Automated Trading System Resubmits Unmatched Linked Amounts
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Solution Overview
Problem
Existing automated trading systems are limited in their ability to effectively manage and resubmit unmatched hidden or linked amounts, requiring traders to manually resubmit these amounts as new quotes, which is time-consuming and may result in unfavorable pricing due to rapidly changing markets.
Innovation Solution
The system automatically resubmits unmatched linked amounts as fresh quotes, with the option to specify a visible amount limit, allowing traders to maintain their interest concealed while ensuring the entire trading amount can be dealt without losing time priority, and reverses the matching order to prioritize hidden amounts over visible amounts.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of information
If traders manually resubmit unmatched linked amounts as new quotes, then market secrecy is maintained, but trading efficiency deteriorates and time is lost
Solution Approach 1:
The system automatically resubmits unmatched linked amounts as new quotes without requiring manual trader intervention. The trading system performs the resubmission service itself, maintaining market secrecy while eliminating the time loss and inefficiency of manual resubmission.
2Ease of operation
If traders manually resubmit unmatched linked amounts, then control over quote submission is maintained, but time priority is lost due to market changes
Solution Approach 1:
The system automatically resubmits unmatched linked amounts immediately without delay, preserving the time priority that would otherwise be lost. By performing the resubmission action preliminarily and automatically, the system maintains both trader control and time sensitivity.
3Loss of information
If linked amounts are matched before visible amounts, then hidden trading interests are protected, but matching complexity increases
Solution Approach 1:
The quote amount is segmented into visible amounts and linked amounts, with distinct matching rules applied to each segment. Linked amounts are matched first to protect hidden trading interests, then visible amounts are matched. This segmentation allows the system to handle the increased matching complexity through structured processing.
Data Source
AI summary
Quotes entered into an automated trading system may comprise a visible, or primary, amount, and a linked or hidden amount. The visible amount only is shown to other traders on the system but part or all of the linked amount may be dealt if the order with the quote is match is for an amount greater than the visible amount. If, after matching and deal confirmation, all the visible amount has been dealt, but some or all of the linked amount remains, a fresh order for the remaining linked amount is generated and submitted to the trading system for matching. The new quoted may be visible only or may have a visible component up to a limit specified by the maker on submission of the original quote, with the remainder being linked. Maker quotes converted to taker quotes by an auto-match routine may be resubmitted for undealt linked amounts in the same way. In one aspect of the invention, linked amounts are matched and dealt before visible amounts.