`
`IBG 1024
`CBM of U.S. Patent No. 7,412,416 B2
`
`
`
`FOR THE PURPOSES OF INFORMATION ONLY
`
`Codes used to identify States pa11:y to the PC!" on the front pages of pamphlets publishing international
`applications under the PCT.
`‘
`
`AT
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`iE2Q899SE8¥EEE
`
`Germany. Federal Rcpubic of
`Denmark
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`%%“E%9¥38
`EEG“?
`
`Democratic People's Republic
`of Korea
`Republi: of Korea
`Liechtensein
`Sri lanka
`
`Madagascar
`Mali
`Mauritania
`Mahwi
`Netherlands
`Norway
`Romania
`Sudan
`Sweden
`Senegal
`Soviet Unbn
`Chad
`Toso
`United States of America
`
`aaaaanasszgggg
`
`0002
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`
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`wo 99/11571
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`' 1 '
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`PCT/US90/00878
`
`SDWHJHED LIVE MMflGfl?IRADINC SYSTEM
`
`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.
`$Eg%6
`, filed
`
`such as stocks, bonds, stock options, futures options, and
`futures contracts on commodities including agricultural
`products, financial instruments, stock market indices, and
`the like.
`
`clearinghouse.
`
`The futures exchanges house centralized auction markets
`(called designated contract markets) where standardized
`contracts, based on quantity and quality of commodity,
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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
`
`referred to as his "deck." He is allowed to trade for his
`
`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
`
`the same time. These condi-
`
`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.
`
`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 & Sons, New York (l984).
`
`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-
`
`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
`
`such as body language, as well as by
`more objective means like news tickers and electronic
`-bulletin boards.
`
`other automated trading systems and the like
`advantages.
`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;
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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,O72 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
`
`A closing
`price store is provided to record the last actual selling
`price for the goods.
`The closing price store and the main
`
`"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.
`
`, 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 T
`
`participants to View the market, just as if they were phys-
`
`ically present, encourages a competitive market and
`
`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
`
`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
`
`the system of the present
`For example,
`consequent errors.
`invention automatically sends matched trades through for
`clearing through the clearing organization, further re-
`
`ducing costs by minimizing mismatched trades or out—trades.
`
`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
`
`alternative embodiment,
`
`the securities, securities options
`
`In an
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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.
`
`BRIEF DESCRIPTION OF THE 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 la 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 8 shows a functional block diagram of the user
`
`terminal instructions.
`
`DETAILED 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 lb 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-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
`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,
`another time-
`
`the Q-monitor module 120 adds
`
`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.
`the transaction processor 140 accepts
`After initializing,
`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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`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
`
`In a prototype
`time-stamped information to an audit log.
`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.
`
`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.
`
`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
`
`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 ACTION1Tm
`
`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,
`
`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-
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`dress and time-stamp and communicates the information to
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`the host. When the terminal-output queue 270 is empty for
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`a predetermined time period,
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`the sender module 260
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`transmits a suitable terminal "alive" message to the host.
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`The sender module 260 is also responsive to the
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`acknowledge, not—acknowledge, error messages received at
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`the terminal from the host processor.
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`In a preferred embodiment, a large proportion of the
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`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.
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`In this way,
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`the system's pro-
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`gramming is easy to accomplish and the capacity of the com-
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`munication link 300 is minimized. Referring to Figure 8,
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`which is a block diagram of the organization of the
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`instructions included in each user terminal 200,
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`the
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`instructions 400 resident in a user terminal advantageously
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`comprise a plurality 410-460 of "objects", as they are con-
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`ventionally referred to in LISP programming, or
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`"applications", as they are referred to when using the
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`ACTION!Tm software development tool kit.
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`It will be
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`understood that "objects" and "applications" correspond
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`generally to "subroutines" in other programming languages.
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`They include data and logic structures,
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`including suitable
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`pointers and other indexes, that enable execution of user
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`requests and direct the logical flow of program execution
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`among several "objects." Although illustrated in terms of
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`a futures market, it will be understood that the
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`organization of the instructions for carrying out a stock,
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`bond or other securities market would be substantially
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`similar.
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`The START SCREEN application 410 is a LISP object which
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`is executed automatically at turn on of a user terminal
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`200.
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`The START SCREEN application 410 verifies proper
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`initialization of the terminal 200 and-queries the user
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`whether logging into the system is desired.
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`The LOGIN application 420 is executed in response to an
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`appropriate user input, whether via mouse, keyboard or
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`other entry means.
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`The LOGIN application 420 queries the
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`user for his user name and for his password which, when
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`, e.g., because the authorized user
`had previously requested his terminal to be "locked out"
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`during his vacation, execution is returned to the START
`SCREEN application 410.
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`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.
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`e.g., financial secu-
`is desired for view or en-
`farm commodities, etc.,
`rities,
`try. Similarly,
`the SELECT PIT application 440 could indi-
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`In addition, it will be understood that in response
`to the user input,
`the latest relevant information is
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`communicated to the terminal 200 from the host processor
`100.
