code means for presenting the encoded order to the second party based on a preference of the second trader to receive orders on the instrument; and    computer readable code means for initiating a trade between the first and second parties if the second party initiates a trade.    
     
     
         44 . A computer program product for use with a data processing system for facilitating derivative trading, said computer program product comprising: 
 a computer usable medium having computer-readable code means embodied in said medium for facilitating derivative trading between a first party and a plurality of potential traders including a second party, all of which are interconnected by a computer network, said computer-readable code means comprising:    computer readable code means for inputting credit preference data on the potential traders for distribution to the potential traders;    computer readable code means for sending an order from the first party to the potential traders requesting a trade on an instrument; and    computer readable code means for receiving an acknowledgment from the second trader initiating a trade with the first trader on the order.