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CA-3075082-C - SYSTEM AND METHOD FOR GLOBAL TRADING EXCHANGE

CA3075082CCA 3075082 CCA3075082 CCA 3075082CCA-3075082-C

Abstract

A system and method for mitigating the effects of transit time latency in the execution of global trade orders at remote exchange servers utilizes a generated complex order. End users with certain trading protocols directed to their asset classes provide the co-located server with their trading parameters, and further personalize their trade orders by establishing rules for executing the orders at each co-located server. This is known as their complex order. A deployed strategy engine generates a virtual machine at each co-located server, which thus allows the co-located server to execute complex orders received from the end user. The end user may modify or delete the complex order at each co-located server at any time. Transit time latency issues are drastically reduced under this system and method.

Inventors

  • Mark Gimple

Assignees

  • Mark Gimple

Dates

Publication Date
20260505
Application Date
20180912
Priority Date
20180911

Claims (20)

  1. 23 Claims: 1. A method of mitigating the effects of transit time latency in the execution of global trade orders at remote exchange servers, comprising: providing a graphical user interface for an order management system/execution management system for permitting remote access by an end user to at least one exchange server, the graphical user interface providing centralized global control to the end user; providing at least one co-located server for receiving remote transmissions from the end user via the order management system/execution management system and for communicating with the at least one exchange server, the at least one co-located server being in close proximity with an exchange server and sharing a local execution protocol with the exchange server; determining at least one polymorphic rule for execution of a trade order; choosing the at least one polymorphic rule by the end user via the graphical user interface based upon desired trade protocols of the end user for particular asset classes of the end user; creating a complex order in the form of a logical software object comprising a bundle of basic parameters for the trade order and the at least one polymorphic rule for executing the trade order; deploying a virtual machine at a selected one of the at least one co-located servers, the virtual machine enabling the end user to interact with the selected one of the at least one co-located servers via the graphical user interface; mirroring the order management system/execution management system at the selected co-located server via the virtual machine; translating the complex order at the selected co-located server to the exchange server local execution protocol; Date Re9ue/Date Received 2024-03-25 24 parameterizing the complex order at the selected co-located server in accordance with the at least one polymorphic rule based on a real-time market data feed from the exchange server to create the trade order; executing the trade order at the exchange server using the real-time market data feed; and mitigating the effects of transit time latency by executing the complex order at the at least one co-located server using the virtual machine, due to the at least one co-located server being in close proximity with the exchange server and the complex order being translated and parameterized at the selected co-located server using the real-time market data feed prior to execution of the trade order at the exchange server.
  2. 2. The method of claim 1 further comprising: overseeing the execution of a plurality of complex orders by a smart operating system at the at least one co-located server.
  3. 3. The method of claim 2, wherein the step of overseeing the execution of a plurality of complex orders further comprises: load balancing multiple complex orders across multiple end users via the smart operating system within the at least one co-located server.
  4. 4. The method of claim 1 further including: deleting the complex order prior to or after completion of execution of the trade order.
  5. 5. The method of claim 1 further including: modifying the complex order at any point in time prior to or during the execution of the trade order. Date Re9ue/Date Received 2024-03-25
  6. 6. The method of claim 1 further including: encrypting the complex order using a private container.
  7. 7. The method of claim 1 further including: gathering result data created during the execution of the trade order at the exchange server; transmitting the result data from the exchange server back to the end user as the result data is gathered; and displaying the result data to the end user via the graphical user interface.
  8. 8. The method of claim 1 wherein the end user determines the at least one polymorphic rule for execution of the trade order from a third party repository.
  9. 9. The method of claim 1 wherein the end user determines the at least one polymorphic rule for execution of the trade order to be modified by the end user.
  10. 10. A system of mitigating the effects of transit time latency in the execution of global trade orders at remote exchange servers, comprising: a graphical user interface for an order management system/execution management system for permitting remote access by an end user to at least one exchange server, the graphical user interface providing centralized global control to the end user; at least one co-located server for receiving remote transmissions from the end user, for the execution of at least one complex order at a selected one of the at least one exchange servers, and for the transmittal of market activity and return data, the at least one co-located server being in close proximity with an exchange server and sharing a same protocol with the exchange server, the at least one co-located server including an execution logic API for translating the at least one complex order to the selected exchange server protocol and for Date Re9ue/Date Received 2024-03-25 26 parameterizing the at least one complex order at the co-located server in accordance with a polymorphic rule for execution of a trade order based on a real-time market data feed from the selected exchange server to create the trade order; the polymorphic rule for execution of the trade order, the polymorphic rule chosen by an end user based upon desired trade protocols of the end user for a particular asset class of the end user; the at least one complex order in the form of a logical software object comprising a bundle of basic parameters for the trade order and the polymorphic rule; and a virtual machine deployed at a selected one of the at least one co-located servers, the virtual machine mirroring the order management system/execution management system at the selected co-located server and enabling the end user to interact with the selected co-located server via the graphical user interface; wherein the at least one co-located server is enabled via the virtual machine to process the at least one complex order using the real-time market data feed from the exchange server to mitigate the negative effects of transit time latency that would otherwise occur under a standard execution procedure due to the complex order being translated and parameterized at the selected co-located server via the virtual machine prior to transmission of the trade order to the selected exchange server.
  11. 11. The system of claim 10 further including a smart operating system for overseeing the execution of multiple complex orders within the at least one co-located server.
  12. 12. The system of claim 11 further including load balancing multiple complex orders across multiple end users via the smart operating system within the at least one co-located server.
  13. 13. The system of claim 10 wherein the end user can delete the complex order prior to or after execution of the trade order at the exchange server. Date Re9ue/Date Received 2024-03-25 27
  14. 14. The system of claim 10 wherein the end user can modify the complex order at the at least one co-located server at any time prior to or during execution of the trade order.
  15. 15. A method of mitigating the effects of transit time latency in the execution of global trade orders at remote exchange servers, comprising: selecting, by an end user via a graphical user interface for an order management system/execution management system, basic parameters for a trade order; creating, by the end user via the graphical user interface, at least one polymorphic rule for execution of the trade order to apply with the trade order; combining the created at least one polymorphic rule with basic parameters for the trade order to create a complex order; translating the complex order from the end user to an exchange server local execution protocol via a virtual machine deployed at a co-located server, the co-located server in close proximity with the exchange server for executing the trade order; and parameterizing the complex order at the co-located server in accordance with the at least one polymorphic rule based on a real-time market data feed from the exchange server to create the trade order; executing the trade order at the exchange server.
  16. 16. The method of claim 15 further comprising: overseeing the execution of a plurality of complex orders by a smart operating system at the co-located server.
  17. 17. The method of claim 16 wherein the step of overseeing the execution of a plurality of complex orders further comprises: load balancing multiple complex orders across multiple end users via the smart operating system within the co-located server. Date Re9ue/Date Received 2024-03-25 28
  18. 18. The method of claim 15 further including: deleting the complex order prior to or after completion of execution of the trade order.
  19. 19. The method of claim 15 further including: modifying the complex order at any point in time prior to or during execution of the trade order.
  20. 20. The method of claim 15 further including: gathering result data created during the execution of the trade order at the exchange server; transmitting the result data from the exchange server back to the end user as the result data occurs; and displaying the result data to the end user via the graphical user interface. Date Re9ue/Date Received 2024-03-25

