OVER THE COUNTER BARTER SYSTEM MARKET PLACE AND METHODS

Systems, methods and computer-readable mediums are disclosed for receiving a first trading order from a first market participant, performing a first process for enabling a bartering of the first trading order with at least one second trading order received from a second market participant, and when the first process does not result in a complete clearing of the first trading order, performing a second process to clear any remaining portion of the first trading order through at least one liquidity provider registered with the trading platform.

TECHNICAL FIELD

The present technology pertains to a system that provides a multi-level automated and self-sufficient financial market place.

BACKGROUND

Over the Counter (OTC) markets present platforms (typically an online platform where trades are done electronically) and a way of transaction where currencies, commodities, stocks and other financial instruments are sold through a network of dealers and not through a formal exchange (like London Stock Exchange (LSE), New York Stock Exchange (NYSE), etc.). Unlike these formal exchanges, OTC markets are typically a “non-standardized platform or means of exchange and trade”. OTC markets provide and facilitate flexible market entry/exit for their participants. In the early days of OTC markets, all participants acted as an arm of the market in a non-centralized manner therefore permitting market players to build their own tailor-made contracts and flexible terms and conditions for participation.

Over the past decades and due to market integration aided by the emergence of various communication channels, many OTC markets have joined forces effectively forming a network of OTC markets, the continuous expansion of which is accelerated and aided by the exponential growth and prevalence of the internet and its direct application to markets and trading. Therefore, within a short span of time, OTC markets turned into large network(s) of companies, banks, brokerage, liquidity providers and other active market participants. Due to an increased client base, the volume of trades has grown substantially in OTC markets. Given the limited number of liquidity providers available in OTC markets, relative to other market participants, (e.g., retail, institutional and individual investors/participants), OTC markets have become a non-centralized (but effectively acting in a centralized manner) market of a few large players (liquidity providers) that manage and control over hundreds of thousands of market participants. The current structure has inherent risks, which are listed below.

First, clients typically have brokers as their counterparty and brokers in turn have liquidity providers and banks as their counterparty. In the event of a financial hardship or bankruptcy of any of the liquidity providers or banks, the effect can be immediately felt by the brokers and ultimately their clients.

Second, due to various reasons (political, economic, etc.), markets tend to be inherently volatile. Since there are limited number of counterparties in OTC markets and a disparity in terms of the number of clients and brokers versus the number of liquidity providers and banks, the risk level increases and in effect, each layer of the market carries its own risks as well as the risks that are “passed down” from the top in what is effectively a vertical flow of risk.

Third, to attract clients, brokers must offer a relatively high leverage to the clients. The leverage that the broker would receive from a liquidity provider will be significantly lower (e.g., in the range of 1:10 to 1:20). Accordingly, at any given time, the volume of trades far exceeds the available liquidity that can be reasonably furnished and made available to traders by liquidity providers and the banks.

Fourth, the disparities in the leverage levels that brokers offer and receive, as described above, create cash flow issues for the brokers and hence forces them to keep some of the trades in house and not pass them on. This is very risky for the stability of OTC markets.

Fifth, there are fewer risk takers (e.g., Liquidity Providers and Banks) in OTC markets as compared to other market players. Occasionally and in order to manage and mitigate their own respective risk, these risk takers change their trading rules, terms and condition which unilaterally protects and serves their interests but is very difficult for the retail brokers to accept, adopt, and comply with, since their interests conflict with those of the risk takers. This has created a big gap between the market layers.

Accordingly, a better OTC market system is needed to address the disparities and the inherent risks of current markets described above.

DETAILED DESCRIPTION

Overview

In one aspect, a system includes at least one memory having computer-readable instructions stored therein and one or more processors configured to execute the computer-readable instructions to receive a first trading order from a first market participant, perform a first process for enabling a bartering of the first trading order with at least one second trading order received from a second market participant, and when the first process does not result in a complete clearing of the first trading order, perform a second process to clear any remaining portion of the first trading order through at least one liquidity provider registered with the trading platform.

In another aspect, a non-transitory computer-readable, medium having computer-readable instructions stored thereon, which when executed by one or more processors, cause the one or more processors to receive a first trading order from a first market participant, perform a first process for enabling a bartering of the first trading order with at least one second trading order received from a second market participant, determine whether the first process resulted in a complete clearing of the first trading order, to yield a determination, and perform a second process to clear any remaining portion of the first trading order through at least one liquidity provider registered with the trading platform based on the determination.

