# US 2013/0159158 A1 · System and method for providing latency protection for trading orders

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- Number: US 2013/0159158 A1
- Document ID: US20130159158A1
- Status: Published application
- Kind: A1
- Application number: 13/620,804
- Filed: 2012-09-15
- Published: 2013-06-20
- Earliest claimed: 2007-01-16
- Assignees: BGC Partners, Inc.
- Inventors: Peter Bartko; John Robert Capuano; Joseph C. Noviello; Brian Alexander Weston
- Web page: https://patentgrep.com/patent/US20130159158A1

## CPC

- G06Q 40/04: Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
- G06Q 40/00: Finance; Insurance; Tax strategies; Processing of corporate or income taxes
- G06Q 40/06: Asset management; Financial planning or analysis
- G06Q: INFORMATION AND COMMUNICATION TECHNOLOGY [ICT] SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES; SYSTEMS OR METHODS SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES, NOT OTHERWISE PROVIDED FOR

## Abstract

A system for managing trading orders comprises a memory operable to store an order associated with a first price. The system further comprises a processor communicatively coupled to the memory and operable to identify a latency value. The processor is further operable to receive a counterorder and to identify a potential trade associated with the order and the counterorder, the potential trade based at least in part on the first price. If the latency value satisfies a configurable condition, the processor is further operable to initiate a configurable period of time. If the potential trade is not valid upon expiration of the configurable period, the processor is further operable to prevent the execution of the potential trade.

## Claims

### Claim 1

A system for managing trading orders, comprising:
a memory operable to store an order associated with a first price;
a processor communicatively coupled to the memory and operable to:
identify a latency value;
receive a counterorder;
identify a potential trade associated with the order and the counterorder, the potential trade based at least in part on the first price;
if the latency value satisfies a configurable condition, initiate a configurable period of time; and
if the potential trade is not valid upon expiration of the configurable period, prevent the execution of the potential trade.

### Claim 2 (depends on 1)

The system of claim 1, further comprising a server communicatively coupled to the processor, the server operable to determine the latency value.

### Claim 3 (depends on 2)

The system of claim 2, wherein determining the latency value comprises:
submitting a test order to a trading platform at a first time;
receiving, at a second time, an acceptance message associated with the test order; and
calculating the latency value based at least in part on the first time and the second time.

### Claim 4 (depends on 3)

The system of claim 3, wherein the test order is associated with an artificial trading product such that the trading platform prevents execution of the test order.

### Claim 5 (depends on 1)

The system of claim 1, wherein:
the counterorder is associated with a second price that matches the first price; and
the identification of the potential trade is based at least in part on the second price matching the first price.

### Claim 6 (depends on 1)

The system of claim 1, wherein, upon expiration of the configurable period, the processor is further operable to determine whether the potential trade is valid.

### Claim 7 (depends on 6)

The system of claim 6, wherein:
the processor is further operable to receive, prior to expiration of the configurable period, a command to cancel the order; and
the potential trade is determined to be invalid based at least in part on the received cancel command.

### Claim 8 (depends on 6)

The system of claim 6, wherein:
the processor is further operable to receive, prior to expiration of the configurable period, a command to adjust the first price associated with the order; and
the potential trade is determined to be invalid based at least in part on the received adjust command.

### Claim 9 (depends on 1)

The system of claim 1, wherein the configurable period is based at least in part on the latency value.

### Claim 10 (depends on 1)

The system of claim 1, wherein preventing the execution of the potential trade comprises deleting the order.

### Claim 11 (depends on 1)

The system of claim 1, wherein, if the potential trade is valid upon expiration of the configurable period, the processor is further operable to execute the potential trade.

### Claim 12 (depends on 11)

The system of claim 11, wherein the potential trade is valid if the order matches the counterorder upon expiration of the configurable period

### Claim 13 (depends on 1)

The system of claim 1, wherein the configurable condition is satisfied if the latency value satisfies a configurable threshold.

### Claim 14 (depends on 1)

The system of claim 1, wherein the configurable condition is based at least in part on price volatility associated with a trading platform.

### Claim 15 (depends on 1)

The system of claim 1, wherein:
initiating a configurable period of time comprises storing in a timer queue an entry associated with the identified potential trade; and
the timer queue is associated with a callback function to determine whether the order matches the counterorder upon expiration of the configurable period.

### Claim 16

A method comprising:
determining, by at least one processor, a latency value;
receiving, by the at least one processor, an order associated with a first price;
receiving, by the at least one processor, a counterorder;
identifying, by the at least one processor, a potential trade associated with the order and the counterorder, the
potential trade based at least in part on the first price;
determining, by the at least one processor, whether the determined latency value satisfies a configurable condition, in which the act of determining whether the latency value satisfies the configurable condition comprises determining that the latency value satisfies the configurable condition;
based on the act of determining that the determined latency value satisfies the configurable condition, initiating, by the at least one processor, a configurable period of time; and
determining whether the potential trade is valid upon expiration of the configurable period of time, in which the act of determining whether the potential trade is valid upon expiration of the configurable period comprises determining that the potential trade is not valid upon expiration of the configurable period;
based on the act of determining that the potential trade is not valid upon expiration of the configurable period, causing, by the at least one processor, the potential trade to not be executed.

### Claim 17 (depends on 16)

The method of claim 16, wherein determining the latency value comprises:
submitting a test order to a trading platform at a first time;
receiving, at a second time, an acceptance message associated with the test order; and
calculating the latency value based at least in part on the first time and the second time.

### Claim 18 (depends on 17)

The method of claim 17, wherein the test order is associated with an artificial trading product such that the trading platform prevents execution of the test order.

### Claim 19 (depends on 16)

The method of claim 16, wherein:
the counterorder is associated with a second price that matches the first price; and
the identification of the potential trade is based at least in part on the second price matching the first price.

### Claim at position 20

20-29. (canceled)