Trading system with price improvement

Abstract

Traders in an electronic trading system are provided an opportunity to improve prices for an item trading in an active market are provided. After a trader hits a bid or lifts an offer, a market becomes active. When the market is active, traders can submit orders that improve on the price of the current market price of an item. Whenever a price improvement order is currently available for use in a transaction order, a price improvement indicator is displayed to indicate to other traders that price improvement is occurring. When a price improvement order is used to fill a transaction order, a portion of the difference between the market price and the price improvement price may be divided between the trader associated with the price improvement order, the trader associated with the transaction order, and the system host.

The invention claimed is: 
     
       1. A method comprising the steps of:
 at a trader's workstation in an electronic trading system designed to trade financial instruments, receiving data designed to cause presentation to the trader of one or more orders in a form executable by the trader to whom the orders are presented, the presented orders being orders to buy and/or sell a financial instrument at a specified price in a specified quantity, the electronic trading system establishing a standard price increment by which prices of orders differ, the standard price increment being a smallest incremental difference between price levels at which the system makes orders available for trading of the financial instrument; 
 at the trader's workstation, receiving data representing a price-improved order from a matching server of the trading system, the price-improved order being either (a) an offer to sell at a price lower than the a best offer to sell currently presented with a price and quantity, the price being lower than the best offer by an amount less than the standard price increment, or (b) a bid to buy at a price higher than the a best bid to buy currently presented with a price and quantity, the price being higher than the best bid by an amount less than the standard price increment, and 
 presenting, at a graphical user interface, data to the trader to indicate the availability of the price-improved order in a form executable by the trader, but withholding display of the price of the price-improved order at precision greater than the standard price increment; 
 in response to detecting a trade of a selected financial instrument, presenting at a cell window having a plurality of display sections of a graphical user interface, a first display section to display seller data fields to display a list of selected financial instruments to sell, a second display section to display buyer data fields to display a list of selected financial instruments to buy, and a third display section to display spread data fields to indicate a market depth of the selected financial instruments available in the market; and 
 in response to detecting commencement of price improvement for a selected financial instrument, updating the cell window to enable a display section to display a price improvement visual indicator to indicate that price improvement is taken place in the market. 
 
     
     
       2. The method of  claim 1 , wherein the price-improved order includes a specified quantity for said item financial instrument. 
     
     
       3. The method of  claim 2 , wherein the quantity for the price-improved order is presented to the traders trader to whom the price-improved order is presented. 
     
     
       4. The method of  claim 1 , further comprising the step of:
 providing an opportunity to enter a price-improved order into the electronic trading system to only traders that entered a previous order that has been executed, the opportunity being open within a specified time after execution of the previous order. 
 
     
     
       5. The method of  claim 1 , further comprising the step of:
 for a period of time following execution of the price-improved order, providing priority rights to a trader of a transaction executed on the price-improved order, the priority right providing an opportunity to temporarily stop orders from executing while the trader with the priority right has an exclusive opportunity to submit a new order. 
 
     
     
       6. The method of  claim 1 , further comprising the step of:
 allowing a trader to submit the price-improved order at a variable price that floats at a user-determined increment relative to the best offer or best bid then pending during the a time the price-improved order remains available to be traded. 
 
     
     
       7. The method of  claim 1 , wherein:
 the price-improved order is at a price improved relative to another price-improved order that is at a price outside the standard price increment. 
 
     
     
       8. The method of  claim 1 , wherein said the price-improved order includes a predetermined price improvement level comprises, the predetermined price improvement level comprising a level that improves on the a price of the a last-executed transaction by a user-defined quantity. 
     
     
       9. The method of  claim 1 , wherein:
 the price-improved order is at a price different from the best offer or best bid pending at the time the price-improved order is entered by an amount smaller than the standard price increment. 
 
     
     
       10. The method of  claim 1  further comprising the step of:
 displaying a visual price improvement indicator on a video screen of a trader to whom the price-improved order is presented, the visual price-improvement indicator being designed to indicate to the trader that the price-improved order is available to be traded. 
 
