Method and system for tracking derivatives positions and monitoring credit limits

Abstract

A derivatives position tracking system that consists of a centralized trading engine with a trade history database capable of communication with a plurality of counterpart computers via a network to enable the execution of a derivatives transaction. The trading engine and counterpart computers enable the counterpart computers to initiate, unwind and assign requests. Upon execution of a tear-up or assignment, a record of such transaction is stored in the trade history database. Whether or not the tear-up or assignment is executed with the original counterpart, the original counterpart receives a notification of the tear-up/assignment and a new position with the counterpart is reflected in the position-tracking database. Additionally, a credit monitoring module can be used in connection with the derivatives position tracking system to enable the trading engine to alert counterparts when a derivatives transaction exceeds a pre-defined credit limit.

1 . An automated method for monitoring a set of existing derivatives transactions executed between counterparts, comprising the steps of: 
 receiving a first signal indicative of a trade request from a customer concerning an existing derivatives transaction between the customer and a first dealer;    receiving a second signal indicative of an offer to execute a new derivatives transaction from the one or more dealers that corresponds to the existing derivatives transaction;    receiving a third signal indicative of an acceptance of the offer; and    storing a record of the new derivatives transaction upon receiving the third signal.    
     
     
         2 . The method of  claim 1  further comprising the step of: 
 communicating information indicative of the trade request from the customer to one or more dealers, upon receipt of the first signal.    
     
     
         3 . The method of  claim 2 , wherein one of the one or more dealers is the first dealer.  
     
     
         4 . The method of  claim 2 , wherein one of the one or more dealers is a dealer other than the first dealer.  
     
     
         5 . The method of  claim 1  further comprising the step of: 
 communicating information indicative of an offer to execute the new derivatives transaction to the customer, upon receipt of the second signal.    
     
     
         6 . The method of  claim 1  further comprising the step of: 
 communicating information indicative of the acceptance of the new derivatives transaction upon receipt of the third signal.    
     
     
         7 . The method of  claim 1 , wherein the new derivatives transaction creates a tear-up.  
     
     
         8 . The method of  claim 1 , wherein the new derivatives transaction is with a second dealer and creates an assignment upon acceptance by the first dealer.  
     
     
         9 . The method of  claim 1 , further comprising the step of: 
 storing at least one of the first, second, and third signals in a database run on a computer environment.    
     
     
         10 . The method of  claim 1 , further comprising the step of: 
 sending a fourth signal indicative that the existing derivatives transaction has been unwound.    
     
     
         11 . The method of  claim 1 , wherein the existing derivatives transaction that was executed with an original dealer is being assigned based on the acceptance of the offer to execute the new derivatives transaction received from a new dealer, and further comprising the step of: 
 notifying the original dealer of the execution of the new derivatives transaction with the new dealer.    
     
     
         12 . The method of  claim 11 , further comprising the steps of: 
 receiving from the original dealer an acceptance of the assignment of the existing derivatives transaction; and    updating the record of the existing derivatives transaction to indicate assignment of the existing derivatives transaction.    
     
     
         13 . The method of  claim 11 , further comprising the steps of: 
 receiving from the original dealer a rejection of the assignment of the existing derivatives transaction; and    wherein both the new derivatives transaction and the original derivatives transaction are stored.    
     
     
         14 . The method of  claim 1 , wherein the existing derivatives transaction that was executed with an original dealer is being torn-up based on the acceptance of the offer to execute the new derivatives transaction received from the original dealer, and further comprising the step of: 
 updating the record of the existing derivatives transaction to indicate the tearing-up of the existing derivatives transaction.    
     
     
         15 . A system for monitoring derivatives transactions, comprising: 
 a trading engine capable of communication with a plurality of counterpart computers and enabling the execution of the derivatives transactions;    a trade history database communicatively connected to the trading engine and capable of communication with the plurality of counterpart computers, the trade history database configured to store a set of records of at least a portion of the derivatives transactions executed on the trading engine; and    wherein the trading engine is configured to enable an unwinding of the derivatives transactions, initiate a record of the unwinding to be stored in the trade history database, and send a notification of the unwinding of the derivatives transaction.    
     
     
         16 . The system of  claim 15 , wherein the unwinding of the derivatives transaction is a tear-up.  
     
     
         17 . The system of  claim 15 , wherein the unwinding of the derivatives transaction is an assignment.  
     
