Synthetic Order Manager for Linked Trading Orders
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Solution Overview
Problem
In electronic trading, traders face challenges in efficiently managing and linking orders across multiple exchanges to optimize trading strategies, particularly in reacting to market data and maintaining synchronized order updates without manual intervention.
Innovation Solution
A synthetic order manager system that allows traders to link orders, form order cancel order (OCO) pairs, and dynamically manage these orders across exchanges, updating quantities based on partial fills and predefined ratios, while also enabling conditional submissions and automatic adjustments based on market data.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If traders manually manage and update orders across multiple exchanges, then order management can be performed with full control, but trading efficiency is reduced and manual intervention is required
Solution Approach 1:
The system enables automatic order management where the electronic device autonomously links orders across exchanges, updates order quantities based on partial fills, and manages OCO pairs without requiring continuous manual trader intervention. The system self-updates order states and synchronizes across multiple exchanges automatically.
2Speed
If traders manually update order quantities and manage synchronized updates across exchanges, then precise control over order parameters is maintained, but time consumption increases and trading speed is reduced
Solution Approach 1:
The system pre-establishes order links and synchronization rules before trading occurs. When market conditions trigger an order update, the system has already configured the linkage relationships and can immediately execute synchronized updates across all linked orders and exchanges without manual intervention, reducing reaction time.
3Adaptability or versatility
If traders manage complex linked orders and OCO pairs across multiple exchanges, then trading strategy flexibility is improved, but system complexity increases
Solution Approach 1:
The electronic device implements a universal order management system that handles multiple order types (OCO pairs, linked orders), works across multiple exchanges simultaneously, and manages various trading strategies through a single platform. This multi-functional approach consolidates complexity into one system rather than requiring separate management for each exchange or order type.
4Reliability
If real-time synchronization of order updates is implemented across multiple exchanges, then order consistency is maintained, but system complexity and computational requirements increase
Solution Approach 1:
The system establishes feedback loops where order updates from any exchange are automatically detected and propagated to all linked orders. When an order state changes on one exchange, the system receives feedback about this change and automatically synchronizes the update across all connected exchanges, maintaining consistency through automated feedback-driven updates.
Data Source
AI summary
A system and method for linking and managing linked orders are described. According to one method, a trader may first link two or more orders into a linked order, and then one or more parameters associated with one of the orders may be dynamically changed based on user inputs or information being received from an exchange. For example, a trader may link any two orders as an order cancel order, and each linked order may be associated with the same or different tradable objects, order quantities, and may be submitted to one or more exchanges. The order quantities may be then dynamically updated based on updates being received from the one or more exchanges and further based on a quantity ratio between the two orders. Further, the linked order may be submitted upon detecting a fill for another order.