Multi-Dimensional Commodity Order Books for Automated Matching
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Solution Overview
Problem
Existing data transaction processing systems struggle to efficiently transact non-standard commodities due to their non-uniform specifications, leading to inefficiencies in pricing and matching, as well as manual and bespoke negotiation processes, which are not easily systematized, especially in markets for physical commodities like crude oil and iron ore.
Innovation Solution
A multi-dimensional order message system that allows participants to submit orders defining a set of price points for various attributes of commodities, enabling the exchange computing system to match these orders efficiently by comparing price frontiers and reducing the need for individual negotiations.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If traditional standardized product trading is used, then market liquidity and transaction efficiency are improved, but adaptability to non-standard commodities is lost
Solution Approach 1:
The patent segments the product specification into multiple independent dimensions (quality attributes, quantity attributes, temporal attributes, spatial attributes). Each dimension can be independently defined and traded, allowing the system to handle non-standard commodities by combining different specification levels without requiring complete standardization.
Solution Approach 2:
The patent introduces multi-dimensional ordering where orders are not just single-price points but define price frontiers across multiple dimensions. This transforms the traditional one-dimensional price axis into a multi-dimensional specification space, enabling efficient matching of non-standard commodities by comparing their multi-dimensional price frontiers.
2Measurement precision
If manual negotiation processes are used for non-standard commodities, then pricing precision is improved, but processing time and system complexity increase
Solution Approach 1:
The patent replaces manual negotiation mechanisms with automated electronic matching systems. The multi-dimensional order book automatically compares price frontiers of opposing orders and executes matches without human intervention, maintaining pricing precision while dramatically reducing processing time and system complexity.
Solution Approach 2:
The system enables self-service matching where orders automatically find counterparts based on their multi-dimensional price frontiers. The electronic matching engine performs the negotiation and matching functions that would otherwise require manual intervention, allowing the market to self-regulate and self-match efficiently.
3Measurement precision
If detailed multi-dimensional specifications are provided, then matching precision is improved, but computational resources and network load increase
Solution Approach 1:
The patent merges multiple individual order specifications into consolidated price frontier representations. Instead of processing every individual order detail separately, the system aggregates orders into multi-dimensional price frontier structures that capture the essential matching information, reducing computational load while maintaining matching precision.
Solution Approach 2:
The patent changes the representation parameters from detailed individual order specifications to aggregated price frontier functions. This transformation allows the system to work with simplified mathematical representations (price frontiers) rather than raw order data, significantly reducing computational requirements while preserving matching accuracy.
4Ease of operation
If standardized products are used, then ease of operation is improved, but flexibility for customized transactions is reduced
Solution Approach 1:
The patent introduces dynamic specification capabilities where product parameters can be flexibly adjusted based on market needs. The multi-dimensional order book allows participants to define custom specifications on the fly while maintaining the benefits of electronic trading, making the system both easy to operate and highly adaptable to customized transactions.
Data Source
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Figure 3A~3C
AI summary
Systems and methods are provided for processing multi-dimensional orders. A data transaction request message is received at a data transaction system. The data transaction request message includes data representative of at least a first function for a first attribute of a commodity and a second function for a second attribute of the commodity. The data transaction system identifies a set of solutions described by the first function and the second function. The set of solutions including values for different variations of the object that the participant who submitted the data transaction request message is willing to offer or receive for the respective variation. The data transaction system attempts to match one or more of the values from the set of solutions to previously received but unsatisfied electronic data transaction request messages counter thereto stored in an order book data structure.