Patent ID: 8660940

Claim:
A method of automatically trading options through an electronic option trading exchange system, comprising: receiving a first electronic communication from an electronic option trading exchange system, the first electronic communication indicative of a current price for an option traded on the electronic option trading exchange system; receiving electronic communications from an updating market feed, the electronic communications indicative of pricing of an underlying security of the option; storing, by an automated trading system, price data of the underlying security in a memory, wherein the price data is derived from the electronic communications from the market feed; calculating, by the automated trading system, a theoretical price of the option using at least the stored price data; automatically determining, based on the calculated theoretical price, whether the current price for the option satisfies a price condition for seeking an option transaction; automatically checking whether one or more safety criteria for the option transaction are satisfied; and when the price condition is satisfied and the one or more safety criteria are satisfied, automatically transmitting a second electronic communication to the electronic option trading exchange system in response to the current price for the option within 150 milliseconds of receiving the first electronic communication, the second electronic communication including either a quote or an order for the option capable of being matched to the current price by the electronic option trading exchange system.