Multi-Dimensional Order Message Interface for Commodity Matching
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Solution Overview
Problem
Existing data transaction processing systems struggle to efficiently transact non-standard commodities due to their varied attributes, leading to inefficient pricing and matching mechanisms, manual negotiation, and lack of electronic central-limit trading, particularly in markets for physical commodities like crude oil and iron ore.
Innovation Solution
Implementing multi-dimensional order messages that define a participant's evaluation of commodities through functions for multiple attributes, allowing for efficient matching and transaction processing by comparing price frontiers, reducing computational resources and network congestion.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If multi-dimensional order messages with price frontiers are implemented, then granular pricing and matching efficiency is improved, but message complexity and data transmission overhead increase
Solution Approach 1:
The patent segments the complex multi-dimensional pricing information into hierarchical components: price frontiers that define value relationships across multiple attributes, and discrete price points derived from those frontiers. This segmentation allows the system to process and transmit pricing data in manageable units while maintaining the ability to represent complex commodity valuations.
Solution Approach 2:
The patent uses price frontiers as abstract representations that can be copied and reused across multiple transactions. Instead of negotiating individual price points for each transaction, participants can reference established price frontiers that capture their valuation methodology, reducing repetitive communication overhead while maintaining pricing granularity.
2Speed
If electronic central-limit trading is implemented for nonstandard commodities, then market transparency and trading speed are improved, but system complexity and computational requirements increase
Solution Approach 1:
The patent transforms the trading system by changing from standardized parameter matching to multi-dimensional parameter evaluation. Price frontiers enable the system to evaluate commodities across multiple attributes simultaneously (quality, quantity, delivery terms, etc.), allowing electronic trading of nonstandard commodities without requiring full standardization, thus maintaining trading speed while accommodating product diversity.
Solution Approach 2:
The patent adds dimensional complexity to price representation by introducing price frontiers that span multiple commodity attributes simultaneously. This dimensional expansion allows the system to handle nonstandard commodities with varied specifications by evaluating them across multiple dimensions rather than requiring standardization across all attributes, enabling electronic trading of diverse products.
3Measurement precision
If manual negotiation is used for nonstandard commodities, then pricing accuracy reflects buyer-seller needs, but transaction time and operational costs increase
Solution Approach 1:
The patent incorporates feedback mechanisms where price frontiers are established based on participant valuations and can be updated as market conditions change. The system uses this feedback to automatically adjust price points and facilitate matching, maintaining pricing accuracy that reflects current buyer-seller needs while eliminating the time-consuming iterative negotiation process through automated price discovery.
Solution Approach 2:
The patent enables preliminary establishment of price frontiers that capture participant valuation methodologies before actual transactions occur. By pre-defining how different commodity attributes are valued through price frontiers, the system eliminates the need for time-consuming negotiation during the transaction process, as the pricing framework is already in place to evaluate and match commodities efficiently.
Data Source
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.