     
         18 . The system of  claim 15 , wherein the trade history database is also configured to store a record of at least a portion of a derivatives transaction executed on a second trading engine.  
     
     
         19 . The system of  claim 15 , the trade history database is also configured to store a record of derivatives transactions executed over the telephone.  
     
     
         20 . The system of  claim 15 , wherein the trading engine comprises one or more computers operative with programming and adapted to communicate with the plurality of counterpart computers via a network.  
     
     
         21 . The system of  claim 20 , wherein the one or more computers are servers.  
     
     
         22 . The system of  claim 15 , wherein at least one of the counterpart computers is a personal digital assistant.  
     
     
         23 . The system of  claim 15 , wherein the trade history database resides on a data storage device.  
     
     
         24 . The system of  claim 23 , wherein the data storage device is a hard disk drive system.  
     
     
         25 . The system of  claim 15 , wherein the trading engine and counterpart computers communicate through the exchange of data messages.  
     
     
         26 . The system of  claim 25 , wherein the data messages use an extensible markup language format.  
     
     
         27 . The system of  claim 15 , wherein the counterpart computers are configured to provide a set of graphical user interfaces that enable control of a plurality of trading-related functions.  
     
     
         28 . The system of  claim 27 , wherein information entered into the counterpart computers through the set of graphical user interfaces is transmitted to the trading engine for processing.  
     
     
         29 . The system of  claim 27 , wherein the graphical user interfaces include a position-tracking interface comprising at least a set of derivatives positions for one of the counterparts.  
     
     
         30 . The system of  claim 29 , wherein the position tracking interface includes a field for a description of a derivatives position from the set of derivatives positions.  
     
     
         31 . The system of  claim 27 , wherein the graphical user interfaces include a trade ticket interface for use in unwinding the derivatives transaction.  
     
     
         32 . A computer implemented method for monitoring a derivatives transaction executed by a first party and a counterpart, the method comprising: 
 storing a record for the derivatives transaction;    receiving a request to unwind the derivatives transaction from the first party to the derivatives transaction;    receiving price information from at least one of a plurality of additional counterparts;    automatically transmitting the price information to the first party;    receiving an acceptance of the price information;    unwinding the derivatives transaction; and    notifying the counterpart that the derivatives transaction has been unwound.    
     
     
         33 . The method of  claim 32  further comprising the step of transmitting a set of trade details for the derivatives transaction that has been unwound to an electronic confirmation interface.  
     
     
         34 . A system for monitoring derivatives transactions executed between counterparts, comprising: 
 a first receiving means for receiving a first signal indicative of a request to unwind a derivatives transaction;    a second receiving means for receiving a second signal indicative of an offer for unwinding the derivatives transaction;    a third receiving means for receiving a third signal indicative of an acceptance of the offer; and    a means for unwinding the derivatives transaction upon receipt of the third signal.    
     
     
         35 . The system of  claim 34 , wherein the second signal is indicative of a tear-up.  
     
     
         36 . The system of  claim 34 , wherein the second signal is indicative of an assignment.  
     
     
         37 . The system of  claim 34 , further comprising: 
 a storing means for storing one or more of the signals in a database run on a computer environment.    
     
     
         38 . The system of  claim 34 , further comprising a fourth receiving means: 
 for sending a fourth signal indicating that the derivatives transaction has been unwound.    
     
     
         39 . A system for tracking derivatives transactions executed between counterparts, comprising one or more servers configured to: 
 initiate a request on a trading engine to unwind a selected derivatives transaction;    select one or more counterparts to which the request will be transmitted;    populate a position tracking interface with information about the selected derivatives transaction;    receive price information from each of the responding counterparties that were submitted via a plurality of counterpart computers;    make a selection to execute the unwind transaction;    store a record of the unwind transaction in a trade history database;    update the trading engine to reflect the executed unwind transaction; and    populate a confirmation template on the trading engine system.    
     
     
         40 . The system of  claim 39 , wherein the unwind transaction is a tear-up.  
     
     
         41 . The system of  claim 39 , wherein the unwind transaction is an assignment.  
     
     
         42 . An automated method for monitoring a set of derivatives transactions executed between counterparts, comprising the steps of: 
 receiving a first signal indicative of a trade request concerning an existing derivatives transaction from the set of derivatives transactions;    receiving a second signal indicative of an offer to execute a new derivatives transaction;    receiving a third signal indicative of an acceptance of the offer; and    executing the new derivatives transaction upon receipt of the third signal.