In another aspect, a method includes receiving a first trading order from a first market participant, performing a first process for enabling a bartering of the first trading order with at least one second trading order received from a second market participant, determining whether the first process resulted in a complete clearing of the first trading order, to yield a determination, and performing a second process to clear any remaining portion of the first trading order through at least one liquidity provider registered with the trading platform based on the determination.

Description

References to one or an example embodiment in the present disclosure can be, but not necessarily are, references to the same example embodiment; and, such references mean at least one of the example embodiments.

Reference to “one example embodiment” or “an example embodiment” means that a particular feature, structure, or characteristic described in connection with the example embodiment is included in at least one example of the disclosure. The appearances of the phrase “in one example embodiment” in various places in the specification are not necessarily all referring to the same example embodiment, nor are separate or alternative example embodiments mutually exclusive of other example embodiments. Moreover, various features are described which may be exhibited by some example embodiments and not by others. Similarly, various features are described which may be features for some example embodiments but not other example embodiments.

Specific details are provided in the following description to provide a thorough understanding of examples. However, it will be understood by one of ordinary skill in the art that examples may be practiced without these specific details. For example, systems may be shown in block diagrams so as not to obscure the examples in unnecessary detail. In other instances, well-known processes, structures and techniques may be shown without unnecessary detail in order to avoid obscuring examples.

In the Background Section above, several flaws of current markets (e.g., OTC markets) are described. Hereinafter, an OTC market place system is presented and described that addresses the flaws listed above. Examples of this new OTC market place system include an OTC barter system (OBS) capable of providing a multi-level liquidity pool that, compared to currently existing OTC market places, lowers risk level, increases market transparency, provides and guarantees better pricing and offers a reliable execution system. OBS works on the basis of barter rules and spot trade details and creates a proper, safe and reliable new generation market place system. OBS also reduces market cost which can open new horizons to lower market spreads for the betterment of all market participants. Hereinafter, various aspects and examples of OBS will be described. However, before doing so, we will introduce a terminologies and concepts that will be referenced and used throughout the disclosure.

OBS market place is an entire system with various components, which will be further described below with reference toFIG. 1. OBS market place includes an OBS pool which refers to an exchange house that is the center of OBS market place. OBS market place further includes an OBS core, which is a set of computer-readable instructions being executed by one or more processors to make the OBS pool available to market participants and deliver the entire operational methodology of OBS market place, as will be described below. OBS provider refers to an institution (e.g., a bank, a financial institution, etc.) that provides OBS market place to interested market participants to facilitate trading therebetween. Hereinafter, OBS core is used to encompass the OBS, the OBS pool and the OBS provider defined above.

OBS core has multiple levels through which a trade sequentially moves to be cleared. These levels are referred to as barter level (where attempts are made to clear a trade via bartering as will be described below), an excess level (where any remaining and excess level of open positions/exposures of market participants are cleared with one or more liquidity providers) and one or more nettling levels, all of which will be described below.

Market participants can register with OBS provider as one or more of barter partner (BP), a broker and a liquidity provider (UP), the roles of each of which in OBS market place will be defined and described below.

FIG. 1illustrates an example of a market place, according to an aspect of the present disclosure. As mentioned above, a market place (an OBS market place) can be defined as a complete system in which parties, through their corresponding trading platforms connect to what is referred to as a core (liquidity pool) and participate in selling and buying various types of products (e.g., financial products).

InFIG. 1, market place100includes an OBS core102, which may also be referred to as OBS liquidity pool102, OBS pool102and/or liquidity management system102. Furthermore, market place100can also be referred to as OBS market place100or OBS market100.

In one example, OBS core102ofFIG. 1, is a multi-level pool that includes an aggregator103, a netting pool (netting level)104, a barter level pool (barter pool or barter level)105, aggregator106, an excess level pool (excess pool or excess level)107and aggregator108.

Market place100can also have various market participants connected to OBS core102. For example, market participants registered as barter partners (BPs) (e.g., BPs1,2,3and4(designated with reference numeral109inFIG. 1)) can connect to OBS core102via respective connections109-1. Market participants registered as brokers (e.g., brokers1,2and3(designated with reference numeral110inFIG. 1)) can connect to OBS core102via respective connections110-1. Furthermore, market participants registered as liquidity providers (LPs) (e.g., LP1, LP2and LP3(designated with reference numeral111inFIG. 1)) can connection to OBS core102via respective connections111-1.