Description

1 SYSTEM AND METHOD FOR GLOBAL TRADING EXCHANGE Background of the Invention Field of the Invention: 5 This invention relates to a method and system for mitigating the effects of transit time latency in the execution of global trade orders. Description of Related Art: Over 200 years ago trading was done on a face to face basis. Communication and transactions occurred at the same pace. People could convey ample information about 10 what they wanted from the transaction. As technology advanced with electronic communications, the buyers and sellers could move away from a trading plaza, stockyard, or cornfield and convey the same information about a transaction to a co-located representative who implemented the actual transaction. Communication speeds (!O's of milliseconds) were 3 to 4 orders of magnitude faster than the transaction speed. 15 The reason communications have not increased is due to the physical limitations of networks bounded by the speed of light. Furthermore, the information about the trade has been relegated down to a few parameters such as size, side (buy/sell), entity, order type, and possibly price, and possibly a canned process. This has left the playing field highly tilted for most people transacting orders. As a result, those physically closer to the 20 exchange have had the advantage. Currently, remote trading procedures exist in the art. These methods of trading allow for direct market access, but are greatly hindered by latency defects caused in transmitting order requests, especially when involving markets located across the globe. In particular, these prior art methods may take seconds to process which - although 25 seemingly quick to the human mind - provides enough time for market fluctuation to drastically change the outcome of such trading methods. These methods further fail to Date Re9ue/Date Received 2024-03-25 WO 2019/055459 PCT/0S2018/050575 -2- ' provide the ability to trade remotely with a centralized global control, and with localized execution of children orders. One specific example of the problems presented by the prior art is the end user trying to "buy at the bid" a stock at an exchange that is located 20 milliseconds away (one way 5 transit), in terms of data transmission times. Using the methods presented in the prior art, the end user would send a limit order to buy at the current bid price as shown on his graphical user interface ("GU I"). Unfortunately, that displayed price is already stale by 20 milliseconds. The order has another 20 milliseconds to go before it reaches the exchange, at best. In fast moving markets, 40 milliseconds (round trip time) can be 10 excessively long. The bid could have fallen by the time the order arrives at the exchange. Thus in some cases, the order gets executed at a higher price. If the bid rises then the order will not execute at all. Thus, there remains a need to enable remote trading on a global exchange, while eliminating the disadvantages caused by latency due to trading remotely, as present in the prior art. 15 Summary of the Invention Bearing in mind the problems and deficiencies of the prior art, it is therefore an object of the present invention to provide a system and method for a global trading exchange that levels the playing field for all players and provides better ubiquitous liquidity. It is another object of the present invention to provide a system and method for 20 mitigating the effects of transit time latency in the execution of global trade orders at exchange servers using co-located servers. It is still a further object of the present invention to provide a system and method that allows for personal end user modification of complex orders to be processed by colocated servers. 25 Still other objects and advantages of the invention will in part be obvious and will in part be apparent from the specification. WO 2019/055459 PCT/0S2018/050575 The above and other objects, which will be apparent to those skilled in the art, are achieved in the present invention which is directed to a method of mitigating the effects of transit time latency in the execution of global trade orders at remote exchange servers, comprising: providing a graphical user interface for an order management 5 system/execution management system for permitting access by an end user; providing at least one co-located server for receiving remote transmissions from the end user via the order management system/execution management system, the at least one co-located server being in close proximity with an exchange server; determining at least one rule for execution of a trade order; choosing the at least one rule by the end user via the 10 graphical user interface based upon desired trade protocols of the end user for particular asset classes of the end user; creating a complex order comprising basic parameters for the trade order, and the at least one rule for executing the trade order, via the graphical user interface; generating a virtual machine at