Patent Publication Number: US-2005137955-A1

Title: Systems and methods for using a dedicated controller to facilitate foreign exchange pricing

Description:
CROSS REFERENCE TO RELATED APPLICATIONS  
      This application claims the benefit of U.S. Provisional Application Ser. No. 60/530,287, filed by Downie et al. on Dec. 16, 2003 and entitled “Systems and Methods For Using a Dedicated Controller to Facilitate Foreign Exchange Pricing”, which is incorporated herein by reference. 
    
    
     FIELD OF THE INVENTION  
      The present invention relates generally to the use of specialized computing devices, and, more particularly, to the use of a dedicated controller to facilitate pricing in the foreign exchange market.  
     BACKGROUND OF THE INVENTION  
      The foreign exchange market enables companies, fund managers and banks to buy and sell foreign currencies, if necessary in large amounts. The motivations behind this demand for foreign currency include capital flows arising from trade in goods and services, cross-border investment and loans and speculation on the future level of exchange rates. The sums involved are very large: estimated global turnover in all currencies in April 1998 was $1,490 billion, an increase of 26 percent over the past three years. Deals are typically for amounts between $3 million and $10 million, though much larger transactions are often done.  
      Foreign exchange trading may be for spot or forward delivery. Generally, spot transactions are undertaken for an actual exchange of currencies (delivery or settlement) two business days later (the value date). Forward transactions involve a delivery date further into the future, possibly as far as a year or more ahead. By buying or selling in the forward market a bank can, on its own behalf or that of a customer, protect the value of anticipated flows of foreign currency, in terms of its domestic currency, from exchange rate volatility.  
      Unlike some financial markets, the foreign exchange market has no single location—foreign exchange is not dealt across a trading floor. Instead, trading is via telephone and computer links between dealers in different centers and, indeed, different continents. London is the world&#39;s largest foreign exchange center: average daily turnover is $637 billion. This is approximately the same as the combined level of trading in the United States, Japan and Singapore.  
      Because of the fast-moving nature of the foreign exchange markets, it is clear that traders require fast, accurate and flexible controls over foreign exchange prices. Currently, traders utilize a number of technologies which allow clients to trade foreign exchange deals without any intervention from a salesperson or trader. The ability of traders to monitor and control these prices is vitally important.  
     SUMMARY OF THE INVENTION  
      A foreign exchange pricing system includes a computer system executing a foreign exchange pricing application, the foreign exchange pricing application capable of providing foreign exchange pricing information. A dedicated controller, including a joystick, is operatively coupled to the computer system. A user can employ the joystick to display or alter the pricing information. Preferably, the dedicated controller includes a combination of a keyboard and the joystick.  
      In an embodiment, the displayed pricing information relates to either spot rates or forward rates. The foreign exchange pricing system can determine that the joystick has moved in a certain position to invoke a specified procedure. For example, the procedure might perform setting a bid price, setting an ask price, publishing a bid and an ask price, resetting entered information, setting a minimum spread, setting a maximum spread, setting a normal spread, publishing spread control information, setting a skew, publishing skew control information, setting status control information, and so forth.  
      These and other aspects, features and advantages of the present invention will become apparent from the following detailed description of preferred embodiments, which is to be read in connection with the accompanying drawings. 
    
    
     BRIEF DESCRIPTION OF THE DRAWINGS  
       FIG. 1  depicts an exemplary screen for a foreign exchange pricing application;  
      FIGS.  2 ( a ) and ( b ) depict an exemplary dedicated controller which can be used for foreign exchange pricing; and  
       FIG. 3  depicts a block diagram of an exemplary foreign exchange pricing system using the dedicated controller. 
    