Aggregator103, aggregator106and aggregator108can each be a module configured to receive liquidity information from all market participants connected to OBS core102and combine (aggregate) the received liquidities into a single stream to be transmitted to all connected market participants. For example, aggregator103can receive liquidities from BPs109and brokers110in netting pool104as well as liquidities from barter pool105and/or excess pool107and combine them into a single stream to be transmitted back to BPs109and brokers110and/or to be forwarded to barter pool105. Furthermore, aggregator106can receive liquidities provided by aggregator103to barter pool105and feed the same (together with trade information available at barter pool105) back to BPs109. Furthermore, aggregator108can receive liquidities from LPs111in excess pool107(together with trade information received at excess pool107from barter pool105) and transmit aggregated liquidities/trade information back to LPs111. In one example, aggregators106and108can also be referred to as aggregator and trade match engine106and108, respectively.

As indicated above, market place100further includes different types of market participants (MPs). Market participants can use any type of known or to be developed platform such as an application program interface (API), gateways and bridges, through which a party (e.g., a trading party) can connect to OBS core102for taking part in a transaction.

As shown inFIG. 1, some MPs can register with OBS core102as bartering partners (BPs)109. Each BP109can communicate with OBS core102via any known, or to be developed, communication means109-1(e.g., wired and/or wireless communication means). BPs109can engage in both buying and selling exposures open positions such as various types of financial products (e.g., stocks, bonds, currencies, etc.). Therefore, inFIG. 1, communication between BPs109and OBS core102are illustrated as a bi-directional communication.

Furthermore, some MPs can register with OBS core102as brokers110. Each broker110can communicate with OBS core102via any known, or to be developed, communication means110-2(e.g., wired and/or wireless communication means). Brokers110, as will be described below, are only engaged in clearing their open positions exposures through OBS core102. Therefore, inFIG. 1, communication between brokers110and OBS core102are illustrated as a unidirectional communication from each broker110to OBS core102.

Moreover, some MPs can register with OBS core102as liquidity providers (LPs)111. Each LP111can be any type of financial institution, bank, etc., and can communicate with OBS core102via any known, or to be developed, communication means111-1(e.g., wired and/or wireless communication means). LPs111, as will be described below, are only engaged in clearing open positions of OBS core102, which servers to provide sufficient liquidity to the market. Therefore, inFIG. 1, communication between LPs111and OBS core102are illustrated as a unidirectional communication from OBS core102to each LP111.

While a specific number of each type of market participant (e.g., BPs, brokers and LPs) is shown inFIG. 1, the present disclosure in not limited thereto and any number of market participants, from a few to thousands and more, can interact through their respective platforms and OBS core102to engage in and conduct trading. Furthermore, BPs109, brokers110and LPs111may collectively be referred to, hereinafter, as simply market participants.

Furthermore, for sake of simplicity and better explanation of the direction of traders/clearing, BPs109are shown inFIG. 1to be connected separately to netting pool104(for placing trades with OBS core102) and barter pool105(for clearing/accepting trades with OBS core102). However, these separately shown MPs109can be the same (e.g., BP1shown horizontally at the bottom of OBS core102can be the same as BP1shown vertically to the right of OBS core102).

Various hardware and software components of OBS market place100, an interaction among which enables the creation and functioning of OBS market place100will be further described with reference toFIGS. 2 and 3.

OBS core102can be a pool through which market participants can exchange/trade, various (any type) of products, including but not limited to, various types of Over the Counter (OTC) commodities and financial products. Such products include, but are not limited to, stocks, futures, commodities, currencies, metals, raw material, derivatives, insurance, mortgages, bonds, government securities, certificates of deposit, credit default swaps, collateralized debt obligations, contract for differences, etc.

The OBS market place created through interaction of OBS core102with market participants such as BPs109, brokers110and LPs111, can be any known, or to be developed, type of market including, but not limited to, an insurance finance market, a syndicated load market, a religious based finance market an Islamic finance market), etc., and/or any combination thereof.

