System and method for managing risk associated with product transactions

Abstract

A method of managing trading orders is provided. The method includes receiving a request to place a first order to trade a first product, the request being made using an account having one or more current balances. The method further includes determining a risk value for the first order based at least in part on the first product. The method further includes determining whether to approve the first order based at least in part on the risk value determined for the first order and one or more of the current balances for the account, and if the first order is approved, placing the first order.

1 . (canceled) 
     
     
         2 . A method, comprising:
 generating, by at least one processor, data representing a plurality of products, wherein each product represents a sports bet related to one or more sporting events;   generating, by the at least one processor, a buy queue and a sell queue to receive respective orders in a memory;   generating, by the at least one processor, a decision matrix in the memory;   broadcasting, by the at least one processor, the data representing the plurality of products to a plurality of computer devices;   receiving via a communications network, by the at least one processor, a request to place a first order for a first product of the plurality of products;   responsive to receiving the request, comparing, by the at least one processor, a risk value for the first order to a balance in an account associated with the first order;   utilizing, by the at least one processor, the decision matrix to determine whether to approve the first order based at least in part on comparing the risk value for the first order to the balance in the account;   inserting, by the at least one processor, the first order in the buy queue or the sell queue;   broadcasting via the communications network by the at least one processor an indication of the first order to the plurality of computer devices;   receiving via the communications network, by the at least one processor, a request to place a second order for the first product of the plurality of products;   inserting, by the at least one processor, the second order in the buy queue or the sell queue;   broadcasting by the at least one processor via the communications network to the plurality of computer devices an indication of the second order;   receiving via the communications network, by the at least one processor, a request to place a third order for the first product of the plurality of products;   inserting, by the at least one processor, the third order in the buy queue or the sell queue;   broadcasting, by the at least one processor, via the communications network to the plurality of the computer devices an indication of the third order;   matching, by the at least one processor, any of the first order, the second order, and the third order to each other, wherein the second order and the third order are on an opposite side of the first order;   executing, by the at least one processor, at least partially the first order;   executing, by the at least one processor, at least partially the second order; and   executing, by the at least one processor, at least partially the third order.   
     
     
         3 . The method of  claim 2 , wherein the first product comprises one of a plurality of types of products and further comprising determining a risk factor for the first product based at least in part on a type of the first product. 
     
     
         4 . The method of  claim 2 , further comprising determining, by the at least one processor, a risk value for the first order based at least in part on an estimated maximum tick liability associated with the first product. 
     
     
         5 . The method of  claim 4 , further comprising determining, by the at least one processor, the estimated maximum tick liability based at least in part on statistical data regarding the first product. 
     
     
         6 . The method of  claim 2 , further comprising determining, by the at least one processor, a risk factor for the first product based at least in part on an actual maximum tick liability associated with the first product and an estimated maximum tick liability associated with the first product. 
     
     
         7 . The method of  claim 6 , wherein determining the risk factor for the first product comprises selecting, by the at least one processor, the lower of the actual maximum tick liability and the estimated maximum tick liability associated with the first product as the risk factor for the first product. 
     
     
         8 . The method of  claim 2 , further comprising determining, by the at least one processor, a risk factor for the first product based at least in part on statistical data regarding the first product. 
     
     
         9 . The method of  claim 2 , wherein:
 the first order comprises a unit stake; and   the method further comprises:
 determining a risk factor for the first product; and 
 determining the risk value for the first order by multiplying the risk factor for the first product by the unit stake. 
   
     
     
         10 . The method of  claim 2 , further comprising:
 adjusting, by the at least one processor, one or more of the balances associated with the account based at least in part on (i) the risk value for the first order and (ii) executing the first order, the second order, and the third order.   
     
     
         11 . The method of  claim 10 , wherein the one or more sporting events have an overall duration, the method further comprising:
 updating, by the at least one processor, the risk value for the first order during the overall duration of the one or more sporting events; and   updating, by the at least one processor, one or more of the balances associated with the account based at least in part on the updated risk value for the first order.   
     
     
         12 . The method of  claim 11 , further comprising:
 assigning, by the at least one processor, a so-far value to the first product;   updating, by the at least one processor, the so-far value during the overall duration of the one more sporting events associated with the first product; and   updating, by the at least one processor, the risk value for the first order based at least in part on the so-far value assigned to the first product.   
     
