0001
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`IBG 1012
`CBM of U.S. Patent No. 7,693,768
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`IBG 1012
`CBM of U.S. Patent No. 7,693,768
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`FOR THE PURPOSES OF INFORM4 NON ONLY
`
`Codes used to identify States party to I11: PCT on the front pages of pamphlcls publishing international
`applications under me PCT.
`'
`
`AT
`AU
`BB
`RE
`BF
`BG
`RI
`BR
`CA
`CF
`CG
`Oi
`CM
`DE
`
`Au:-rh
`Au:-ah
`Barbuda:
`Belfam
`Burkiu Fan
`
`Buh_ar'u
`
`Genus! African Repubfle
`Canon
`Suritzarhnd
`Cacmnnon
`Germany. Patient Repubic of
`Denmark
`
`II
`aaaaamesszggsg
`
`§s;=::==aaa:=m
`
`Spain
`Fahlld
`Fnnnu
`Chbon
`United Kingdom
`Hunglnr
`Iuly
`hm
`Demncntic People‘: Republic
`of Korea
`Repubfi: of Karel
`L:‘nchu=1u:in
`Sri Lani:
`LI.Immho|.I.r|
`Monaco
`
`Madagascar
`Mnli
`Mauritania
`Malawi
`Nuthethnds
`Norway
`Romania
`Sudan
`Swadln
`Senegal
`Soviet Union
`Chad
`Tenn
`Urlitad Smes of Amati:
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`0002
`0002
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`wo 9om571
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`- 1 '
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`PCl‘!US90ll}0878
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`snamsnm Lflmlfimflflfl EEEMSSEEEM
`
`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
`
`copyright rights whatsoever.
`
`BACKGROUND
`
`This application is a continuation-in-part of co-pending
`
`U.S. Patent Application Ser. No. EBJE6
`
`, 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.
`
`The futures exchanges house centralized auction markets
`
`(called designated contract markets) where standardized
`
`contracts, based on quantity and quality of commodity, are
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`bought and sold, for future delivery, by open outcry.
`
`It
`
`is important to note that the exchanges themselves do not
`
`trade commodity contracts, nor do they set prices at which
`
`contracts are traded.
`
`They merely furnish a place where
`
`‘
`
`market participants and their brokerage representatives can
`
`meet to buy and sell commodity futures contracts.
`
`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
`
`in a price for their products.
`
`A "local" can take
`
`long-term positions (i.e., weeks or months) or "scalp" over
`
`very short periods (liquidating positions within seconds or
`
`minutes of entering the transactions). He may trade in one
`
`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
`
`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-
`
`mercial processors, exporters, financial institution com-
`
`modity trading funds and the like.
`They may receive only a
`small percentage of the commissions 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
`
`c
`
`own account if he chooses, but can not use the public
`
`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 commodity 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-
`
`tions might result in trades at prices that are never offi-
`
`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 performance 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 (1984);
`
`Rothstein, "The Handbook of Financial Futures," McGraw Hill
`
`Book Company, New York (1984): 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 (.1984) .
`
`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 be-
`
`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 pfit: 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 3,581,072 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-
`
`g
`
`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~
`
`C111’.
`
`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.
`
`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.
`
`figfifiéfii
`
`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.
`
`§R;EF QEBCRIPTION OF Ififi DRAWINGS
`
`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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`Figure 1a shows a block diagram of a portion of an ap-
`
`paratus in accordance with the present invention:
`
`Figures 1b 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 8 shows a functional block diagram of the user
`
`terminal instructions.
`
`QETAILED DESCRIPTION
`
`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 is 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 but
`
`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—acknowledged 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
`
`access buffer,
`
`the host processor can sort the information
`
`resident in the buffer and selectively prioritize
`
`processing of that information.
`
`A receiver module 110 receives the information from the
`
`user terminals 200 and places it in the host—in queue in a
`
`predetermined time sequence.
`
`The receiver module 110 thus
`
`can advantageously arrange for processing of information
`
`from a first user terminal before processing of information
`
`from a second terminal despite the host receiver's earlier
`
`receipt of the second terminal's information.
`
`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
`
`are processed.
`
`In this way, communications link delays can
`
`be compensated by the system so that the system access time
`
`2
`
`will be equal for all users.
`
`In addition,
`
`the receiver
`
`module 110 can implement the order-matching features of the
`
`present invention for organizing information in price and
`
`time sequences as in other types of trading system.
`
`The Q-monitor module 120 examines the information and
`
`time stamps in the host-in queue, and moves that
`
`information into a delayed-host~in queue memory 130 at the
`
`time determined by the receiver module 110 which placed the
`
`information in the host-in queue.