BPs109, brokers110and LPs111(market participants) can be any one of, but not limited to, a broker, a bank, an institutional investor, an investment bank, insurance providers, credit card agencies, government sponsored entities, etc. Market participants can register with OBS core102for conducting trades using any known or to be developed electronic device that is capable of connecting to remote devices (including OBS core102) over the Internet.

Through execution of appropriate computer-readable instructions, OBS core102can control and manage executions of trades, methods of trade, settlements and risk measurements. OBS core102can also navigate market liquidity.

OBS core102, as mentioned above, can be a multi-level liquidity pool with nettling pool104, barter pool105, netting pool106and excess pool107. A pool can simply refers to a collection of trades. For example, nettling pool104refers to a collection of trades (every trade received at OBS core102). Two or more trades in netting pool104can have opposite order types (e.g., buy v. sell) for the same symbol or product (e.g., same stock, commodity, currency exchange, etc.) such that the trades (or at least portions thereof) can be cleared with one another (this, as will be described below with reference toFIG. 4, is referred to a trade netting process).

Barter pool105refers to a collection of open exposures and trades that, after going through the trade netting process, still have at least a portion thereof open. OBS core102can then attempt to clear the trades in barter pool105through a process of bartering trades (bartering process), as will be described below with reference toFIG. 4.

Finally, excess pool107is a pool of trades that, after going through the trade netting processes and a bartering process, are still open. These trades are referred to as excess trades. Herein and as will be described below, OBS core102clears the excess trades through LPs111.

Accordingly, a trade placed by a market participant in OBS core102, sequentially moves through multiple pools, as shown by arrow112, where at each stage, OBS core102attempts to clear the entirety or a portion thereof. Therefore, in one example, the size of each pool (number of trades in each pool) are reduced as we move from netting pool104to excess pool107, since at each stage of this sequential move, a number of trades placed with OBS core102are cleared. This will be further described below with reference toFIG. 4.

Furthermore, as shown inFIG. 1, OBS core102can also have a price feeder115, which can collect various prices (offered and asked prices) for various products dealt between MPs via OBS Core102. For example, price feeder115can receive (monitor) information on various prices from excess pool107, barter pool105and netting pool104as such information are exchanged between these pools. This would in turn provide better market transparency and lower market volatility for all MPs participating in placing/clearing deals with OBS core102.

In addition to various components of OBS market place100described above, OBS market place100can have other components associated therewith. For example, OBS core102can have a payment processing system for processing payments associated with the trades conducted by market participants on OBS core102(e.g., for processing payments made for security collateral, clearing trades, etc.). The payment processing system can be any know or to be developed payment processing system. Furthermore, OBS core102can provide market participants (BPs, brokers and LPs) with market depths. As OBS market place is a completely transparent market place, ail market participants can request to trace and track their trades. In response to such requests, OBS core102can provide all market participants with the ability (e.g., data log, visual display, etc.) to trace and track their trades.

One aspect of OBS core102is that market participants104can register with OBS core102and function as different types of market players. For example, a market participant can register with OBS core102as a BP109. A registered BP109can act as a broker110and/or an LP111. While a BP can offset its exposure with OBS core102, the same BP can also be a LP to accept one or more exposures of OBS pool. By allowing BPs to function as LPs and/or brokers, OBS core102enables an expansion of market depth and increases OBS core pool users (market participants). With an increase in market participants, number of liquidity providers can also increase and with distribution of trades among many market participants, risk in OBS market place is lowered.

In one example, an LP cannot offset its exposure (open trades) with OBS pool but can only clear (receive) any excess level exposure of OBS core102that is present in excess pool107. On the other hand, a broker110can offset its exposure with OBS core102but will not receive any exposure trout OBS core102. Therefore, when a market participant registers with OBS core102as a broker110, such market participant cannot function as BP109or an LP111. Furthermore, when a market participant register with OBS core102as a LP, such market participant cannot function as a broker110or BP109.

One aspect of OBS core102is that it enables different market participants to barter with one another (e.g., exchange trades with trades) before resorting to liquidity providers in order to clear their trades. This will be further described below.

Another aspect of OBS core102is that, relative to traditional exchanges and OTC markets, market participants such as brokers, only need to deposit a small amount of cash (security collateral) with OBS core102for conducting trades (e.g., only 25% of the value of their trades). This is referred to as a barter credit method (BCM). In this method, after a market participant has met credit rating and other relevant requirements, the market participant deposits only a small amount (e.g., 25% of the value of their trade) with OBS core102. This will also be further described below.

