Method and apparatus for trading securities or other instruments
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a technology of securities or other instruments, applied in the direction of instruments, special data processing applications, electric digital data processing, etc., can solve the problems of inability to secure the best execution for customers, inefficient from a transaction cost perspective, and many limitations of the traditional method of executing orders
Inactive Publication Date: 2005-09-01
FOLIOFN
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[0009] Embodiments of the present invention allow investors to place orders specified by their value, rather than only by share amounts. Embodiments of the present invention also provide a method for processing trading orders in at least one instrument, in which orders m...
Problems solved by technology
There are several limitations to this traditional method of executing orders to trade securities.
First, they are relatively inefficient from a transaction cost perspective.
Second, this method does not always secure the best execution for customers.
Third, the traditional method requires investors to trade in share amounts, rather than dollar amounts.
Typically, however, the investor has only a rough idea of what the execution price will be.
Even under a limit order, however, the investor will not know the dollar am...
Method used
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[0013] Although the embodiments of the present invention are described herein in terms of orders to buy shares of stock, the present invention can be equally applicable to orders to buy any instrument representing an underlying tradable asset or liability, including, but not limited to government bonds, Treasury-bills, shares in mutual funds, shares in investment trusts, derivatives, investment contracts, bearer bonds, mutual funds, bank notes, insurance contracts, letters of credit, etc. Furthermore, although the embodiments of the present invention are described in terms of dollars, the present invention can be equally applicable to transactions in any currency or denomination or other variable that is deterministically convertible to a number of shares. In fact, one aspect of the present invention provides certain advantages for processing of orders received in multiple currencies.
Overview
[0014] Referring to FIG. 1, shown therein is an exemplary embodiment of a system 10 for c...
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Abstract
A method and apparatus for trading securities trades on behalf of customers expressing orders in both share and dollar amounts. Where a brokerage receives orders from customers in both dollar and share amounts, the brokerage can combine the orders, e.g., by aggregating and netting, and executing the outstanding orders through a market maker. The number of shares to order through the market maker depends on the price at which the market maker can execute. By capturing the spread, the spread can be equitably distributed among buyers and sellers without regard for whether the order was received as a value-based order or a share-based order.
Description
RELATED APPLICATIONS [0001] This is a continuation of U.S. patent application Ser. No. 09 / 516,787, filed on Mar. 1, 2000, which is a continuation-in-part of U.S. patent application Ser. No. 09 / 139,020, filed on Aug. 24, 1998, issued as U.S. Pat. No. 6,601,044, which is a continuation-in-part of U.S. patent application Ser. No. 09 / 038,158, filed on Mar. 11, 1998, pending. Both U.S. patent application Ser. Nos. 09 / 038,158 and 09 / 139,020 disclose a portfolio manager for creating and managing portfolios of securities, in which, among other things, trades are aggregated and netted prior to executing certain types of securities trades. The U.S. patent application Ser. Nos. 09 / 038,158 and 09 / 139,020 are hereby incorporated by reference, as if repeated herein in its entirety, including the drawings.BACKGROUND OF THE INVENTION [0002] The present invention relates generally to methods and apparatuses for trading securities or other instruments on behalf of investors, and more particularly to ...
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Application Information
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