Dynamic Pricing Trading Proposals Reference Indices
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Solution Overview
Problem
Current trading systems lack the ability to dynamically adjust pricing and conditionally manage trading proposals based on reference indices, limiting flexibility and efficiency in financial interest trading.
Innovation Solution
The system associates trading proposals with reference indices, allowing price terms to be dynamically tied to these indices, enabling conditional availability and suspension of trades based on specified relationships, and automatically updating prices using various mathematical operators and operands.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If trading proposals are made static with fixed pricing, then system simplicity is maintained, but trading flexibility and adaptability to market conditions deteriorates
Solution Approach 1:
The patent implements dynamic pricing by associating trading proposals with reference indices, allowing prices to automatically adjust based on market conditions. The system transitions from static fixed pricing to dynamic indexed pricing, where proposal prices float with the reference index according to specified relationships, thereby improving trading flexibility without requiring complex manual intervention
Solution Approach 2:
The system changes the pricing parameter from fixed values to variable values tied to reference indices. By modifying how prices are determined (from static assignment to dynamic calculation based on index relationships), the system achieves greater adaptability while maintaining automated processing that prevents excessive complexity
2Reliability
If all trading proposals are continuously available, then trading efficiency is maximized, but risk management and conditional control deteriorates
Solution Approach 1:
The patent applies preliminary action by establishing conditional rules in advance that automatically suspend or reinstate trading proposals based on reference index relationships. Traders pre-specify conditions under which their proposals should be suspended or made available, allowing the system to automatically enforce risk management protocols without manually reviewing each trade, thus maintaining both reliability and productivity
Solution Approach 2:
The system implements feedback mechanisms by continuously monitoring reference indices and automatically adjusting proposal availability based on specified relationships. When market conditions change (feedback from index movements), the system responds by suspending or reinstating proposals, creating a closed-loop control system that balances risk management with trading efficiency
3Extent of automation
If manual price adjustment is used, then pricing control is maintained, but automation and execution speed deteriorates
Solution Approach 1:
The patent implements self-service pricing where the system automatically adjusts proposal prices based on reference index relationships without requiring manual intervention. The automated system calculates and updates prices in real-time as indices change, eliminating the time loss associated with manual price adjustments while maintaining precise control through pre-specified indexing relationships
Data Source
AI summary
Programs, methods, and systems for variable pricing and conditional availability of proposals for trading of financial interests through the use of reference indices. The invention provides programs, methods, and systems for associating a proposal for a trade in at least one financial interest with at least one other financial interest or index, which may serve as a reference for effecting a condition of the proposal, including for example an availability of terms for the proposal to other traders, the executability of the proposal, etc.