In view of the above and relative to existing OTC platforms, the exposure of market participants to market volatility (market risk) and financial soundness of liquidity providers as well as counterparty risks (e.g., BP risks) are reduced.

FIG. 2illustrates an example network device suitable for performing switching, routing, load balancing, and other networking operations, according to an aspect of the present disclosure. In one example, network device200can be the same as OBS core102or any one of BPs109, brokers110and/or LPs111, described above with reference toFIG. 1. Network device200includes a central processing unit (CPU)204, interfaces202, and a bus210(e,g., a PCI bus). When acting under the control of appropriate software or firmware, CPU204is responsible for executing packet management, error detection, and/or routing functions, CPU204preferably accomplishes all these functions under the control of software including an operating system and any appropriate applications software, CPU204may include one or more processors208, such as a processor from the INTEL X86 family of microprocessors. In some cases, processor208can be specially designed hardware for controlling the operations of network device600. In some cases, a memory606(e.g., non-volatile, RAM, ROM, etc.) also forms part of CPU604. However, there are many different ways in which memory could be coupled to the system.

Network device200can also include an application-specific integrated circuit (ASIC), which can be configured to perform routing and/or switching operations. The ASIC can communicate with other components in network device200via bus210, to exchange data and signals and coordinate various types of operations by network device200, such as routing, switching, and/or data storage operations, for example.

FIG. 3illustrates a computing system architecture, according to an aspect of the present disclosure. As shown inFIG. 3, components of system300are in electrical communication with each other using a connection305, such as a bus. Exemplary system300includes a processing unit (CPU or processor)310and a system connection305that couples various system components including system memory315, such as read only memory (ROM)320and random access memory (RAM)325, to processor710. System300can include a cache of high-speed memory connected directly with, in close proximity to, or integrated as part of the processor310. System300can copy data from memory315and/or storage device330to cache312for quick access by processor310. In this way, the cache can provide a performance boost that avoids processor310delays while waiting for data. These and other modules can control or he configured to control the processor310to perform various actions. Other system memory315may be available for use as well. Memory315can include multiple different types of memory with different performance characteristics. Processor310can include any general purpose processor and a hardware or software service, such as Service1332, Service2334, and Service3336stored in storage device330, configured to control processor310as well as a special-purpose processor where software instructions are incorporated into the actual processor design. Processor310may be a completely self-contained computing system, containing multiple cores or processors, a bus, memory controller, cache, etc. A multi-core processor may be symmetric or asymmetric.

To enable user interaction with the computing device300, an input device345can represent any number of input mechanisms, such as a microphone for speech, a touch-sensitive screen for gesture or graphical input, keyboard, mouse, motion input, speech and so forth. An output device335can also be one or more of a number of output mechanisms known to those of skill in the art. In some instances, multimodal systems can enable a user to provide multiple types of input to communicate with computing device300. The communications interface340can generally govern and manage the user input and system output. There is no restriction on operating on any particular hardware arrangement and therefore the basic features here may easily be substituted for improved hardware or firmware arrangements as they are developed.

FIG. 4describes a method of facilitating and managing trades by OBS core ofFIG. 1, according to an aspect of the present disclosure.FIG. 4is described from the perspective of OBS core102. However, those having ordinary skill in the art would readily understand that the functions performed by OBS core102is carried out by one or more processors implementing one or more set of instructions stored on one or more memories as described above with reference toFIGS. 2 and 3, which transform the one or more processors into a special purpose processor for implementing the functionalities of OBS core102described hereinafter.

At S400, OBS core102receives a registration request from one or more market participants to register with OBS core102as a market player. As described above, any one market participants can register as one of a BP (e.g., one of BPs109), a broker (e.g., one of brokers110) or a liquidity provider (e.g., one of LPs111), as shown and described above with reference toFIG. 1. OBS core102then registers anyone of market participants from which a registration request is received (e.g., by having market participants provide relevant information, agree to terms and conditions, etc.).

Upon registration of one or more market participants with OBS core102, at S402, OBS core102receives a trading order (e.g., sell or buy) from a registered market participant. For example, OBS core102receives an order (a currency trade order) to buy $1M of EURUSD from a BP109. The trading order received at S402can have a requested price, (e.g., a bid price) associated therewith.