`
`For audit and
`
`record-keeping purposes,
`
`the Q-monitor module 120 adds
`
`another time-stamp to each packet of information, and it
`
`moves and outputs the packets to the delayed-host—in queue,
`
`which can be a FIFO buffer, for transfer to a transaction
`
`processor 140 .
`
`The transaction processor 140 of the host processor 100
`
`is initialized when the host processor is initialized.
`
`In
`
`a prototype version, initialization would consist,
`
`in
`
`pertinent part, of the loading into on—line memory from
`
`bulk storage, e.g., a hard disk memory,
`
`the host database
`
`of authorized users, transactions, screen displays, etc.
`
`After initializing,
`
`the transaction processor 140 accepts
`
`information from FIFO 130.
`
`The processor 140 preferably
`
`time-stamps each information packet from the FIFO 130, and
`
`verifies that the information is valid, e.g., represents a
`
`type of transaction performed by the system.
`
`If valid,
`
`the
`
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`0016
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`- 15 _
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`transaction processor carries out the transaction by updat-
`
`ing host primary and secondary databases that reside, typi-
`
`cally, on a hard disk memory.
`
`The primary and secondary
`
`databases are part of the redundancy of the host processor
`
`100 and thus contribute to the system's failure resistance.
`
`After updating the host primary and secondary databases,
`
`the transaction processor 140 inserts into a host-out queue
`
`the appropriate information for transmission to the user
`
`terminals.
`
`For audit purposes it is advantageous to add
`
`another time—stamp to each packet of information as it is
`
`inserted in the host—out queue, and to write the
`
`time-stamped information to an audit log.
`
`In a prototype
`
`version, at predetermined intervals,
`
`the host database
`
`would be dumped to bulk storage and, preferably, a backup
`
`bulk storage, and primary and secondary system recovery
`
`logs would be reset.
`
`In the prototype version,'the primary
`
`and secondary system recovery logs serve the purposes of
`
`the host primary and secondary databases.
`
`The information in the host-out queue is communicated to
`
`the user terminals through a plurality of host sender
`
`modules 150,
`
`there being one for each user terminal logged
`
`into the system.
`
`The host sender module also
`
`advantageously time stamps the information as it sends it
`
`to the user terminals, and receives an acknowledgement of
`
`receipt message from the user terminal.
`
`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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`_ 15 _
`
`event that the host-out queue is empty due to a period of
`
`market inactivity.
`
`As described in more detail below, each user terminal
`
`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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`PCT/US90/00878
`
`..
`
`..
`
`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
`
`microExplorerTm 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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`0019
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`
`wo 90/11571
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`
`_ 13 -
`
`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
`
`ACTIONlTm 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 he 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 LDGIN application 420 is executed in response to an
`
`appropriate user input, whether via mouse, keyboard or
`
`other entry means.
`
`The LOGIN application 420 queries the
`
`user for his user name and for his password which, when
`
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`0020
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`
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`_ 19 _
`
`input, are communicated to the host processor 100 for
`
`review.
`
`If the user name and password are authorized for
`
`access,
`
`the LOGIN 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 directed to
`
`the VIEW PIT application 450 or the ENTER PIT application
`
`460.
`
`In addition, it will be understood that in response
`
`to the user input,
`
`the latest relevant information is
`
`communicated to the terminal 200 from the host processor
`
`100.
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`
`_ 20 _
`
`The VIEW PIT application 450 implements the aspects of
`
`the present trading system relating to identifying to the
`
`user who is in the trading pit selected for viewing. Thus,
`
`as described in more detail elsewhere,
`
`the application 450
`
`includes LISP objects for generating trader icons with
`
`proper identifications, for generating pop-up windows that
`
`provide additional identifying information about a selected
`
`trader icon, and for quitting the VIEW PIT application 450
`
`and returning to one of the other applications.
`
`The ENTER PIT application 460 is the LISP object which
`
`implements the active trading features of the present
`
`invention.
`
`The ENTER PIT application 460 advantageously
`
`comprises (1) a Pit Pane object for creating the trading
`
`arena portion of the display,
`
`(2) a Pit Markets object for
`
`creating the display portion relating to other markets in
`
`the pit displayed in the trading arena,
`
`(3) an other Pits
`
`object for creating the display portion relating to the
`
`user-selection of other pits and markets, and (4) a Supple-
`
`mentary Information object for creating the display portion
`
`relating to the user—selection of news services and tele-
`
`phone, as well as the personal trading history, recent
`
`trades list, trader entry/exit list, and for dealing with
`
`user entry of information.
`
`The Pit Pane object itself comprises (i) a p
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