     
     
       11. A trader's workstation computer, being programmed to:
 generate data of an electronic trading system designed to trade financial instruments, the tradeable date data being at prices being multiples of a standard price increment by which prices of orders differ, the data designed to cause presentation to traders of one or more orders in a form executable by the traders to whom the orders are presented, the orders to be presented being orders to buy and/or sell a financial instrument at a specified price in a specified quantity, the standard price increment being a smallest incremental difference between price levels at which the system makes orders available for trading of the financial instrument; 
 receive at least one price-improved order from the electronic trading system a trader, the price-improved order having a price and a quantity, the price-improved order being either (a) an offer to sell at a price lower than the a best offer to sell currently presented with a price and quantity, the price being lower than the best offer by an amount less than the standard price increment, or (b) a bid to buy at a price higher than the a best bid to buy currently presented with a price and quantity, the price being higher than the best bid by an amount less than the standard price increment, and generate data for presentation to a trader at the workstation to indicate the availability of the price-improved order in a form executable by the trader, but withholding the precise price of the price-improved order at a precision greater than the standard price increment; 
 in response to detecting a trade of a selected financial instrument, present at a cell window having a plurality of display sections of a graphical user interface, a first display section to display seller data fields to display a list of selected financial instruments to sell, a second display section to display buyer data fields to display a list of selected financial instruments to buy, and a third display section to display spread data fields to indicate a market depth of the selected financial instruments available in the market; and 
 in response to detecting commencement of price improvement for a selected financial instrument, update the cell window to enable a display section to display a price improvement visual indicator to indicate that price improvement is taken place in the market. 
 
     
     
       12. The trader's workstation computer of  claim 11 , wherein the quantity for the price-improved order is presented to the traders trader to whom the price-improved order is presented. 
     
     
       13. The trader's workstation computer of  claim 11 , wherein the price-improved order has a price set relative to a price of an order at a standard-increment price currently pending. 
     
     
       14. The trader's workstation computer of  claim 11 , further comprising programs designed to cause one or more computers to:
 provide an opportunity to enter a price-improved order into the electronic trading system to only traders that entered a previous order that has been executed, the opportunity being open within a specified time after execution of the previous order. 
 
     
     
       15. The trader's workstation computer of  claim 11 , further comprising programs designed to cause one or more computers to:
 for a period of time following execution of the price-improved order, providing priority rights to a trader of a transaction executed on the price-improved order, the priority right providing an opportunity to temporarily stop orders from executing while the trader with the priority right has an exclusive opportunity to submit a new order. 
 
     
     
       16. The trader's workstation computer of  claim 11 , further comprising programs designed to cause one or more computers to:
 allow a trader to submit the price-improved order at a variable price that floats at a user-determined increment relative to the best offer or best bid then pending during the time the price-improved order remains available to be traded. 
 
     
     
       17. The trader's workstation computer of  claim 11 , wherein:
 the price-improved order is at a price improved relative to another price-improved order that is at a price outside the standard price increment. 
 
     
     
       18. The trader's workstation computer of  claim 11 , wherein:
 saidthe price-improved order includes a predetermined price improvement level comprises, the predetermined price improvement level comprising a level that improves on thea price of thea last-executed transaction by a user-defined quantity. 
 
     
     
       19. The trader's workstation computer of  claim 11 , further comprising programs designed to cause one or more computers to:
 validate the price-improved order by comparing its price to a price of a recently-executed transaction. 
 
     
     
       20. The trader's workstation computer of  claim 11 , wherein:
 the price-improved order is at a price different from the best offer or best bid pending at the time the price-improved order is entered by an amount smaller than the standard price increment. 
 
     
     
       21. The trader's workstation computer of  claim 11 , further comprising programs designed to cause one or more computers to:
 display a visual price improvement indicator on a video screen of a trader to whom the price-improved order is presented, the visual price-improvement indicator being designed to indicate to the trader that the price-improved order is available to be traded. 
 
     
     
       22. The trader's workstation computer of  claim 11 , further comprising programs designed to cause one or more computers to:
 execute a trade of the price-improved order at a price at a predetermined difference from the price of the price-improved order. 
 
     
     
       23. The trader's workstation computer of  claim 11 , further comprising programs designed to cause one or more computers to:
 for at least some of said price-improved orders, display a quantity of at least some price-improved orders. 
 