At S404, OBS core102determines if required security collateral has been deposited by the registered BP109from which a trading order is received at S402. The required security collateral can be agreed upon between OBS core102and BP109at S400or before the trader is processed. For example, the required security collateral can be set to 25% of BP109's average daily trading value. In the above example of a trade valued at $1M, BP109has to deposit $250,000 with OBS platform102. Other benchmarks can also be used for determining the amount of required security collateral (e.g., average weekly trades of BP109, average daily trades of BPs that conducts sales having more or less the same volume or value on a daily, weekly, monthly, annually basis, as BP109, etc).

If at S404, OBS core102determines that the required security collateral is not deposited by BP109, then OBS core102informs BP109to make the required deposit before the trade can be processed.

If at S404, OBS core102determines that the required security collateral is deposited by BP109, then at S406, OBS core102accepts the trading order (e.g., the $1M buy order for EURUSD, described above) received at S402.

At S408, OBS core102determines if trade netting (which may also be referred to as trade netting process or simply netting process) is possible. Trade netting refers to process according to which at least a portion of a trade can be cleared with an opposite order type for the same symbol or product (depending on factors such as the buy and sell asking prices, etc.) available in netting pool104. In other words and in the example of the buy order for $1M in EURUSD, the trade netting process determines if a sell order (which is opposite the buy order type) for a certain amount (e.g., more or less or equal to $1M EURUSD) exist in the pool so that the two orders (or at least a portion thereof) can be cleared with one another.

Accordingly, in performing S408, OBS core102determines if at least one trade of the same symbol or product for which the trading order is received at S402, exists in netting pool104and if such at least one trade has an opposite order type relative to the order type of the trading order received at S402. If at least one such trade exists in netting pool103, then OBS core102determines that trade netting is possible.

If at S408, OBS core102determines that trade netting is possible, at S410OBS core102performs the trade netting process to clear at least a portion of the trade order received at S402. However, if at S408, OBS core102determines that trade netting is not possible, OBS core102skips S410and proceeds to S414as will be described below.

At S412, OBS core102determines if any portion of the trading order received at S402is still open (outstanding) after performing the trader netting process at S410. If at S412, OBS core102determines that the trade order received at S402has been cleared through the trade netting process at S410then the process reverts back to S402where OBS core102repeats S402to S412. In one example and after S412, the process may revert back to S400instead of S402when a new market participant is first joining/attempting to register with OBS core102.

However, if at S412, OBS core102determines that the trade order received at S402is still open (at least a portion thereof is open) after the trade netting process of S410, then at S414, OBS core102conducts a search for bartering partners. In other words, OBS core102conducts a search among trades available in barter pool105in order to determine if any comparable orders by one or more other BPs (e.g., order(s) by other BPs109) have been placed with OBS core102so that OBS core102can exchange/barter the remaining portion of the trading order received at S402with one or more such comparable orders/trades. This search can be for trades with similar and/or same bid/ask prices as that of the trading order received at S402.

In one aspect of the present disclosure, as numbers of participants in barter pool105of OBS core102is more than currently existing OTC market places, the catching (desired) prices are much easier to come across and also results in very tight spreads in bid/ask prices. Furthermore, OBS core102has the advantage that when one BP rejects a trade (e.g., the trading order received at S402), OBS core102does not reject the trade but simply searches for other available trades by other BPs109willing to barter trades.

For example, in addition to the trading order at S402received at OBS core102, another order to sell $1M of GBPUSD is also received for sale on OBS core102. This sell order could have been placed by another BP109registered with OBS core102. In another example, instead of one sell order for $1M of GBPUSD, OBS core102can have several smaller sell orders available thereon (e.g., sell order for $200K on EURUSD, sell order for $500K of gold and sell order for $250 k of stocks of company A).

If at S414, OBS core102determines that at least one comparable order (e.g., sell order) exists in barter pool105, then at S416. OBS core102facilitates a bartering process between BP109(from which the buy trading order at S402is received) and one or more of BPs109(from which the sell trading order(s) are received, as in the example described above). In other words, OBS core102enables BPs109to exchange (barter) a buy order for $1M of EURUSD with a sell order of $1M of GBPUSD (or in the example above, with one or more of sell order for $200K on EURUSD, sell order for $500K of gold and sell order for $250 k of stocks of company A).

