Patent ID: 7805358

Claim:
A system for managing trading orders, comprising: a processor; and a memory that stores a trade credit associated with a trader in a trader account, and that stores instructions which, when executed by the processor, direct the processor to: (a) receive a trading order from the trader, the trading order comprising an order to buy or sell a quantity of a financial instrument; (b) determine the trade credit associated with the trader, in which the trade credit cannot be used by the trader to fund any purchase of a financial instrument; (c) determine whether the trading order is (1) an aggressive trading order or (2) a passive trading order, in which an aggressive trading order comprises an order that can be at least partially matched for execution with a preexisting order received by the processor prior to receiving the trading order, and in which a passive trading order comprises an order that cannot be at least partially matched for execution with a preexisting order received by the processor prior to receiving the trading order; (d) if the received trading order is a passive trading order that cannot be at least partially matched for execution with a preexisting order received by the processor prior to receiving the trading order, then: increase the trade credit; and submit the received trading order for execution; and (e) if the received trading order is an aggressive trading order that can be at least partially matched for execution with a preexisting order received by the processor prior to receiving the trading order, then: calculate a decrease of the trade credit; and (1) based on a determination that subtracting the calculated decrease from the trade credit would not cause the trade credit to be less than a configurable threshold: submit the received trading order for execution; and subtract the calculated decrease from the trade credit; and (2) based on a determination that subtracting the calculated decrease from the trade credit would cause the trade credit to be less than the configurable threshold, prevent the execution of the received trading order.