Counterparty credit in electronic trading systems

In a computerized trading system comprising an accounts store, an order store, a credit store and an order matching engine, a method of matching orders for financial instruments, submitted on behalf of trading parties, comprising:

• receiving and storing, in the accounts store, details of multiple trading accounts relating to at least some of the parties, the multiple trading accounts for each party defining respective multiple trading preferences for the party and being defined at multiple levels of a tree of trading accounts;
• receiving and storing, in the credit store, a plurality of credit parameters for each of the multiple trading accounts defining limits of credit for the trading account to determine the credit worthiness of trades between a party and other parties;
• receiving and storing, in the order store, a plurality of orders submitted on behalf of the parties for said financial instruments;
• in the order matching engine, generating trades by matching orders contained in the order store subject to the limits of credit, automatically chaining together orders to generate a multi-legged chain of simultaneous trades, without instruction to do so from any of the parties;
• and
• in the order matching engine, fully authorizing the chain, fully rejecting the chain or partially authorizing the chain by scaling down all the orders in the chain by an appropriate factor determined by the credit parameters.

A method of electronically trading instruments between parties, in a computerized trading system, comprising an accounts store, an order matching engine and a trade mechanism, the method comprising:

• the accounts store receiving and storing data defining multiple trading accounts for at least some of the parties, the multiple trading accounts defining respective multiple trading preferences for each party and being defined at multiple levels of a tree of trading accounts;
• the order matching engine receiving and matching orders submitted by the parties to form trades by automatically chaining together said orders, without instruction to do so from any of the parties, to generate a multi-legged chain of simultaneous trades;
• and
• the trading mechanism automatically selecting, for at least some of the trades any of the trading accounts of said multiple trading accounts for the trading parties;
• and
• post-processing at the trade mechanism, the trade using the selected trading accounts.