Auction market with price improvement mechanism

Abstract

A system for auctioning financial products over a distributed, networked computer system includes a plurality of workstations for entering orders for financial products into the distributed, networked computer system. The orders specify a price for the financial product, a quantity of the financial product and exposure time which the order can remain active. The system also includes a plurality of workstations for entering predefined relative indication and responses to orders for the product. The predefined relative indications specify a willingness to trade. The responses specify a price and quantity. The system includes a server computer coupled to the workstations for entering the orders, predefined relative indications, and the responses, with the server computer executing a server process that for a first one of said orders, determines a match to said first order with the predefined relative indications, responses and contra-side orders during an interval determined by the exposure time specified by said first order.

1 - 78 . (canceled) 
   
   
       79 . A method of auctioning a product over a distributed, networked computer system, said method comprising:
 receiving by the distributed, networked computer system, an order for a product; wherein said order includes an order price, an order quantity and an order life span for the order to remain active;   beginning in said distributed, networked computer system an auction for said product, said auction being based on said order for said product;   receiving by the distributed, networked computer system, a response to said order; wherein said response includes a response price which is relative to said order price and to a generally accepted indicator of a prevailing market price for the product and which includes a price improvement, said response also including a response quantity; and,   executing the received order against the received response during said order life span.   
   
   
       80 . The method according to  claim 79  wherein said response price changes during said order life span. 
   
   
       81 . The method according to  claim 79  further comprising ending said auction at the conclusion of said order life span. 
   
   
       82 . A system for auctioning a product over a distributed, networked computer system, said system comprising:
 a workstation for entering an order for a product into the distributed, networked computer system; wherein said order includes an order price, an order quantity and an order time for the order to remain active;   a workstation for entering a response to said order; wherein said response includes a response price which is relative to said order price and to a generally accepted indicator of a prevailing market price for the product and which includes a price improvement, said response also including a response quantity; and,   a server computer coupled to the distributed, networked computer system, said server computer including software programmed to begin an auction based on said order and execute said order against said response during a time interval within said order time.   
   
   
       83 . The system according to  claim 82  wherein said product has a value and wherein said value changes during said life span. 
   
   
       84 . The method according to  claim 82  wherein said server computer is programmed to end said auction at the conclusion of said order life span.