At S418, OBS core102determines if there are any excess trades left on OBS core102, after the trade netting and bartering processes of S408to S416, that need to be cleared. For example, in performing S416, OBS platform102may only be able to allow trade netting and bartering of half of the example buy order for $1M of EURUSD. For example, at S416, OBS platform102is able to complete (fulfill) $250K of the $1M buy order on EURUSD through the trade netting process and $500 k of the $1M buy order of EURUSD through the bartering process with $500K sell order on GBPUSD. Accordingly, OBS core102determines that a trade/exposure amounting to $25K of the $1M buy order on EURUSD is still open.

If at S418, OBS core102determines that no excess trade is left open on OBS core102, the process reverts back to S402and OBS core102repeats S402to S418(or S400to S418if a new market participant is attempting to register and place an order with OBS core102). However, if at S418, OBS core102determines that there is at least one excess trade left open on OBS core102then at S420, OBS core102performs another trade netting in an attempt to clear the open portion of the trading order received at S402. This trade netting process is performed in exactly the same manner as S408and S410described above.

At S422, OBS core102determines if there are any excess trades left open after performing the trade netting process at S420. If at S422, OBS core determines that no excess trade is left open after the trade netting process at S420, the process reverts back to S402and OBS core102repeats S402to S422(or S400to S422if a new market participant is attempting to register and place an order with OBS core102).

However, if at S422, OBS core102determines that there is at least one excess trade left open on OBS core102after S420, then at S424, OBS core102clears the excess trade using one or more liquidity providers that are wining to do so and are registered with OBS core102to clear the remaining portion of the buy order for $1M of EURUSD).

Thereafter, the process reverts back to S402and OBS core102repeats S402to S424(or S400to S424if a new market participant is attempting to register and place an order with OBS core102).

In one example, a market participant can register as a broker with OBS core102such as broker110. Accordingly, when a trading order is received from a broker110at S402, broker110is interested in clearing the trading order with OBS core102as a liquidity provider and does not receive any exposure (open positions) in exchange, from other market participants via OBS core102. In other words, OBS core102functions as a LP for broker110. Therefore, by performing S410-S424, broker110clears its position (trading order) with OBS core102.

Examples of OBS core102and the process implemented thereby, as described above, provide various advantages over existing systems that provide an OTC trading platform.

OBS core102and the process implemented thereby (1) enables market participants, BPs and brokers to keep less cash (security collateral) with OBS core102, compared to what brokers have to keep with liquidity providers in current OTC trading markets; (2) enables reduction in vulnerability to financial hardship of counterparties and liquidity providers because of said lower deposit with liquidity providers; (3) enables lowering of market risk where there is market volatility due to an aggressive trading; (4) enables market participants, BPs and brokers to keep more cash in house to maintain withdrawal of their clients and thus increase their service quality for their clients; (5) enables market participants, BPs and brokers to clear more volume of trades they are exposed to given the availability of more cash in house; (6) enables reduction in backing transaction fees and thus providing cheaper service for clients; (7) spreads the overall risk among a large number of market participants; (8) eliminates any top of the book liquidity issues; (9) offers diversified settlement options in the event and instance of large trade volumes; (10) increases market depth; and (11) enables reduction in spreads and better execution due to lower overall costs; and (12) increases flexibility between market participants in case of leverage and contracts. Given that the retail participants can be one of the main market players (e.g., a liquidity provider), OBS core102results in no concentration and/or monopolization in market participation (as opposed to the case currently in OTC markets with very few liquidity providers practically controlling and dictating market behavior).

Although a variety of examples and other information was used to explain aspects within the scope of the appended claims, no limitation of the claims should be implied based on particular features or arrangements in such examples, as one of ordinary skill would be able to use these examples to derive a wide variety of implementations.

Further and although some subject matter may have been described in language specific to examples of structural features and/or method steps, it is to be understood that the subject matter defined in the appended claims is not necessarily limited to these described features or acts. For example, such functionality can be distributed differently or performed in components other than those identified herein. Rather, the described features and steps are disclosed as examples of components of systems and methods within the scope of the appended claims. Moreover, claim language reciting “at least one of” a set indicates that one member of the set or multiple members of the set satisfy the claim.