Discretionary order in an electronic guaranteed entitlement environment

US8600862B2 · kind B2 · utility

Assignee

• NYSE Holdings LLC · US

Inventors

• Paul D. Adcock · Burr Ridge, US
• Michael A. Cormack · Evanston, US
• Amy Famstrom · Oakland, US
• Thomas F. Haller · Longwood, US
• Robert A. Hill · Melvindale, US

Key dates

• Filing date: Sep 2, 2010
• Grant date: Dec 3, 2013
• Expiry date: Mar 15, 2032

Classification

• Technology area (CPC G): Physics
• CPC primary: G06Q40/06
• WIPO field: IT methods for management
• WIPO sector: Electrical engineering

Abstract

An enhanced system and method for handling, matching and executing discretionary orders in an electronic options environment is disclosed. Market maker entitlements are integrated with the discretionary order processing, so that the market maker is guaranteed an allocation of the trade if the market maker is at the NBBO when an incoming discretionary order priced at or better than the NBBO is received. If the incoming discretionary order cannot execute at the NBBO using its display price, then it will use as much discretion as is required to participate in a market maker entitlement if the market maker is quoting at the NBBO, and to execute against the order book and route to away markets quotations at the NBBO. Once posted to the order book, only the display price of a discretionary order is eligible for preferential execution in a market maker entitlement process.