     
     
       24. A method comprising the steps of:
 transmitting, by an electronic system, data to a workstation via a communications network, wherein receipt of the data causes the workstation to present to a user of the workstation via a graphical user interface one or more orders in a form executable by the user, the presented orders being orders to buy and/or sell an item at a specified price, and wherein the prices of the orders differ by standard price increments; and   receiving, by the electronic system, from a second workstation via a communications network, data representing the submission of a price-improved order for the item, the price-improved order being either (a) an offer to sell at a price lower than a price of a pending best offer to sell the item, the price of the price-improved order being lower than the price of the best offer by an amount less than the standard price increment, or (b) a bid to buy at a price higher than a price of a pending best bid to buy the item, the price of the price-improved order being higher than the price of the best bid by an amount less than the standard price increment, the standard price increment being a smallest incremental difference between price levels at which the system makes orders available for trading of the financial instrument;   transmitting, by the electronic system, to the workstation, data representing the price-improved order, wherein receipt of the data representing the price-improved order by the workstation causes the workstation to present to the user of the workstation via the graphical user interface a visual indication that the price-improved order is available to be transacted against, and withhold display of the price of the price-improved order at precision greater than the standard price increment;   in response to detecting a trade of a selected financial instrument, causing to present at a cell window having a plurality of display sections of a graphical user interface, a first display section to display seller data fields to display a list of selected financial instruments to sell, a second display section to display buyer data fields to display a list of selected financial instruments to buy, and a third display section to display spread data fields to indicate a market depth of the selected financial instruments available in the market; and   in response to detecting commencement of price improvement for a selected financial instrument, causing to update the cell window to enable display section to display a price improvement visual indicator to indicate that price improvement is taken place in the market.   
     
     
       25. The method of claim 24, wherein the price-improved order includes a specified quantity for the item. 
     
     
       26. The method of claim 25, wherein the specified quantity for the price-improved order is presented to the user of the workstation. 
     
     
       27. The method of claim 24, further comprising the step of:
 transmitting only to workstations of users that entered a previous order that has been executed, data causing the workstations to provide the users with an opportunity to enter a price-improved order, the opportunity being open within a specified time after execution of the previous order.   
     
     
       28. The method of claim 24, further comprising the step of:
 for a period of time following execution of the price-improved order, providing priority rights to a user of a transaction executed on the price-improved order, the priority right providing an opportunity to temporarily stop orders from executing while the user with the priority right has an exclusive opportunity to submit a new order.   
     
     
       29. The method of claim 24, further comprising the step of:
 allowing a user to submit the price-improved order at a variable price that floats at a user-determined increment relative to the best offer or best bid then pending during a time the price-improved order remains available.   
     
     
       30. The method of claim 24, wherein:
 the price-improved order is at a price improved relative to another price-improved order that is at a price outside the standard price increment.   
     
     
       31. The method of claim 24, wherein the price-improved order includes a predetermined price improvement level, the predetermined price improvement level comprising a level that improves on a price of a last-executed transaction by a user-defined quantity. 
     
     
       32. An electronic system including at least one processor and memory storing instructions that, when executed by the at least one processor, cause the electronic system to:
 transmit data to a workstation via a communications network, wherein receipt of the data causes the workstation to present to a user of the workstation via a graphical user interface one or more orders in a form executable by the user, the presented orders being orders to buy and/or sell an item at a specified price, wherein the prices of the orders differ by standard price increments, the standard price increments being a smallest incremental difference between price levels at which the electronic system makes orders available for trading of the item;   receive from a second workstation via a communications network, data representing the submission of a price-improved order for the item, the price-improved order being either (a) an offer to sell at price lower than a price of a pending best offer to sell the item, the price of the price-improved order being lower than the price of the best offer by an amount less than the standard price increment, or (b) a bid to buy at a price higher than a price of a pending best bid to buy the item, the price of the price-improved order being higher than the price of the best bid by an amount less than the standard price increment;   transmit to the workstation data representing the price-improved order, wherein receipt of the data representing the price-improved order by the workstation causes the workstation to present to the user of the workstation via the graphical user interface a visual indication that the price-improved order is available to be transacted against, and withhold display of the price of the price-improved order at precision greater than the standard price increment;   in response to detecting a trade of a selected financial instrument, cause to present at a cell window having a plurality of display sections of a graphical user interface, a first display section to display seller data fields to display a list of selected financial instruments to sell, a second display section to display buyer data fields to display a list of selected financial instruments to buy, and a third display section to display spread data fields to indicate a market depth of the selected financial instruments available in the market; and   in response to detecting commencement of price improvement for a selected financial instrument, cause to update the cell window to enable a display section to display a price improvement visual indicator to indicate that price improvement is taken place in the market.   
     
