`
`International Bureau
`WORLD INTELLECTUAL PROPERTY ORGANIZATION
`
`
`
`INTERNATIONAL APPLICATION PUBLISHED UNDER THE PATENT COOPERATION TREATY (PCT)
`
`(51) International Patent Classification 5 =
`
`(11) Intenaflonal Publication Number:
`
`W0 90/11571
`
`G051‘ 15/21
`
`(43) International Publication Duo:
`
`4 October 1990 (04.10.90)
`
`(21) International Application Number:
`
`PCT/US90/00873
`
`(2‘Z)IIternatlonnl Filing Date:
`
`16 February 1990 06.02.90)
`
`(74) Agents: SCHLITIER, Stanley, A. et al.; Kirkland & Ellis,
`655 Fifteenth Street, North West, Suite 1200, Washing-
`ton, DC 20005 (US).
`
`(30)P1'lol'lty data:
`329,866
`
`28 March 1989 (2803.89)
`
`US
`
`(81) Designated States: AU, CA, JP, KR.
`
`Published
`With irrtermnionaf search report.
`
`(71) Applicant: CHICAGO BOARD OF TRADE [US/US];
`141 West Jackson Boulevard, Chicago, IL 60604 (US).
`
`; 4164 Terrarnere Avenue,
`(72)I1rveu0ors: BELDEN, Glen, W.
`Arlington Heights, IL 60004 (US). BROGAN, John, J. ;
`505 North Willow Wood Drive, Palatine, IL 6006? (US).
`0‘I-IALLERAN, Thomas, C.
`; 690 Ardsley, Winnetka,
`IL 50093 (US). GUTTERMAN, Burton, J.
`; 700 Bluff,
`Glenooe, II. 60022 (US). KINSELLA, John, R.
`; 508
`South Owen, Mount Prospect, IL 60056 {US}. BOYLE,
`Michael, B.
`; 2409 Rio Grand Circle, Naperville, IL
`60565 (US). CHOW, Alvin ; 901 Cherokee Road, Wil-
`mette, IL 60091 (US). PHELPS, Bruce ; 116 Lewis Lane,
`Wheaton, IL 60187 (US). WHITE, James ; 5344 South
`Nottingham, Chicago, IL 60638 (US).
`
`(54) Title: SIMULATED LIVE MARKET TRADING SYSTEM
`
`3:
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`
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`1.
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`In-
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`(57) Abstract
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`A method and apparatus for market trading is disclosed, the apparatus generally comprising a host processor and a plural-
`ity of user terminals in selective communication with the host. Each user terminal includes a selectively partitionable display
`(205-1,5,6, 206, 207) by which market information is conveyed to a participant. Among other features, the method involves the use
`of icons (205-2,3) for representing traders, each icon including information relevant to the commodity being traded. The method
`and apparatus are applicable to markets for trading commodities such as securities, securities options, futures contracts and fu-
`tures options.
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`1
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`FOR HIE PURPOSES OF INFORLMTION ONLY
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`Codes used to identity Staxes party to the PCT an the flout pages of pamphlets publishing international
`applications under the PCT.
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`AT
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`PCI‘!US9lJ!{|0878
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`SDMHAIfl)LHmIMflKEFTmflEH3SflflM
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`A portion of the disclosure of this patent document
`
`contains material to which a claim for copyright is made.
`The copyright owner has no objection to the facsimile
`
`reproduction by anyone of the patent document or the patent
`
`disclosure, as it appears in the Patent and Trademark
`
`Office patent file or records, but reserves all other
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`copyright rights whatsoever.
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`EBQEEBQEEQ
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`This application is a continuation-in-part of co-pending
`
`U.S. Patent Application Ser. No.
`
`329,%6
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`, filed
`
`March 14, 1989 by the present inventors.
`
`The present invention relates to computer-based tech-
`
`niques for replicating a physical market for trading items
`
`such as stocks, bonds, stock options, futures options, and
`
`futures contracts on commodities including agricultural
`
`products, financial instruments, stock market indices, and
`
`the like.
`
`A futures contract is an agreement providing for the
`
`future delivery of a fixed quantity of a commodity under
`
`conditions specified by a federally designated exchange.
`
`In general, that contract is a firm legal agreement between
`a buyer and seller to make or take delivery of the
`
`underlying commodity and is cleared by a separate
`
`clearinghouse.
