An Order Execution System and Option Order for Financial Trading Transactions

Abstract

The invention relates to an order execution system and an optional trade order (OTO) that can be integrated into all types of exchanges and electronic trading brokerage systems used by companies providing liquidity in electronic environments and operating in financial markets, as well as by the customers of said companies, where financial trading transactions are carried out.

Description

1 TARIFF A System for Executing Orders in Financial Trading and Options Trading The order TECHNICAL FIELD The invention is for companies that provide liquidity in electronic environments and operate in financial markets. Financial trading used by and by the customers of the aforementioned companies all types of stock exchange and electronic trading brokerage transactions where these transactions are carried out. an order execution system and optional trading order that can be integrated into their systems This relates to Optional Trade Orders (OTO). PREVIOUS TECHNIQUE Today, market makers are institutions that play a key role in financial markets. or individuals and provide both buy and sell quotes for securities. They provide liquidity. Liquidity is the ability of an asset to be quickly and safely converted into cash without losing value. It is the capacity to be converted. Market makers can both buy and sell a particular security. When determining selling prices, it also manages the volume of these transactions. This activity involves 20 in the market. By ensuring the continuity of liquidity, investors can conduct transactions faster and at lower cost. This enables them to do so. Market makers profit from transactions by paying the difference between the buying and selling prices. They can generate profit through commissions. At the same time, they can also make transactions into their own accounts. They have the opportunity to do so. This is a significant opportunity that can increase their profitability. Clients trading with market makers can execute buy and sell transactions using different order types. It can be executed. One of these order types is the market order. A market order is an order that... Upon entering, it quickly starts with the best-priced offer available on the market. This is done. Customers can also place market orders with different validity periods. It can send options such as "Cancel if not fully completed" or "Cancel remainder". There are also different types of market orders available. These order types specify the price and volume at which the transaction will be made. By determining the transaction, the market maker ensures that the transaction is carried out according to the customer's request. between the organization executing the order and the customer regarding how these orders will be executed. Agreement exists. 35 Within the current market structure, market makers execute client orders on their own order boards. The market maker fulfills orders based on liquidity. As long as liquidity is sufficient, the market maker fully executes the order. 2 It can provide this. However, in situations where liquidity is insufficient, partial order approval or rejection may occur. They can provide this information. In addition, market makers often consider factors such as the direction and size of the incoming order. They are unable to make a choice based on the characteristics or their own risk appetite. This situation affects the market. This leads the builders to carry out orders that are not in their best interests. The same order might be more suitable for another market maker, presenting a profitable opportunity. 5 They can offer this. However, in the current system, market makers cannot exercise this kind of selectivity. There is no structure to provide this. Order types give the market maker a choice. Since it is not known, this selectivity is not possible under current market conditions. It is not. The situation where market makers are not given a choice of order types is a financial problem. This makes it difficult for them to trade optimally in the markets. At the same time, the overall state of the market... It also negatively affects its effectiveness. It allows market makers to make choices. If a structure is developed that benefits both market makers and investors... The system will be established. Such a structure will allow for more efficient use of liquidity in the market, 15 orders are executed more accurately and quickly, and market makers make more profitable trades. this enables them to do so and therefore provide cheaper services to their customers. It will provide. As a result of research conducted in the literature, the application number “2024 / 002676” and “CRYPTO CURRENCY 20 Turkish patent titled "MANAGEMENT SYSTEM FOR STOCK EXCHANGES AND PROJECTS" An application was found. This application concerns a single entity comprised of cryptocurrency projects and exchanges. It relates to the system that enables management via the panel. However, in the aforementioned application... companies that provide liquidity in electronic environments and trade in financial markets. 25 used by customers of the companies mentioned, for crypto or stock exchanges. No evidence of an integrated system has been found. Ultimately, the problems mentioned above, which cannot be solved with current technology, are the subject of this technical analysis. This has made it necessary to make an innovation in the field. BRIEF DESCRIPTION OF THE INVENTION 30 The present invention aims to eliminate the aforementioned disadvantages and introduce new technologies to the relevant technical field. It relates to an order execution system designed to provide advantages. The main purpose of the invention is to provide liquidity to companies in financial markets and to the 35 companies mentioned. all types of financial transactions used by customers 3 an order type that can be integrated into stock exchange and electronic trading brokerage systems The goal is to enable the creation. All the purposes mentioned above and those that will emerge from the detailed explanation below. The present invention, intended to be realized, involves the provision of liquidity by the market maker in 5 The order board displays buy and sell orders and the possible volumes for those orders. Includes an alternative order board that can be used as an alternative to the aforementioned order board, Companies that provide liquidity in electronic environments and trade in financial markets. Financial trading used by and by the customers of the aforementioned companies all types of stock exchange and electronic trading brokerage transactions where these transactions are carried out. trading orders issued to market makers in financial markets, which can be integrated into their systems. When this order is sent, the right to execute it is reserved regardless of the available liquidity or financial trading transactions that give market makers access to the market without any conditions attached. It is an order execution system and optional trading order, the feature of which is to provide liquidity. The transaction orders entered through the customer's transaction terminal are processed in accordance with the aforementioned liquidity level. Market makers who carry out these transactions use the system that facilitates interaction between the market makers and the customer, market maker, and order holder. The market maker system enables communication between the execution system and customer transactions. The market maker can enter information about the type of order, its characteristics, and where the order will be sent. In accordance with the order confirmation received from the system, the unexecuted portions of the aforementioned orders Customer transaction terminal, server, cloud system, 20 that enables sending to different market makers local devices, clients, or a customer and market maker system that can operate with a P2P architecture. standardized information communication carried out through the customer transaction terminal. the application programming interface that carries, runs on the market maker system, within When a transaction order arrives via the running software, how much of that order is executed? the market maker, regardless of liquidity, decides to execute the contract, market maker 25 the system allows the execution of the required quantity of the order received through it, by redirecting the order to the command board or an alternative command board, or by using the selectivity feature. using market makers to offer selective order types between market makers and their clients, market makers The system allows selective execution of orders for customer transaction requests received with the offered order type. 30 that provide lower cost service to customers working with the mentioned order type. It includes a decision-making unit. The best way to utilize the advantages of the existing invention, together with its structure and additional elements. For it to be understood, it must be considered together with the figures explained below. 