OMS Integration for Electronic Trading Marketplaces
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Solution Overview
Problem
Institutional traders face challenges in executing large trades without adversely affecting market prices, due to manual intervention requirements and lack of integration between order management systems (OMS) and electronic trading marketplaces, leading to market impact costs and reduced liquidity.
Innovation Solution
An automated system for transmitting orders from OMS to electronic trading marketplaces, enabling anonymous negotiations and executions, which reduces manual effort and enhances liquidity by directly interfacing with OMS databases to manage and execute trades within the electronic trading marketplace.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If traders manually transmit orders to electronic marketplaces using telephone or separate data entry links, then traders can execute trades, but manual intervention increases time consumption and reduces trading efficiency
Solution Approach 1:
The patent replaces manual mechanical transmission methods (telephone, separate data entry links) with an automated electronic interface that directly connects order management systems to electronic marketplaces, enabling automatic order transmission without human intervention
Solution Approach 2:
The system enables self-service by allowing the order management system to automatically transmit orders to electronic marketplaces without requiring trader intervention, and automatically receives trade confirmations back to the OMS
2Object-affected harmful factors
If traders spread large trade orders into small orders over several trading days, then market impact costs are reduced, but the extended trading period exposes traders to significant price changes due to unforeseeable market activities
Solution Approach 1:
The automated system provides real-time feedback by immediately transmitting order status and trade confirmations between the order management system and electronic marketplaces, allowing traders to monitor execution progress and respond to market conditions dynamically
Solution Approach 2:
The system enables dynamic adjustment of trade execution strategies by allowing traders to modify order parameters in real-time based on market conditions, rather than being locked into fixed multi-day schedules
3Ease of manufacture
If electronic marketplaces lack integration with order management systems, then marketplaces can operate independently, but traders must perform duplicate entry of basic order data already recorded in the OMS
Solution Approach 1:
The patent merges the order management system with the electronic marketplace interface by establishing a direct integration where the OMS can automatically transmit orders to and receive confirmations from electronic marketplaces, eliminating the need for separate manual data entry processes
Solution Approach 2:
The integrated system provides multi-functionality by enabling the order management system to handle multiple functions: recording orders, transmitting to marketplaces, receiving confirmations, and updating trade status, all through a single unified interface
4Reliability
If traders manually review and transmit orders from OMS, then traders have control over order execution, but the manual process creates opportunities for errors and reduces overall trading efficiency
Solution Approach 1:
The system replaces manual mechanical order transmission with automated electronic communication protocols that directly transfer order data between the OMS and electronic marketplaces, eliminating human error while maintaining execution control
Solution Approach 2:
The automated system incorporates feedback mechanisms where trade confirmations are automatically received and processed by the order management system, providing real-time verification of order execution and reducing errors through systematic validation
Data Source
AI summary
An electronic trading marketplace (ETM) communicates with interfacing modules interfacing directly with order management systems (OMS's) at trading institutions. The interfacing modules automatically transmit orders from the OMS databases to the ETM and update the OMS databases in response to orders executed at the ETM. Traders can communicate with the ETM to anonymously negotiate trades of securities.