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`The futures exchanges house centralized auction markets
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`(called designated contract markets) where standardized
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`contracts, based on quantity and quality of commodity, are
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`bought and sold, for future delivery, by open outcry.
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`It
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`is important to note that the exchanges themselves do not
`
`trade commodity contracts, nor do they set prices at which
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`contracts are traded. They merely furnish a place where
`
`market participants and their brokerage representatives can
`
`meet to buy and sell commodity futures contracts.
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`Floor traders are generally classified in two ways
`
`(1) as speculators, or "locals" who buy and sell for their
`
`own accounts, or (2) as floor brokers, who fill orders for
`
`commission houses, producers and processors seeking to lock
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`in a price for their products.
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`A "local" can take
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`long-term positions (i.e., weeks or months) or "scalp" over
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`very short periods (liquidating positions within seconds or
`
`minutes of entering the transactions). He may trade in one
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`or more pits. He benefits from the speed with which he can
`
`take or liquidate positions, but this is in itself no
`
`assurance of a profit.
`
`some floor traders specialize in
`
`spreads by taking opposite positions between future or
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`options when the price difference appears abnormal. Floor
`
`traders have the advantage of lower transaction costs
`
`available to all members of exchanges.
`
`Some floor traders execute orders for others but seldom
`
`or never trade for themselves. These are brokers who may
`
`who may specialize in orders from customers such as com-
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`mercial processors, exporters, financial institution com-
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`modity trading funds and the like. They may receive only a
`small percentage of the comissions paid by the customer to
`
`his commission house, but the commission revenues may be
`
`_substantial depending on the volume of business.
`
`The
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`orders held by a floor broker at any given time are
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`referred to as his "deck." He is allowed to trade for his
`
`own account if he chooses, but can not use the public
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`orders to benefit his own trading.
`
`Trading generally takes place in a pit or around the
`
`outside of a ring. All orders received by member firms are
`
`transmitted to the exchange floor for execution and are
`
`filled according to bids and offers in the respective pits
`
`by open outcry to all members present at the time.
`
`only
`
`one comodity is traded in a pit or around a ring unless
`
`the volume is too small to justify so much space.
`
`customarily,
`
`those trading the same delivery month of a
`
`commodity gather in the same area of the ring or on the
`
`same step of the pit so that a broker with an order can
`
`locate the particular market as quickly as possible.
`
`Whenever volume is high and price changes of a commodity
`
`are rapid, it is not uncommon for different prices to be
`
`bid and offered for the same delivery month in different
`
`parts of the trading area at the same time. These condi-
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`tions might result in trades at prices that are never offi-
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`cially quoted or might cause an order to be marked "un-
`
`able," even though the price on the order was well within
`
`the range of trading in that commodity.
`
`Transactions on the trading floor must be reported to
`
`the membership and the general public. This is
`
`accomplished through a variety of communications systems by
`
`the various commodity exchanges. Transaction information
`
`is entered by exchange-employed market reporters in each
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`trading pit and is accessible through computer terminals
`
`and electronic wallboards on each trading floor.
`
`At the end of each day the clearing house, which may be
`
`a subsidiary of the exchange or an independent entity, as-
`
`sumes one side of all open contracts:
`
`the clearing house
`
`becomes the buyer to each seller of a futures contract, and
`
`a seller to each buyer. The clearing house guarantees its
`
`members the Ptrformance of both sides of all open
`
`contracts.
`
`other aspects of the commodity markets are treated in
`
`the literature, which includes Kaufman, "Handbook of
`
`Futures Markets," John Wiley & Sons, New York (1934);
`
`Rothstein, "The Handbook of Financial Futures,“ McGraw Hill
`
`Book company, New York (1934): Gould, "The Dow Jones-Irwin
`
`Guide to Commodities Trading," Dow Jones-Irwin, Homewood
`
`(1981); Goss & Yamey, "The Economics of Futures Trading,"
`
`John Wiley & sons (1976): Johnson & Hazen, "commodities
`
`Regulation," Little, Brown and company, Boston (1989); R.
`
`Teweles et al., "The commodity Futures Game," McGraw-Hill,
`
`New York (1974); T. Hieronymus, "Economics of Futures
`
`Trading,“ Commodity Research Bureau, Inc., New York (1971);
`
`"commodity Trading Manual," Chicago Board of Trade, Chicago
`
`(1985): and J. Schwager,
`
`"A complete Guide to the Futures
`
`Markets," John Wiley 5. Sons, New York (1934) .