35 BRIEF DESCRIPTION OF THE FIGURES 4 Figure 1 is a representative illustration of an order execution system that is the subject of the invention. The drawings do not necessarily need to be scaled and are necessary for understanding the invention. Details that are not present may have been overlooked. Furthermore, at least to a large extent... Elements that are identical or at least have substantially identical functions are numbered 5 times with the same number. It is shown. REFERENCE NUMBERS 1. Customer transaction terminal 10 2. Application programming interface 3. Market maker system 4. Decision-making unit 5. Board 6. Alternative Order Board 15 DETAILED DESCRIPTION OF THE INVENTION This detailed explanation describes an order for financial trading transactions, which is the subject of the invention. The execution system and optional transaction order (OTO) are only better understood in the 20th century. It is explained with examples that do not create any limiting effect on understanding. An example order fulfillment system, customer transaction terminal (1), application programming interface (2), market maker system (3), decision unit (4), order board (5) and alternative order It includes the board (6). Customer transaction terminal (1), type of transaction order of customers, characteristics, 25 where to send information and order confirmation from the market maker system (3) unexecuted portions of orders sent accordingly are distributed to different market makers. is the sending device. Application programming interface (2), server, cloud system, local devices, (3) clients of the client and market maker system that can work with clients or P2P architecture Communication 30 which carries information communication in a standardized way through the transaction terminal (1). It is a protocol. In the finance sector, it is commonly referred to as the FIX API (Financial Information Exchange). Application Programming Interface - Financial Information Exchange Application Programming Interface (2)) is used. FIX API is used for trading and sharing data in financial markets. It is a protocol used by financial institutions, exchanges, brokers, and other market operators. The FIX API is used by financial institutions, exchanges, brokers, and other market operators. It enables the rapid and reliable transmission of electronic messages among participants. 35 The market maker system (3) provides liquidity to the transactions entered through the customer transaction terminal (1). market makers are the institutions or individuals that execute orders in accordance with this liquidity. It is the system used. The decision unit (4) operates on the market maker system (3), within which When a transaction order arrives via the running software, how much of that order is executed? the market maker decides to execute the incoming order, regardless of liquidity. which allows it to fulfill the desired amount or, depending on the type of order, how to do it. The market makers who decide to send it to the order book receive 5 with the order type offered. It is the unit that allows the selection and execution of orders for customer transaction requests. Order The board (5) offers buy and sell orders with liquidity provided by the market maker. It is a dataset containing the volumes that can be executed for orders. Alternative order book (6), market where alternative liquidity is provided by the maker and orders are received with the OTO order type. The decision unit (4) can direct buy and sell orders and the 10 related to these orders. It is a dataset containing achievable volumes. Our invention is similar to the IOC (Immediate-Or-Cancel) order type. It shows this, but there are differences. In the IOC order type, the customer sends the order. He knows that the entire order amount may not be executed, but this order is given to the market maker for 15 When it arrives, the market maker uses all of the liquidity it provides to the customer to fulfill this order. It attempts to execute the transaction as long as the transaction order sent by the customer has liquidity. He knows that he will accomplish it. In the order type that is the subject of the invention (AUTO), the market maker, the market maker system (3) provides any amount of the order to the customer depending on the liquidity it provides It is not obliged to do so. Regardless of the liquidity it provides when it receives the order, 20 For any reason, it can fulfill the amount requested by this order. This is done in the decision unit (4) by redirecting the incoming order to the alternative order board (6) or by using the selective feature of the decision unit (4). This can be done by using [method]. In this way, the customer can give the market maker what they can do at that moment. An option is given, and the customer knows that this type of order works in this way. The invention is an order execution system for financial trading transactions. Optional trading order (OTO) allows market makers and their clients to select the optional order type (OTO) and its By presenting the transmission model, market makers process customer transaction requests with the offered order type. This allows market makers to selectively execute orders. They choose the situation that will be most efficient for them and in return, 30 people work with this order type. This allows them to provide lower-cost services to their customers. An order With the order type we specified in the execution system, the customer can operate in numerous markets. one or more of the constructors can be hierarchically ordered, and the order proposed by the invention By sending transaction orders to these market makers using this type of method, a cost advantage can be achieved. Existing In this system, market makers execute this order at the best price according to the liquidity they offer. 35 It is necessary, however, when sent with an order type through an order execution system. The market maker decides to what extent they want to execute this transaction order, and to what extent they don't. 6 can return the amount. In the model presented by the invention, the returned portion of the customer order. to the next market maker identified in the priority hierarchy by the system is being sent. An order execution system is, to some extent, like the options that exist in financial markets, a buy 5 This grants the right to buy or sell. However, the purchase or sale offered by the customer to the market maker... The right to sell is granted instantly. In return, the market maker will issue the order type mentioned in the agreement. When used, it can provide services at lower prices. A system for executing orders and optional trading orders for financial trading. 10 With (AUTO);  The invention is made by the customer who gives the transaction order through the customer transaction terminal (1) The type of transaction order is defined before the transaction is sent.  The command transmission protocols on the application programming interface (2) recognize this command type. and transmits it correctly to the market maker system (3). 15  The market maker system (3) recognizes the order type that is the subject of the invention and executes the transaction accordingly. It performs the desired amount and transmits the result via the customer transaction terminal (1).  Depending on whether the customer transaction order has been completed or partially completed If there is an unfulfilled portion, it is passed on to a different market maker. An order execution system and optional trading order for financial trading transactions. (OTO) is a different order execution agreement between the customer and the market maker. It offers this type of order. When a customer sends a transaction order with this order type, the transaction type is specified in the transaction type. The market maker selects the type of transaction that is the subject of the invention. This transaction order is between the customer and the market maker. Decision unit on application programming interface (2) (APIs) carrying transaction messages 25 (4) and are defined by connectors and correctly transmitted to each other. APIs They run on servers, and those servers host databases. The same APIs can also be integrated with the cloud system. Application programming interface (2) It may not only work on servers, but also on local devices, client-side, or P2P. It can also work in peer-to-peer architectures. Which case to use it in is specified in API 30. It depends on the purpose and the structure of the application. P2P (Peer-to-Peer) architecture has a central hub. devices (peers) on the network communicate directly with each other without needing a server. It is a network model. In this model, each device (peer) can function as both a client and a server. In other words, it can both request data and provide data. This is the most important aspect of P2P architecture. One of its features is that peers on the network are directly connected to each other and there is no central control. 35 The point is that it has no point. 7 The transaction order which is the subject of the invention reaches the market maker via the market maker system (3), market This gives the market maker the right to execute the order received. The market maker's transaction quantity and user information... and by using factors such as the risks on its own side, with an algorithm it has developed or this By executing the orders received in the order type on an alternative order board (6) He decides how much of the transaction he wants to carry out and sets the desired amount to 5 This process is carried out. The customer is asked to confirm this transaction via the existing communication protocol between them. It transmits. Communication protocols are sent via signals through servers. Customer If there is an unexecuted portion of the trading order, this order can be transferred to different market makers by the customer. using the application programming interface (2) located in the terminal (1) servers They can send and manage their commands through (not just servers). 10

