Electronic Auction Order Verification for Liquidity Preservation
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Existing electronic trading systems struggle with efficiently handling electronic messages for electronic auctions, particularly in identifying and verifying order messages, leading to unnecessary halting or canceling of auctions, decreased liquidity, and increased unmatched orders, which drain computer resources and result in inaccurate matching.
Innovation Solution
A system and method for verifiable order message handling that allows entities with unregistered securities to participate in electronic auctions by verifying order characteristics, ensuring they meet predetermined conditions, thereby preventing auction halts and increasing liquidity.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If existing electronic trading systems verify order characteristics to ensure proper order data, then order accuracy is improved, but processing time increases and auction efficiency deteriorates
Solution Approach 1:
The system performs preliminary identification and verification of order message characteristics before the auction process begins. By pre-validating order data format, completeness, and parameter correctness, the system ensures that only properly formatted orders enter the auction pipeline, eliminating the need for time-consuming verification during the auction itself and thus resolving the contradiction between verification accuracy and processing efficiency
2Reliability
If existing systems halt or cancel auctions due to improper order data, then order quality is improved, but liquidity decreases and computer resources are wasted
Solution Approach 1:
The system extracts and filters out only the essential verification characteristics needed for order validity (format, completeness, parameter correctness) while separating these from the auction execution process. By extracting verification to a preliminary filtering stage, the system prevents improper orders from entering the auction without unnecessarily halting or canceling auctions due to minor data issues, thus maintaining both order quality and liquidity
3Quantity of substance
If existing systems store and further process unmatched orders, then order completeness is improved, but computer resources are drained and matching accuracy decreases
Solution Approach 1:
The system performs preliminary verification of order characteristics before matching, ensuring that only orders with complete and correct data enter the matching process. By pre-validating order parameters and data completeness, the system reduces the number of unmatched orders that require storage and reprocessing, thereby reducing computer resource consumption while maintaining order completeness through initial validation
Data Source
AI summary
Verifiable order message handling for electronic auctions. Electronic order messages are received, with at least one message including an order of a predetermined type having sell order information associated with an entity having securities not previously registered for transactions. Requests for participation in an electronic auction are identified from among the messages. The requests include auction-only order information, with at least one request including the order of the predetermined type. It is determined whether the sell order information in the order of the predetermined type meets a predetermined auction condition based on an auction price. When the sell order information meets the predetermined auction condition, the order is permitted to participate in the electronic auction, such that the order is executed in full in the electronic auction. When the sell order information does not meet the predetermined auction condition, the electronic auction is canceled.