Chicago Board Options Exchange, Incorporated

Cboe Exchange, Inc.

Anthony Montesano

Eileen C Smith

Edward T Tilly

Stuart J Kipnes

Anthony J Carone

Mark A Esposito

James Gazis

Gordon D Evora

Ross G Kaminsky

Richard A Angell

David J Schmitz

A system and method of allocating orders in an exchange configured for trading by a combination of electronic and open-outcry trading mechanisms is provided. One method includes permitting multiple quotes to be disseminated to the market, but limiting market making to only those entities having a physical presence on the floor of the exchange. Methods of enhancing the hybrid electronic and open-outcry exchange also include automatically eliminating crossed quotes and locked quotes while permitting certain orders to trade against locked quotes.

Hybrid trading system for concurrently trading securities or derivatives through both electronic and open-outcry trading mechanisms

A method of providing an automated auction for internalization for the purchase or sale of securities or derivatives in an exchange is disclosed. The method may include receiving an order at an electronic trade engine, disseminating a request for price message to at least one user in response to receiving the order, receiving a one-sided response message representative of a participant-type in response to the request for price message, selecting an allocation algorithm from a plurality of allocation algorithms, initiating the selected allocation algorithm and allocating the order according to the participant-type upon termination of the selected auction. The system may include an electronic trading engine configured to disseminate an auction message in response to an order, a database of allocation algorithms, and a trade processor for initiating an auction according the one of the allocation algorithms and terminating the auction upon defined early termination events.

Method and system for providing an automated auction for internalization and complex orders in a hybrid trading system

An automated trading exchange having integrated quote risk monitoring and quote modification services is disclosed. The automated trading exchange is configured to receive orders and quotes, and have associated trading parameters such as a risk threshold. The automated trading exchange typically generates a trade by matching the received orders and quotes, where quotes belong to an overall quote group, to previously received orders and quotes. The automated trading exchange otherwise stores each of the received orders and quotes if a trade is not generated. The automated trading exchange then determines whether a quote has been filled as a result of the generated trade, and if so, determines a risk level and an aggregate risk level associated with said trade. The computer compares the aggregate risk level with the market-maker's risk threshold, and if the threshold is exceeded, automatically modifies at least one of the remaining quotes in the quote group.

Automated trading exchange system having integrated quote risk monitoring and integrated quote modification services

An automated system for matching orders from a virtual trading crowd in an exchange configured for trading securities or derivatives is disclosed including an electronic trade engine operative to receive an order or a quote for a security or derivative at the exchange, the trade engine further operative to disseminate a request for a price message to a plurality of market makers quoting a class in response to receiving the order or the quote, an electronic book in communication with the electronic trade engine, the electronic book operative to store at least one order or quote received by the electronic trade engine, a database including an allocation algorithm, the database in communication with the electronic trade engine, and a trade processor in communication with the database, the trade processor operative to analyze and execute orders or quotes according to the allocation algorithm selected from the database.

Automated trading system for routing and matching orders

A method and system is provided for allowing a participant that generates order flow to participate in automated execution trades that are generated by the participant's order flow, without affecting the price of execution to the retail customer. The method and system automatically assigns a stated percentage of the contra-side of each customer trade to the participant that sent in the order flow.

Automated execution system having participation

A method of providing orders to a virtual trading crowd in an exchange prior to automatically linking the order to an away market is disclosed. The method may include receiving a marketable order for a security or derivative at the exchange, wherein the exchange has a price that differs from a national best bid or offer price, routing the marketable order to a trade engine, disseminating a request for price message to all market makers quoting a class in response to receiving the marketable order, the request for price message including a price equal to the national best bid or offer price, receiving a response message at the electronic trade engine in response to the request for price message from at least one market maker, initiating a quote trigger, wherein the quote trigger occurs for a period of N seconds, and allocating the order according to an allocation algorithm, wherein an order size of each market maker is capped to prevent inflation of an allocated portion of the order.

Method and system for providing order routing to a virtual crowd in a hybrid trading system

A system and method of allocating orders in an exchange configured for trading by a combination of electronic and open-outcry trading mechanisms is provided. One method includes permitting multiple quotes to be disseminated to the market, and providing market making rights of varying degrees to entities having a physical presence on the floor of the exchange and entities remotely located away from the trading floor. The system includes a trade engine configured for receiving orders from market makers on and away from the trading floor. The system also includes executable instructions for allocating to designated primary market makers a portion of an incoming order remaining after first trading against public customer orders.

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Chicago, IL, United States of America

Anthony Montesano