`
`The open outcry method of auction trading is widely
`
`believed to be the best method of buying and selling goods
`
`because of the fast access to the market it provides to all
`
`prospective traders. At present the open outcry auction in
`
`the pit produces a large quantity of information which must
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`be recorded accurately and quickly by hand. As markets he-
`
`come more complex and international in character,
`those re-
`quirements and the need for the physical presence of human
`
`traders in the same place may excessively restrict develop-
`
`ment of the market.
`
`The information which is available to traders in pres-
`
`ent-day trading pits includes:
`
`(1)
`
`the identities of the
`
`other traders in the pit:
`
`(2)
`
`the market activities of the
`
`other traders in the pit,
`
`including bids, offers, and
`
`trades made or not;
`
`(3)
`
`the personal appearance of other
`
`traders in the pit: and (4) selected news from outside the
`
`pit.
`
`It should be understood that some of this information
`
`is provided to present traders by subtle inferential
`
`communication means, such as body language, as well as by
`
`more objective means like news tickers and electronic
`
`-bulletin boards.
`
`Accordingly, an object of the present invention is to
`
`replicate the action which occurs in real commodity trading
`
`pits with an electronic system which would relieve the re-
`
`strictions inherent in the such pits while retaining their
`
`advantages. other automated trading systems and the like
`
`are disclosed in U.S. Patents 4,789,928 to Fujisaki:
`
`4,677,552 to Sibley, Jr.; and 4,674,044 to Kalmus, et al.
`
`By using the system of the present invention, traders
`
`and their customers will have the benefit of the open
`
`outcry auction market's time—proven efficiency in
`
`discovering prices; the liquidity that locals bring to the
`
`trading pit: the competition between many buyers and many
`
`sellers that drives prices to their most economically
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`appropriate level: the transparency of the market, which
`
`allows traders to know who is in the market and at what
`
`price and quantity; and the ability to provide a superior
`
`level of market surveillance.
`
`As described above,
`
`the trading system of the present
`
`invention is applicable to all markets,
`
`including those for
`
`securities trading. Securities markets are usually based
`
`on actions by specialists, each of whom is the market maker
`
`for one or more specific securities.
`
`In the New York stock
`
`Exchange, for example, the ultimate determination of price
`
`for any given transaction frequently is determined by a
`
`specialist who deals in a particular stock and who
`
`maintains a running list or "book" of offers to sell and
`
`orders to purchase that stock. The specialist may complete
`
`a transaction in the stock whenever one or more purchase
`
`and sell orders can be matched with respect to price; on
`
`occasion, the same specialist purchases the particular
`
`stock in which he specializes or sells the same stock in
`
`order to maintain a market for the stock and prevent
`
`violent fluctuations in its price. Similar functions,
`
`particularly with respect to the matching of orders to
`
`purchase and to sell, must be carried out in all auction
`
`markets for the marketing of fungible goods,
`
`including such
`
`commodities as wheat, corn, and the like as well as stocks
`
`and bonds.
`
`A computation system for establishing prices in auction
`
`trading for the securities market is described in U.S. Pat-
`
`ent 3,58l,072 to Nymeyer. That computation system
`
`comprises a main data store for recording encoded data
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`items representative of orders to buy and to sell the
`
`goods, such orders including orders at specific prices and
`
`other orders "at the market." The system includes a buy
`
`order sequencing device for arranging and recording
`
`purchase offers first in descending order by price and
`
`secondly by time of entry so that at each price level the
`
`oldest orders are uppermost.
`
`A sell order sequencing
`
`device is provided for arranging and recording all offers
`
`to sell first in ascending order by price and secondly in
`
`descending order by time so that once again the oldest
`
`orders are the highest at each price level.
`
`A closing
`
`price store is provided to record the last actual selling
`
`price for the goods.
`
`The closing price store and the-main
`
`data store are coupled, by suitable control means, to the
`
`sequencing devices in order to transfer the recorded data
`
`items from the data store to the sequencing devices with
`
`"at market" prices being transferred at the aforementioned
`
`last selling price.