     
       33. The electronic trading system of claim 32, wherein the price-improved order includes a specified quantity for the item. 
     
     
       34. The electronic trading system of claim 33, wherein the specified quantity for the price-improved order is presented to the user of the workstation. 
     
     
       35. The electronic trading system of claim 32, wherein the price-improved order has a price set relative to a price of an order at a standard-increment price currently pending. 
     
     
       36. The electronic trading system of claim 32, wherein the instructions, when executed, further cause the electronic system to:
 transmit only to workstations of users that entered a previous order that has been executed, data causing the workstations to provide users with an opportunity to enter a price-improved order, the opportunity being open within a specified time after execution of the previous order.   
     
     
       37. The electronic trading system of claim 32, wherein the instructions, when executed, further cause the electronic system to:
 for a period of time following execution of the price-improved order, provide priority rights to a user of a transaction executed on the price-improved order, the priority rights providing an opportunity to temporarily stop orders from executing while the user with the priority rights has an exclusive opportunity to submit a new order.   
     
     
       38. The electronic trading system of claim 32, wherein the instructions, when executed, further cause the electronic system to:
 allow a user to submit the price-improved order at a variable price that floats at a user-determined increment relative to the best offer or best bid then pending during a time the price-improved order remains available.   
     
     
       39. The electronic trading system of claim 32, wherein:
 the price-improved order is at a price improved relative to another price-improved order that is at a price outside the standard price increment.   
     
     
       40. The electronic trading system of claim 32, wherein:
 the price-improved order includes a predetermined price improvement level, the predetermined price improvement level comprising a level that improves on a price of a last-executed transaction by a user-defined quantity.   
     
     
       41. The electronic trading system of claim 32, wherein the instructions, when executed, further cause the electronic system to:
 validate the price-improved order by comparing its price to a price of a recently-executed transaction.   
     
     
       42. The electronic trading system of claim 32, wherein the instructions, when executed, further cause the electronic system to:
 execute a trade of the price-improved order at a price that has a predetermined difference from the price of the price-improved order.   
     
     
       43. A workstation including at least one processor and memory storing instructions that, when executed by the at least one processor, cause the workstation to:
 receive data from an electronic system via a communications network, receipt of the data causing the workstation to present to a user of the workstation via a graphical user interface one or more orders in a form executable by the user, the presented orders being orders to buy and/or sell an item at a specified price, wherein the prices of the orders differ by standard price increments, the standard price increments being a smallest incremental difference between price levels at which the electronic system makes orders available for trading of the item;   receive from the electronic system via a communications network data representing the submission of a price-improved order for the item by another workstation, the price-improved order being either (a) an offer to sell at price lower than a price of a pending best offer to sell the item, the price of the price-improved order being lower than the price of the best offer by an amount less than the standard price increment, or (b) a bid to buy at a price higher than a price of a pending best bid to buy the item, the price of the price-improved order being higher than the price of the best bid by an amount less than the standard price increment, wherein receipt of the data representing the price-improved order by the workstation causes the workstation to present to the user of the workstation via the graphical user interface a visual indication that the price-improved order is available to be transacted against, and withholds display of the price of the price-improved order at precision greater than the standard price increment;   receiving from an input device of the workstation an acceptance of the price-improved order;   transmitting to the electronic system via a communications network data indicating the acceptance of the price-improved order by the user of the workstation;   in response to detecting a trade of a selected financial instrument, causing to present at a cell window having a plurality of display sections of a graphical user interface, a first display section to display seller data fields to display a list of selected financial instruments to sell, a second display section to display buyer data fields to display a list of selected financial instruments to buy, and a third display section to display spread data fields to indicate a market depth of the of selected financial instruments available in the market; and   in response to detecting commencement of price improvement for a selected financial instrument, causing to update the cell window to enable a display section to display a price improvement visual indicator to indicate that price improvement is taken place in the market.