    
     DESCRIPTION OF PREFERRED EMBODIMENTS  
      The present invention provides a dedicated controller to facilitate foreign exchange pricing. The dedicated controller includes a joystick that can be used in conjunction with a keyboard. A foreign exchange pricing system includes a computer system executing a foreign exchange pricing application, the foreign exchange pricing application capable of providing foreign exchange pricing information. The dedicated controller, including the joystick, is operatively coupled to the computer system. A user can employ the joystick to display or alter the pricing information.  
      Referring to  FIG. 1 , a typical screen  100  for trading foreign currency is illustrated. This screen  100  includes the option of either displaying spot rates or forward rates. A tab  101  can be selected to display spot rates (as shown); alternatively, a tab  102  can be selected to display forward rates. Although the examples provided herein refer to spot rates, it is to be appreciated that the present invention also applies to forward rates. It is to be appreciated that the screen  100  is shown for illustrative purposes.  
      To execute a spot deal in the market, typically a dealer contacts his counterpart at a market-making bank and asks for the price in, for example “Euro-Kronor” (i.e., EURO to the Sweden Kronor). The market maker normally quotes a two-way price—that is, he stands ready to bid for or offer up to some standard amount. The difference between these two prices is known as the spread. For the sake of convenience, the market convention where trading is between banks is not to quote the “big figures”; instead, dealers tend to quote only the points (the last two figures of the price). As shown in box  103 , for example, if the rate for Euros (EUR) against the Sweden Kronor (SEK) was  =SEK 9.2589-91, then the market maker would quote “eighty-nine to ninety-one”: he bids for Kronor at  9.2589 and offers them at  9.2589. If the market maker wishes to deal he will hit, that is accept, one side of the price. Written confirmation of this contract will be exchanged and instructions concerning payment given, and passed on to the settlements staff who ensure that the respective currency amounts are transferred into the designated accounts on the value date.  
      In addition to displaying foreign exchange rates, the exemplary screen  100  can also allow the user to alter them. For example, if the market maker wished to alter the current rates for EUR/SEK, he would select box  103 , for the EUR/SEK rate, then enter the new rate in the Rate Display window  104 . The Rate Display window  104  contains information about spreads/skews and allows the user to alter these values and control the status of the rate. As implemented, this exemplary “child window” can be “docked” to the main window, or given focus, by pressing an appropriate combination of short-cut keys. As shown in  FIG. 1 , the Rate Display window  104  is docked.  
      As illustrated in  FIG. 1 , the Rate Display window  104  allows the user to enter a “bid” value into box  106 , an “ask” value into box  107 , and to publish this information by selecting button  108 . The Spread Control function  110  allows the user to set minimum, maximum and normal spreads on a rate, using boxes  110 ,  111 , and  112 , respectively. This spread information can be published by selecting button  114 . Additional features of the Rates Display window  104  include skew control  115  to allow the user to skew the published rate in either direction. For example, the user might apply a skew of 1.5 to the rate (i.e., skew the mid-points downwards by one and a half pips). Additionally, a status control feature  116  can be used to enable the user to control the selected rate on the underlying pricing engine. As shown rate status can include “firm”, “indicative”, “suspend”, and “default”.  
      FIGS.  2 ( a ) and ( b ) illustrate an exemplary dedicated controller  200  which can be used to for controlling a foreign exchange system such as the one described above. In the embodiment depicted in FIGS.  2 ( a ) and ( b ), the dedicated controller  200  comprises a combination keyboard  202  and a joystick  210 . The keyboard  202  can include a conventional keyboard. It may also feature additional special-purpose keys. However, the main focus of the present invention is the use of the joystick  204  for the purposes of quickly manipulating pricing information.  
      In general, a joystick is an input device that provides positional information to an application program. Typically, a joystick also includes one or more button for additional input. The joystick operates within a two- or three-axis coordinate system. Most operating systems, such as MICROSOFT WINDOWS, UNIX, and LINUX, provide joystick services that are loaded when the operating system is started.  
      An application program can query the current position of the joystick and/or whether its button(s) are depressed. For example, in the MICROSOFT WINDOWS environment, an application program may use the joyGetPos function to query a joystick for its position and button status. This function returns a pointer to a structure JOYINFO which appears as follows:  
                                                  Typedef struct {                         UINT wXpos;           UINT wYpos;           UINT wZpos;           UINT wButtons;           } JOYINFO;                      
 
 where the values wXpos, wYpos, and wZpos return the current X, Y, and Z values, respectively. The values for each of the joystick buttons can be obtained from the wButtons structure (e.g., JOY_BUTTON1, JOY_BUTTON2). 
 
      Referring to  FIG. 3 , a block diagram of software components of the system described above are illustrated. As depicted in this simplified diagram, a memory area  305  includes a Foreign Exchange Pricing Application  302  and a Device Driver Code Module  304 . The Foreign Exchange Pricing Application  302  could include the foreign exchange trading application described with respect to  FIG. 1 , or another such trading application. The Foreign Exchange Pricing Application  302  can interact with a Device Driver Code Module  304 , or with the operating system directly, to obtain joystick parameters and status information.  
      The invention will be clarified by the following example.  
     EXAMPLE 1  
      Table 1 illustrates various exemplary joystick positions to control a foreign exchange application. It is to be appreciated that the following is provided for illustrative purposes.  
      As shown in Table 1, when the joystick  204  is in the (0,1) position, the mid-price is moved upward. When the joystick  204  is in the (0,−1) position, the mid-price down is moved downward. A joystick  204  position of (1,0) causes the offer rate to be moved upward. A joystick  204  position of (−1,0) causes the bid rate down to be moved downward. It is also possible to employ button information. A joystick  204  is in the (1,0) position with the button is pressed causes the bid/ask spread to widen. In this case, the bid is decreased, the offer is increased, and the midpoint is maintained. A joystick  204  is in the (−1,0) position with the button is pressed causes the bid/ask spread to widen. In this case, the bid is decreased, the offer is increased, and the midpoint is maintained.  
                   TABLE 1                       Joystick Position   Function                  X = 0, Y = 1   PUSH MID-PRICE UP (NO SPREAD           CHANGE)       X = 0, Y = −1   PUSH MID-PRICE DOWN UP (NO           SPREAD CHANGE)       X = 1, Y = 0   PUSH OFFER RATE UP (WIDEN           SPREAD IN OFFER DIRECTION)       X = −1, Y = 0   PUSH BID RATE DOWN (WIDDEN           SPREAD IN BID DIRECTION)       X = 1, Y = 0, BUTTON 1   WIDEN SPREAD       X = 1, Y = 0, BUTTON 1   NARROW SPREAD                  
 
      Although illustrative embodiments of the present invention have been described herein with reference to the accompanying drawings, it is to be understood that the invention is not limited to those precise embodiments, and that various other changes and modifications may be affected therein by one skilled in the art without departing from the scope or spirit of the invention.