`
`The two sequencing devices are coupled
`
`to a comparator that compares the sell orders and the buy
`
`orders, when they have been arranged in sequence,
`
`to
`
`determine the lowest buy order price that is equal to or
`
`greater than a recorded sell order and thus establish a new
`
`selling price for the goods.
`
`More than such a system for merely matching buy and sell
`
`orders, the present invention provides a system that allows
`
`traders to create a market, whether of the open-outcry type
`
`or of the order—matching type.
`
`Its trade reaction time
`
`closely approximates that associated with a live auction
`
`market.
`
`Information necessary for traders is presented on
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`a display. The re-creation of the competitive pit provides
`
`an incentive for locals to trade,
`
`thereby maintaining the
`
`liquidity that is critical to auction market trading.
`
`The
`
`system also provides market transparency, i.e., partici-
`
`pants can see who is in the market and who is executing
`
`trades with whom -- an important component of a competitive
`
`market. Finally, the present invention's ability to allow _
`
`participants to view the market, just as if they were phys-
`
`ically present, encourages a competitive market and
`
`enhances the ability to detect trading abuses that may oc-
`
`cur.
`
`With the system of the present invention, traders can
`
`quickly see who is in the pit, whether they are buying or
`
`selling,
`
`in what quantity, the bids and offers, price
`
`levels and a wide variety of market activity.
`
`The electronic market,
`
`in accordance with the present
`
`invention, provides most of the information that is now
`
`available in the real pits and on the exchange floors and
`
`additional information and capabilities not currently
`
`available. For example, only the bids and offers that are
`
`at the market are presented, just as it is done in the
`
`physical pit. Also,
`
`the system tabulates all of the bids
`
`and offers by contract month and provides a short time
`
`frame report of who traded how much with whom.
`
`In
`
`addition,
`
`the system keeps a running tabulation of the
`
`trader's own position.
`
`The invention further facilitates
`
`the auction market by providing different screens for each
`
`of the different contract months and trading pits, but
`
`still allows traders to move freely between contract months
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`and trading pits.
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`It will be appreciated that those
`
`advantages are also provided to all market forms which can
`be practiced with the present invention.
`
`The present invention also reduces the back office costs
`
`to trading firms by reducing the volume of paperwork and
`
`consequent errors. For example,
`
`the system of the present
`
`invention automatically sends matched trades through for
`
`clearing through the clearing organization, further re-
`
`ducing costs by minimizing mismatched trades or out-trades.
`
`EHMEAI
`
`In accordance with the present invention, an apparatus
`
`for market trading comprises a host processor which selec-
`
`tively communicates with a plurality of user terminals,
`
`each user terminal including a selectively partitionable
`
`display by which information is conveyed to a user and
`
`means for entering information by which the user
`
`participates in the market.
`
`The system advantageously employs a high-resolution
`
`color display and a keyboard and hand-held mouse for infor-
`
`mation entry in each user terminal.
`
`The display identifies
`
`active traders by displaying a separate symbol or icon for
`
`each, e.g., either a blue square for those bidding to buy
`
`contracts or a red oval for those offering to sell.
`
`In one
`
`embodiment, the quantity of each trader's bid or offer is
`
`listed within each icon, as is each trader's badge acronym,
`
`so everyone knows who's buying and selling how much.
`
`In an
`
`alternative embodiment,
`
`the securities, securities options
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`or other commodities that are traded by each specialist may
`
`be listed within each icon with the specialist's acronym.
`
`Also displayed on the screen may be a box, which is
`
`preferably a contrasting color such as green, listing the
`
`trader who is currently making the market in a futures con-
`
`tract by being the first at the best bid or offer price.
`
`When that trader's price is hit, his order gets top priori-
`
`ty. Trading is done by using the mouse to move a cursor
`
`onto the icon of a trader and pushing a button, i.e.,
`
`"clicking" on the icon.
`
`In one embodiment, users also can type in the initials
`
`of several traders and push a single button to fill a
`
`larger order by simultaneous transactions with the several
`
`traders. Similarly,
`
`the present systems can automatically
`
`match orders, e.g., a large order with a plurality of
`
`smaller quantity traders, or orders for stocks or other
`
`securities as in the stock exchanges. The orders could be
`
`filled, for example, based upon price and time of receipt.
`
`The system permits scalping and spread trading by pro-
`
`viding selective display of information relating to differ-
`
`ent commodity contracts.
