Trade Management Service API for Credit Derivatives

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Solution Overview

Problem

Current systems for credit derivative brokerage services are limited in capturing market data, processing client orders, and supporting complex trading activities such as options and spreads, and lack flexibility in reporting and order management, including 'one-cancels-other' functionality and electronic trade confirmation.

Innovation Solution

A system that integrates pre-trade, trading, and post-trade activities with a Trade Management Service (TMS) API, enabling brokers to manage orders, execute transactions, and store market data, while providing real-time accessibility, high availability, and strong transaction security, and supporting features like 'one-cancels-other' and electronic trade confirmations.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Adaptability or versatility

If a trading platform integrates pre-trade, trading, and post-trade activities with comprehensive market data capture, then the system's functionality and adaptability improve, but the device complexity increases

Engineering Contradiction:

Improveplatform flexibilityVSAvoidsystem complexity

Core Design Contradiction:

Adaptability or versatilityVSDevice complexity

Solution Approach 1:

The system is divided into distinct modular components including a market data capture module, trade management service module, order processing module, and reporting module. Each module handles specific functions independently, allowing the system to achieve comprehensive functionality while maintaining manageability through clear separation of concerns. The trade management service API serves as an intermediary that coordinates between these modules.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The trade management service is designed as a universal platform that handles multiple trading activities (credit default swaps, options, spreads) and provides integrated pre-trade, trading, and post-trade services through a single system. The platform uses standardized data structures and processing mechanisms that can accommodate various financial instruments and trading scenarios, reducing overall system complexity while maintaining versatility.

Inventive Principle:

Principle #6Universality (Multi-functionality)

2Loss of information

If the system captures all market data and provides comprehensive reporting capabilities, then the information completeness improves, but the processing time and system resource usage increase

Engineering Contradiction:

Improvemarket data captureVSAvoidprocessing time

Core Design Contradiction:

Loss of informationVSLoss of time

Solution Approach 1:

The system performs preliminary processing and filtering of market data as it is captured, identifying and prioritizing significant market movements before full processing. The trade management service pre-structures incoming data according to standardized formats, enabling faster subsequent processing and reporting generation without losing information完整性.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The trade management service API acts as an intermediary layer between market data capture and detailed processing systems. It aggregates and standardizes market data, presenting processed information to reporting modules while filtering out redundant data, thus maintaining information completeness while reducing processing time for end-user applications.

Inventive Principle:

Principle #24Intermediary (Mediator)

3Adaptability or versatility

If the system supports complex trading activities like options and spreads with additional attributes and criteria, then the trading capability improves, but the order management complexity increases

Engineering Contradiction:

Improvetrading capabilityVSAvoidorder management complexity

Core Design Contradiction:

Adaptability or versatilityVSDevice complexity

Solution Approach 1:

The system manages complexity by dynamically adjusting processing parameters based on the type of trading activity. For complex instruments like options and spreads, the trade management service activates specific processing rules and validation criteria while keeping other parameters at default levels. This selective parameter activation enables sophisticated trading capabilities without permanently increasing system complexity for all operations.

Inventive Principle:

Principle #35Parameter changes

4Reliability

If the system provides real-time accessibility and high availability with strong transaction security, then the service reliability improves, but the system resource consumption increases

Engineering Contradiction:

Improveservice availabilityVSAvoidresource consumption

Core Design Contradiction:

ReliabilityVSUse of energy by moving object

Solution Approach 1:

The system implements periodic security validation and authentication checks rather than continuous verification for all transactions. The trade management service uses session-based security where initial authentication establishes a trusted session, reducing resource consumption while maintaining strong security. Critical transactions trigger additional validation cycles, balancing reliability with resource efficiency.

Inventive Principle:

Principle #19Periodic action

Data Source

PatentUS10832321B2Apparatus, method and system for providing an electronic marketplace for trading credit default swaps and other financial instruments, including a trade management service system

Publication Date: 2020.11.10 GFI GROUP INC

AI summary

A method and system for providing integrated credit derivative brokerage services, the method or system including or using a credit trading arrangement, a credit trade capture arrangement, a trade management service arrangement to process trade data for the credit trading arrangement and the credit trade capture arrangement, and a central repository arrangement to store market data and shared reference data.