Claims

8 REQUESTS 1.5  buy and sell orders are offered with liquidity provided by the market maker. Order board (5) showing the volumes that can be executed for orders.  which can be used as an alternative to the mentioned command board (5) and the decision unit Depending on how the algorithm works, it may include an alternative order board (6), Companies that provide liquidity in electronic environments and trade in financial markets 10 used by and by the customers of the mentioned companies, financial procurement all types of stock exchanges and electronic trading where sales transactions are carried out can be integrated into intermediary systems, enabling market makers to trade in financial markets. When the order is sent, the right to execute this order is independent of the available liquidity. financial 15 that is given to market makers as or without any conditions It is an order execution system for buying and selling transactions and an optional trading order, feature;  by providing liquidity to the transaction orders entered through the customer transaction terminal (1) Market makers who carry out their activities in line with the aforementioned liquidity,  Used by market makers and the customer, market maker and order execution 20 Market maker system (3) which enables communication of the system.  Information about the type and characteristics of the customer's transaction order, and where the order will be sent and in accordance with the order confirmation from the market maker system (3) the unexecuted portions of the aforementioned orders were given to different market makers. Customer transaction terminal (1) that enables sending, 25  capable of operating with servers, cloud systems, local devices, clients, or P2P architecture, customer and market maker system (3) through customer transaction terminal (1) an application that standardizes the information communication carried out. programming interface (2),  30 operating on the market maker system (3) through the software that runs within it When a transaction order arrives, it decides how much of that order will be executed. independent of liquidity, the market maker, through the market maker system (3) enabling the fulfillment of the quantity requested by the incoming order, the incoming order by directing to the order board (5) or alternative order board (6) or selectivity Using this feature, market makers and their clients can select the appropriate order type. 35 offering, market makers for customer transaction requests coming with the offered order type 9 enabling selective execution of orders, working with the aforementioned order type. decision unit that provides lower cost service to customers (4) It includes.

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