`
`EBEEF QE§CRI2'1’ION 01' EE DEEWLNGS
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`The objects and advantages of the present invention will
`
`be better understood after a reading of the following
`
`detailed description in conjunction with the drawings in
`
`which:
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`PCIYUS90/00878
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`Figure 1a shows a block diagram of a portion of an ap-
`
`paratus in accordance with the present invention;
`
`Figures lb and 1c show embodiments of other portions of
`
`an apparatus in accordance with the present invention:
`
`Figures 2a, 2b, and 2c show display partitions in ac-
`
`cordance with present invention:
`
`Figure 3 illustrates the presentation of supplementary
`
`information on a display:
`
`Figure 4 illustrates a display partitioned for an auc-
`
`tion market during auction market trading:
`
`Figures 5a, 5b, and 5c illustrate successive displays of
`
`trader identifying information;
`
`Figure 6 shows a display partitioned for "spread" trad-
`
`ing:
`
`Figure 7 shows a display partitioned for option trading;
`
`and
`
`Figure B shows a functional block diagram of the user
`
`terminal instructions.
`
`13 BCPIN
`
`In accordance with the present invention, an electronic
`
`method and apparatus are provided which facilitate the
`
`rapid exchange of large amounts of inferential and
`
`objective information without requiring a physical
`
`congregation of traders.
`
`Referring now to the Figures in which like reference
`
`numerals indicate like parts throughout, Figure la shows a
`
`block diagram of an apparatus in accordance with the
`
`present invention comprising a host processor 100 that
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`communicates with a plurality of user terminals 200 (only
`
`one of which £3 shown) via a communication link 300. As
`
`described in more detail below,
`
`the host processor 100 may
`
`advantageously be one of the "Nonstop" systems manufactured
`
`by Tandem Computers, Inc., and each user terminal 200 may
`
`be a microExplorerTm processor, made by Texas Instruments
`
`Inc. that includes a Model Macintosh II manufactured by
`
`Apple Computer, Inc., having a Radius display.
`
`It will,
`
`however, be appreciated that other suitable devices are
`
`commercially available.
`
`one embodiment of a user terminal
`
`200 is illustrated in Figure 1b which shows a
`
`high-resolution display 201, a keyboard 202 and a mouse
`
`203.
`
`The host processor 100 carries out a plurality of in-
`
`struction modules, which can be written in any suitable
`
`computer language, such as COBOL or TAL. One of a
`
`plurality of host receiver modules 110 receives
`
`communications from a selected one of the plurality of user
`
`terminals 200 that are logged into the system. Each host
`
`receiver module 110 is thus a port into the host processor
`
`100, which is activated initially by an attempt at
`
`connection by a user terminal.
`
`It will be appreciated that
`
`the greater the number of host receiver modules 110 that
`
`can be implemented by the host processor,
`
`the greater the
`
`number of traders who can participate in the market.
`
`In operation, a host receiver module 110 receives
`
`transactions and other information input to the system at a
`
`user terminal and electronically attaches or associates
`
`that information with a time of receipt indication.
`
`Such
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`time stamping is important for audit and integrity
`
`functions of the system, as well as for carrying out
`order—matching features of other types of trading system.
`
`The received transaction and time-stamp are then stored
`
`temporarily in a host-in queue in the receiver module, and
`
`the host receiver module 110 causes the host to send an
`
`acknowledgment of receipt to the transmitting user
`
`terminal.
`
`In some situations,
`
`the host receiver module 110
`
`would cause the host processor 100 to send a
`
`not—acknow1edged message to the sending user terminal so
`
`that the information could be retransmitted.
`
`Such situa-
`
`tions would typically occur when the host-in queue is
`
`temporarily full or when an error in the format of the in-
`
`formation, such as might arise from a noisy communication
`
`link, occurs.
`
`The host-in queue in the host receiver module 110 is
`
`advantageously realized by any suitable randomly accessible
`
`buffer memory rather than a first-in, first-out (FIFO)
`
`buffer. As described further below, by using a random
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`access buffer, the host processor can sort the information
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`resident in the buffer and selectively prioritize
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`processing of that information.
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`A receiver module 110 receives the information from the
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`user terminals 200 and places it in the host-in queue in a
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`predetermined time seguence.
