Method and apparatus for price improvement, participation, and internalization

Abstract

A method for stock option trading includes receiving an option order at a market, contemporaneously receiving a copy of the option order at an electronic drop (EDrop) system, which is separate and distinct from the market, obtaining a potential cross quantity and a potential cross price based on the option order at the EDrop system, and submitting, through the EDrop system, a contra-order, with respect to the option order, to the market for fulfillment, wherein the contra-order specifies at least one of an underlying security potential cross quantity, and the potential cross price.

1 . An electronic drop (EDrop) system configured to expand access to a market, the EDrop system comprising:
 an application server configured to store executable instructions;   a message queue (MQ) server;   a risk management server configured to execute risk management software;   a quote server configured to receive real time quotes from an external source; and   a gateway configured to communicate with the market.   
     
     
         2 . The EDrop system of  claim 1 , further comprising an email server configured to send and receive email. 
     
     
         3 . The EDrop system of  claim 1 , further comprising a trader terminal. 
     
     
         4 . The EDrop system of  claim 1 , further comprising a risk management system. 
     
     
         5 . The EDrop system of  claim 1 , further comprising an option order message queue.