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`The VIEW PIT application 450 implements the aspects of
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`the present trading system relating to identifying to the
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`user who is in the trading pit selected for viewing. Thus,
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`as described in more detail elsewhere,
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`the application 450
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`includes LISP objects for generating trader icons with
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`proper identifications, for generating pop-up windows that
`
`provide additional identifying information about a selected
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`trader icon, and for quitting the VIEW PIT application 450
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`and returning to one of the other applications.
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`The ENTER PIT application 460 is the LISP object which
`
`implements the active trading features of the present
`
`invention.
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`The ENTER PIT application 460 advantageously
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`comprises (1) a Pit Pane object for creating the trading
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`arena portion of the display,
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`(2) a Pit Markets object for
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`creating the display portion relating to other markets in
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`the pit displayed in the trading arena,
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`(3) an other Pits
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`object for creating the display portion relating to the
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`user—selection of other pits and markets, and (4) a Supple-
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`mentary Information object for creating the display portion
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`relating to the user—selection of news services and tele—,
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`phone, as well as the personal trading history, recent
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`trades list, trader entry/exit list, and for dealing with
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`user entry of information.
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`The Pit Pane object itself comprises (i) a price display
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`object for generating the blue and red price displays and
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`their included information for the current market, (ii) a
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`plurality of trader objects for generating the randomly
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`positioned trader icons in the trading arena, and (iii) a
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`priority box object for generating and controlling the
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`user's own trader icon in the trading arena,
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`bidding and one for offering.
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`The Pit Markets object which generates the portion of
`the ENTER PIT application's display relating to other mar-
`kets in the pit of the trading arena also advantageously
`executes a price display object and two trader objects, one
`for bidding and one for offering, for generating the user's
`own icon in the other markets displayed on the user's
`
`the other Pits object executes
`terminal screen. Similarly,
`a suitable price display object for the portion of the dis-
`play relating to other pits.
`It will be noted that since,
`in the preferred embodiment,
`the other pits‘ price displays
`do not include trader icons,
`the Other Pits object need not
`execute a trader object.
`
`the Supplementary Information object exe-
`Furthermore,
`cutes individual objects for carrying out the other aspects
`of the trading system, e.g.,
`the telephone,
`the display of
`which traders have entered and left the pit since the user
`has entered,
`the display of the most recent trades made in
`the pit, the user's personal trading history,
`the display
`of messages from the host processor 100 and user terminal
`200, and the user's input, e.g.,
`trading activity, screen
`formatting, etc.
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`It will be understood that subdividing the tasks of the
`terminal instructions into LISP objects in the manner de-
`scribed significantly minimizes the complexity of and ef-
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`fort necessary for the implementation of the present
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`system.
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`The bandwidth or other equivalent measure of capacity
`
`required of communication link 300 between each user termi-
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`nal 200 and the host processor 100 depends on the volume of
`
`transactions to be carried out by the present auction trad-
`
`ing system.
`
`It has been found that for after—hours trading
`
`at the Chicago Board of Trade, a normal telephone link's
`
`capacity of 9600 BAUD is sufficient because of certain
`
`efficiencies inherent in the Macintosh family of computers.
`
`Those efficiencies relate to the amount of data needed by
`
`one Macintosh computer to inform a second Macintosh of the
`
`contents of its output display, and are inherent to the
`
`Macintosh operating system.
`
`In a preferred embodiment of the invention, communica-
`
`tion between the user terminal Zoo and the host processor
`
`100 is carried out through a combination of two-way,
`
`inter-
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`active communication and one-way, "broadcast"
`
`communication.
`
`The "broadcast" feature is implemented by
`
`the host processor sending to all logged in user terminals
`
`the information necessary to update their displays in light
`
`of the trading system activity.
`
`Such bursts would
`
`preferably occur at predetermined intervals, e.g., one
`
`second.
`
`The remaining capacity of the communication link
`
`300 is then devoted to interactive communication. As
`
`described above, it will be understood that suitable
`
`selection of hardware components can minimize the link
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`capacity needed for the system. Of course, communication
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`technologies which provide very high capacity links, e.g.,
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`fiber optic links, television vertical blanking interval
`links, etc., can also be used.
`
`Recognizing that the broadcast of system updating in-
`
`formation occurs only at predetermined intervals,
`the trad-
`ing system preferably resolves timing conflicts by noting
`which of conflicting user actions arrived first at the host
`
`processor 100.
`
`For example, if a first user clicks on a
`
`second user's bid icon after the second user has changed
`his/her bid quantity but before the first user's display
`was updated by the host broadcast,
`the trading system
`
`preferably would indicate a completed trade for the second
`
`user's later quantity. Similarly, if the first user's
`
`clicking on the second user's bid icon arrives at the host
`
`processor before the second user's changing his/her
`
`quantity arrives,
`
`the trading system preferably indicates a
`
`completed trade at the second user's earlier quantity.
`
`It will be understood that the phrase "arrives at the
`host"
`
`terminals. As described above, such