`
`The receiver module 110 thus
`
`can advantageously arrange for processing of information
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`from a first user terminal before processing of information
`
`from a second terminal despite the host receiver's earlier
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`receipt of the second terminal’s information.
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`For example,
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`trades by a user in Japan could be processed by a Chicago-
`
`located host processor before trades from a Chicago user
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`are processed.
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`In this way, communications link delays can
`
`be compensated by the system so that the system access time
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`will be equal for all users.
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`In addition, the receiver
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`module 110 can implement the order-matching features of the
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`present invention for organizing information in price and
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`time sequences as in other types of trading system.
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`The Q-monitor module 120 examines the information and
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`time stamps in the host-in queue, and moves that
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`information into a delayed-host—in queue memory 130 at the
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`time determined by the receiver module 110 which placed the
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`information in the host-in queue. For audit and
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`record-keeping purposes,
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`the Q-monitor module 120 adds
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`another time-stamp to each packet of information, and it
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`moves and outputs the packets to the delayed-host-in queue,
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`which can he a FIFO buffer, for transfer to a transaction
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`processor 140.
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`The transaction processor 140 of the host processor 100
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`is initialized when the host processor is initialized.
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`In
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`a prototype version, initialization would consist,
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`in
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`pertinent part, of the loading into on-line memory from
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`bulk storage, e.g., a hard disk memory,
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`the host database
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`of authorized users, transactions, screen displays, etc.
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`After initializing, the transaction processor 140 accepts
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`information from FIFO 130.
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`The processor 140 preferably
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`time-stamps each information packet from the FIFO 130, and
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`verifies that the information is valid, e.g., represents a
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`type of transaction performed by the system.
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`If valid,
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`the
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`transaction processor carries out the transaction by updat-
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`ing host primary and secondary databases that reside, typi-
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`cally, on a hard disk memory. The primary and secondary
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`databases are part of the redundancy of the host processor
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`100 and thus contribute to the system's failure resistance.
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`After updating the host primary and secondary databases,
`the transaction processor 140 inserts into a host—out queue
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`the appropriate information for transmission to the user
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`terminals. For audit purposes it is advantageous to add
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`another time-stamp to each packet of information as it is
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`inserted in the host-out queue, and to write the
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`time-stamped information to an audit log.
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`In a prototype
`
`version, at predetermined intervals, the host database
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`would be dumped to bulk storage and, preferably, a backup
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`bulk storage, and primary and secondary system recovery
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`logs would be reset.
`
`In the prototype version,'the primary
`
`and secondary system recovery logs serve the purposes of
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`the host primary and secondary databases.
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`The information in the host-out queue is communicated to
`
`the user terminals through a plurality of host sender
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`modules 150,
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`there being one for each user terminal logged
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`into the system.
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`The host sender module also
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`advantageously time stamps the information as it sends it
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`to the user terminals, and receives an acknowledgement of
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`receipt message from the user terminal.
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`In the event of a
`
`transmission error, the host sender module retransmits the
`
`information to the user terminals.
`
`It will be appreciated
`
`that the host sender module also transmits a message
`
`indicating that the host processor is still "alive" in the
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`event that the host-out queue is empty due to a period of
`
`market inactivity.
`
`As described in more detail below, each user terminal
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`200 preferably includes a large proportion of the instruc-
`
`tions necessary for carrying out the present trading
`
`system. Those instructions are advantageously implemented
`
`in LISP, PASCAL or C, although LISP is preferable because
`
`of the flexibility it provides. Referring now to the user
`
`terminal 200 shown in the block diagram of Figure la which
`
`is representative of the plurality of user terminals which
`
`may be logged into the system simultaneously, a terminal
`
`receiver module 210 is activated by the attempted
`
`transmission from a host sender module 150 and receives the
`
`information transmitted. After time-stamping the received
`
`information, the terminal receiver module 210 places the
`
`information in a terminal-in queue 220, such as a FIFO
`
`buffer, and transmits an acknowledgement message to the
`
`host processor 100.
`
`If the terminal—in queue 220 is full
`
`or if an error in the information is detected by the
`
`terminal receiver module, the module 220 transmits a
`
`not-acknowledged message to the host processor.
`
`The
`
`terminal receiver module 210 also handles the "alive"
`
`message from the host processor 100 in the event of little
`
`market activity.
