Matching computer of a negotiated matching system

Abstract

A matching computer is provided for a negotiated matching system that includes a plurality of remote terminals associated with respective potential counterparties, a communications network for permitting communication between the remote terminals, and the matching computer. Each user enters first parameters for a trading instrument into his or her remote terminal. The matching computer uses the trading parameters from each user to identify potential transactions between counterparties that are mutually acceptable based on the first parameters, thereby matching potential counterparties to a potential transaction. Once a match occurs, the potential counterparties can transmit negotiating messages to negotiate some or all terms of the transaction. Thus, the matching computer first matches potential counterparties who are acceptable to each other based on first trading parameters, and then enables the counterparties to negotiate and finalize the terms of a transaction.

Description

CROSS-REFERENCE TO RELATED CASES [0001] This application is a continuation of U.S. application Ser. No. 10 / 266,939 filed Oct. 9, 2002, pending application; which is a continuation of U.S. Ser. No. 09 / 313, 216 filed May 18, 1999, abandoned; which is a divisional of U.S. Ser. No. 08 / 475,499 filed Jun. 7, 1995, patented, which are expressly incorporated herein by reference.FIELD OF THE INVENTION [0002] The present invention relates to a matching computer of a negotiated matching system that identifies potential counterparties to a transaction using criteria input by each user of the system and then reveals the identity of the counterparties so that the counterparties may negotiate the final terms and / or details of the transaction. BACKGROUND OF THE INVENTION [0003] Automated dealing systems (e.g., for trading currencies, commodities, and the like) are increasingly replacing the conventional manner of dealing using a broker as an intermediary. When a broker is used to complete a transac...

AI Technical Summary

Benefits of technology

[0016] A benefit of a matching computer of the negotiated matching system according to embodiments of the present invention may be that the complex and confidential credit evaluation and risk management procedures of various financial institutions may be taken off line completely and left up to each individual party. This can greatly simplify the system needed to accommodate numerous financial institutions, may not require standardiz

Problems solved by technology

However, the known automated trading systems are not capable of accommodating types of financial instruments that are traded using more subjective, less-quantifiable criteria.

For example, known automated trading systems do not provide traders with the opportunity to filter out potential deals with other traders who may be unacceptable trading partners on the basis of subjective criteria other than the party's credit, for example, geographic location or political or other competitive criteria.

Second, the marketplace may create new, non-standardized types of trading instruments to fit its specific needs.

The known electronic trading systems are not capable of accommodating these non-standardized trading instruments because the instrument specifications in these systems are pre-defined based on standardized trading instruments.

Third, in the known automated trading systems, once a trader has entered a bid or offer, the trader no longer has the discretion of negotiating the entered terms of the bid or offer.

The known systems provide no means by which a trader can input a mere “expression of interest” in a particular transaction wherein the trader need not provide predefined objective criteria which would make the expression of interest firm.

These systems do not provide a means by which two parties who are potentially interested in dealing with one another may be introduced to one another based on preliminary information input into the system, and then allowed to negotiate the terms of a transaction using a communication link.

Fourth, the known automated trading systems cannot accommodate credit-complex trading instruments.

Credit-complex trading instruments are those for which the calculation of a trading party's risk or exposure at a given time is based on multiple elements and is therefore too complex to integrate into a large-scale trading system.

Credit r

Images