     
         13 . The method of  claim 2 , further comprising:
 receiving, by the at least one processor, a request to place a second order regarding a second product of the plurality of products, the second order being at least partially defined by a stake;   adjusting, by the at least one processor, one or more of the balances associated with the account based at least in part on (i) the risk value of the first order and (ii) executing the first order, the second order, and the third order; and   reducing, by the at least one processor, the stake of the second order by an amount based at least in part on at least one of the adjusted balances.   
     
     
         14 . The method of  claim 2 , further comprising:
 receiving, by the at least one processor, a request to place a second order regarding a second product of the plurality of products, the second order being at least partially defined by a stake;   determining, by the at least one processor, a risk value for the second order;   adjusting, by the at least one processor, one or more of the balances associated with the account based at least in part on (i) the risk value of the first order and (ii) executing the first order, the second order, and the third order;   determining, by the at least one processor, whether to reduce the stake of the second order based at least in part on the risk value of the second order and at least one of the adjusted balances; and   reducing, by the at least one processor, the stake of the second order by an amount based at least in part on at least one of the adjusted balances.   
     
     
         15 . The method of  claim 2 , further comprising:
 receiving, by the at least one processor, a plurality of requests to place a plurality of orders including the first order, each request being made using the account, each of the plurality of orders being at least partially defined by a stake; and   for each order:
 determining, by the at least one processor, a risk value for the order; and 
 placing, by the at least one processor, the order. 
   
     
     
         16 . The method of  claim 15 , further comprising, for each order, determining, by the at least one processor, whether to approve the order based at least in part on the risk value determined for the order and one or more of the balances for the account, and wherein placing each order comprises placing, by the at least one processor, each approved order. 
     
     
         17 . The method of  claim 15 , further comprising:
 adjusting, by the at least one processor, one or more of the balances for the account based at least in part on (i) the risk value of the first order and (ii) executing the first order, the second order, and the third order; and   for each unmatched order of the plurality of orders:
 determining, by the at least one processor, whether to reduce the stake of the unmatched order based at least in part on the risk value of the unmatched order and at least one of the adjusted balances; and 
 reducing, by the at least one processor, the stake of the unmatched order by an amount based at least in part on at least one of the adjusted balances. 
   
     
     
         18 . A system, comprising:
 at least one processor; and   a memory electronically coupled to the at least one processor, wherein the memory stores instructions which, when executed by the at least one processor, direct the at least one processor to:   generate, in the memory, data representing a plurality of products, wherein each product represents a sports bet related to one or more sporting events that comprise a plurality of participants competing for finishing positions, each finishing position having a respective point value;   generate a buy queue and a sell queue to receive respective orders in the memory;   generate a decision matrix in the memory;   broadcast to a plurality of computer devices the data representing the plurality of products;   receive via a communications network a request to place a first order for a first product of the plurality of products,   responsive to receiving the request, compare a risk value for the first order to a balance in an account associated with the first order;   utilize the decision matrix to determine whether to approve the first order based at least in part on comparing the risk value for the first order to the balance in the account;   insert the first order in the buy queue or the sell queue;   broadcast by communications network to a plurality of the plurality of computer devices an indication of the first order;   receive via the communications network a request to place a second order for the first product of the plurality of products;   insert the second order in the buy queue or the sell queue;   broadcast via the communications network to the plurality of computer devices an indication of the second order;   receive via a communications network a third order for the first product of the plurality of products;   insert the third order in the buy queue or the sell queue;   broadcast via the communications network to the plurality of computer devices an indication of the third order;   match any of the first order, the second order, and the third order to each other, wherein the second order and the third order are on an opposite side of the first order;   execute at least partially the first order;   execute at least partially the second order; and   execute at least partially the third order   
     
     
         19 . The system of  claim 18 , wherein:
 the first product comprises one of a plurality of types of products; and   the instructions, when executed by the at least one processor, further direct the at least one processor to determine a risk factor for the first product based at least in part on a type of the first product.   
     
     
         20 . The system of  claim 18 , wherein risk value for the first order is determined based at least in part on an estimated maximum tick liability associated with the first product. 
     
     
         21 . The system of  claim 20 , wherein the estimated maximum tick liability is determined based at least in part on statistical data regarding the first product.