`
`Information in the terminal-in queue 220 is removed by a
`
`terminal transaction processor 230 which time-stamps the
`
`information and updates the terminal's database and
`
`displays in accordance with the information through a FIFO
`
`buffer 240. As described in more detail below,
`
`those
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`updates reflect market activity and certain other
`
`information requested by the user.
`
`The information in the FIFO 240 presented to a terminal
`
`user and information input to the terminal by the user are
`
`transmitted through a terminal user interface module 250.
`
`The module 250 has been designed using the AcTION!Tm
`
`software development tool available from Expertelligence,
`
`Inc. The ACTION£Tm tool greatly facilitates the writing of
`
`window—type code for controlling the display of the
`
`microExp1orerTm computer.
`
`The module 250 carries out a
`
`suitable log-in procedure to the host processor 100,
`
`thereby causing the host processor to initialize the user
`
`terminal database with suitable information from the host
`
`database.
`
`After the user terminal 200 is initialized via the ter-
`
`minal user interface module 250, a terminal sender module
`
`260 establishes communication with the host processor 100.
`
`The sender module 260 removes data from a terminal—output
`
`queue 270, such as a FIFO buffer, attaches a terminal ad-
`
`dress and time-stamp and communicates the information to
`
`the host. When the terminal-output queue 270 is empty for
`
`a predetermined time period,
`
`the sender module 260
`
`transmits a suitable terminal "alive" message to the host.
`
`The sender module 260 is also responsive to the
`
`acknowledge, not—acknowledge, error messages received at
`
`the terminal from the host processor.
`
`In a preferred embodiment, a large proportion of the
`
`instructions for carrying out the trading system of the
`
`present invention are written in LISP or C and are resident
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`in each user terminal 200.
`
`In this way, the system's pro-
`
`gramming is easy to accomplish and the capacity of the com-
`
`munication link 300 is minimized. Referring to Figure 8,
`
`which is a block diagram of the organization of the
`
`instructions included in each user terminal 200,
`
`the
`
`instructions 400 resident in a user terminal advantageously
`
`comprise a plurality 410-460 of "objects", as they are con-
`
`ventionally referred to in LISP programming, or
`
`"applications", as they are referred to when using the
`
`ACTION!Tm software development tool kit.
`
`It will be
`
`understood that "objects" and "applications" correspond
`
`generally to "subroutines" in other programming languages.
`
`They include data and logic structures,
`including suitable
`pointers and other indexes, that enable execution of user
`
`requests and direct the logical flow of program execution
`
`among several "objects." Although illustrated in terms of
`
`a futures market, it will be understood that the
`
`organization of the instructions for carrying out a stock,
`
`bond or other securities market would be substantially
`
`similar.
`
`The START SCREEN application 410 is a LISP object which
`
`is executed automatically at turn on of a user terminal
`
`200.
`
`The START SCREEN application 410 verifies proper
`
`initialization of the terminal 200 and queries the user
`
`whether logging into the system is desired.
`
`The LOGIN application 420 is executed in response to an
`
`appropriate user input, whether via mouse, keyboard or
`
`other entry means. The LDGIN application 420 queries the
`
`user for his user name and for his password which, when
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`input, are communicated to the host processor 100 for
`
`review.
`
`If the user name and password are authorized for
`
`access,
`
`the LDGIN application 420 responds to receipt of an
`
`authorization signal from the host processor by
`
`transferring execution to the MENU application 430.
`
`If
`
`authorization is denied, e.g., because the authorized user
`
`had previously requested his terminal to be "locked out"
`
`during his vacation, execution is returned to the START
`
`SCREEN application 410.
`
`once access is granted to the user terminal 200, a MENU
`
`application 430 is executed which queries the user as to
`
`which of the other applications, i.e., VIEW PIT 450 and EN-
`
`TER PIT 460, is desired. As described further below, the
`
`interrelation of the applications 430-460 is such that
`
`logical execution of the user terminal instructions can
`
`move rapidly and easily among the applications.
`
`The SELECT PIT application 440 responds to user inputs
`
`indicating which of the trading pits, e.g., financial secu-
`
`rities,
`
`farm commodities, etc., is desired for View or en-
`
`try. Similarly,
`
`the SELECT PIT application 440 could indi-
`
`cate which security or securities exchange is desired. De-
`
`pending on the pit selected and the action desired,
`
`logical
`
`execution of the user terminal program would be