Trading orders with decaying reserves

Abstract

In various embodiments, an apparatus includes a processor and a memory. The memory is communicatively coupled to the processor. The memory stores software instructions that, when executed by the processor, cause the processor to receive a trading order for a particular quantity of a trading product. The trading order specifies that a first portion of the particular quantity is a displayed quantity and that a second portion of the particular quantity is a reserved quantity. The trading order specifies at least one of a decay rule, a decay interval, a decay rate, decay quantity, and one or more conditions. The software instructions, when executed by the processor, cause the processor to cause the reserved quantity to decay based at least in part on at least one of the decay rule, the decay interval, the decay rate, and the decay quantity, and one or more conditions.

1 . An apparatus, comprising:
 a memory operable to store a trading order for a particular quantity of a trading product, in which a first portion of the particular quantity is a displayed quantity, and a second portion of the particular quantity is a reserved quantity;   a processor communicatively coupled to the memory and operable to:   receive the trading order from a trader;   identify a decay rule stored in the trading order, in which the decay rule is associated with at least one of the trader and the trading product, and in which the decay rule specifies at least two of a decay rate, a time interval, and a decay quantity;   disclose the displayed quantity of the trading order to one or more market centers;   receive a counterorder for another particular quantity of the trading product;   determine that the counterorder matches the trading order;   fill the displayed quantity of the trading order with at least a portion of another particular quantity of the counterorder;   determine that the reserved quantity of the trading order is greater than zero;   replenish the displayed quantity of the trading order with a portion of the reserved quantity of the trading order, in which a remaining portion of the reserved quantity is left over after replenishing the displayed quantity;   determine that the remaining portion of the reserved quantity of the trading order is greater than zero; and   reduce the remaining portion of the reserved quantity in accordance with the decay rule, in which any replenishing of the displayed quantity of the trading order occurs independently of reducing the remaining portion of the reserved quantity in accordance with the decay rule.