Confirmation Period for Dynamic Trading Order Adjustments

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Solution Overview

Problem

Existing electronic trading systems face challenges in managing dynamic trading tools that adjust quoting quantities in response to market conditions, leading to excessive fees and loss of queue positions due to overreacting to brief market fluctuations.

Innovation Solution

Implementing a confirmation period during which detected market conditions are reevaluated to determine if they persist, thereby preventing unwanted adjustments and maintaining queue positions.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Speed

If dynamic trading tools immediately adjust quoting quantities in response to market conditions, then the system responds quickly to market changes, but it causes excessive fees and loss of queue positions due to overreacting to brief fluctuations

Engineering Contradiction:

Improveresponse speed to market conditionsVSAvoidexcessive fees and queue position loss

Core Design Contradiction:

SpeedVSLoss of energy

Solution Approach 1:

The system implements a confirmation period before executing order adjustments. When a market condition triggers an adjustment, the system waits for a predetermined confirmation period to elapse before actually modifying the order. This preliminary waiting action prevents impulsive reactions to transient market fluctuations while still allowing responsive adjustments to sustained conditions.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The system uses periodic reevaluation of market conditions during a confirmation period rather than immediate continuous adjustment. By checking whether triggering conditions persist over a defined time period, the system transforms instantaneous reactive adjustments into periodic evaluated adjustments, reducing unnecessary trading actions.

Inventive Principle:

Principle #19Periodic action

2Adaptability or versatility

If the system frequently adjusts and cancels orders to maintain optimal positioning, then it adapts to market changes, but it incurs unnecessary fees and loses queue positions

Engineering Contradiction:

Improveadaptability to market changesVSAvoidfees and queue position loss

Core Design Contradiction:

Adaptability or versatilityVSObject-generated harmful factors

Solution Approach 1:

Before executing order adjustments or cancellations, the system implements a confirmation period during which it verifies that triggering market conditions persist. This preliminary verification prevents unnecessary adjustments caused by transient conditions, thereby reducing associated fees and queue position losses while maintaining adaptability to genuine market changes.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The system continuously monitors market conditions and provides feedback on whether triggering conditions persist throughout the confirmation period. This feedback mechanism allows the system to distinguish between temporary fluctuations and sustained market changes, adjusting orders only when feedback confirms persistent conditions, thus avoiding harmful frequent adjustments.

Inventive Principle:

Principle #23Feedback

3Productivity

If the system reacts immediately to detected market conditions, then it captures trading opportunities, but it overreacts to brief outliers and makes unwanted adjustments

Engineering Contradiction:

Improvetrading opportunity captureVSAvoidaccuracy of market condition detection

Core Design Contradiction:

ProductivityVSReliability

Solution Approach 1:

The system implements a confirmation period as a preliminary verification step before executing trades based on detected market conditions. This preliminary action filters out false signals from brief outliers by requiring conditions to persist throughout the confirmation period, thereby improving the reliability of trading decisions without significantly delaying response to genuine opportunities.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The confirmation period acts as an intermediary mechanism between market condition detection and order execution. Rather than directly translating detected conditions into immediate trades, the system uses this intermediate time period to verify persistence, thereby mediating between raw market signals and final trading actions to improve accuracy.

Inventive Principle:

Principle #24Intermediary (Mediator)

Data Source

PatentUS20250156951A1Systems and Methods for Implementing a Confirmation Period

Publication Date: 2025.05.15 TRADING TECHNOLOGIES INTERNATIONAL INC

AI summary

Systems and methods for implementing a confirmation period are disclosed. An example method includes identifying a market condition associated with a quantity of a tradeable object of a trading strategy, wherein the market condition triggers an adjustment to the trading strategy; initiating a confirmation period in response to the market condition; when a reevaluation of the market condition during the confirmation period indicates that the market condition has ceased, preventing the adjustment to the trading strategy; and when the market condition persists throughout the confirmation period, proceeding with the adjustment to the trading strategy.