US 2015/0073967 A1 - Transmission Latency Leveling Apparatuses, Methods And Systems - The Lens

Transmission Latency Leveling Apparatuses, Methods And Systems

Published: Mar 12, 2015
Earliest Priority: Sep 12 2012
Family: 22
Cited Works: 0
Cited by: 28
Cites: 14
Additional Info: Full text

Abstract

Embodiments of the transmission latency leveling apparatuses, methods and systems provide an electronic bidding order management infrastructure, such as a “point-of-presence,” which receives and routes electronic trading orders from different trading entities at a server via a transmission medium to create a certain amount of transmission latency before the trading orders could arrive at and be executed at electronic exchanges to reduce latency arbitrage and/or order book arbitrage that may be experienced by high frequency trading participants. A similar transmission latency may be applied to the egress transmission of market data updates issued by an electronic exchange. Other techniques for facilitating electronic trading are also disclosed.

Claims

A computer-implemented method for transmission latency leveling in an electronic trading environment, the method comprising:
coupling a point-of-presence (POP) device to a first market center, such that electronic trading orders to be executed by the first market center are transmitted through said POP device before being received by the first market center, said POP device comprising at least one communication interface;

receiving, at said POP device, an electronic trading order to be executed by the first market center;

imposing, by said POP device, an additional latency on a transmission of said electronic trading order to the first market center, such that, prior to the first market center receiving or executing said electronic trading order, the first market center has sufficient time to process a market data update which has been generated at a second market center prior to the first market center's receipt of said electronic trading order; and

transmitting, by said POP device and after the imposing of said additional latency, said electronic trading order to the first market center for execution.
The computer-implemented method of claim 1, wherein said POP device is part of a computer system of the first market center.
The computer-implemented method of claim 1, wherein said POP device is separate from a computer system of the first market center.
The computer-implemented method of claim 1, wherein said POP device is operated or controlled by an entity that operates or controls the first market center.
The computer-implemented method of claim 1, wherein said POP device is operated or controlled by a first entity different from a second entity that operates or controls the first market center.
The computer-implemented method of claim 1, wherein said additional latency of such an amount that, prior to the first market center receiving or executing said electronic trading order, the first market center has sufficient time to process a market data update which has been generated at said second market center prior to an issuance of said electronic trading order by a market participant.
The computer-implemented method of claim 1, wherein said additional latency is of a predetermined, fixed amount.
The computer-implemented method of claim 1, wherein said additional latency is of a variable amount adjustable by said POP device.
The computer-implemented method of claim 1, wherein said additional latency is imposed by routing said electronic trading order through a transmission medium associated with said POP device.
The computer-implemented method of claim 9, wherein said transmission medium comprises a physical cable of dimensions chosen to achieve a desired amount of said additional latency.
The computer-implemented method of claim 10, wherein said physical cable is a coiled fiber-optic cable of a selected length.
The computer-implemented method of claim 9, wherein said transmission medium is a physical medium, the method further comprising:
modifying at least one dimension or characteristic of said physical medium to achieve a desired magnitude for said additional latency.
The computer-implemented method of claim 9, wherein said transmission medium comprises a wireless or microwave channel.
The computer-implemented method of claim 13, further comprising:
adjusting at least one communication parameter of said wireless or microwave channel to achieve a desired magnitude for said additional latency.
The computer-implemented method of claim 1, further comprising:
generating a record of the transmission of said electronic trading order by said POP device.
The computer-implemented method of claim 1, wherein the first market center is selected from a group consisting of:
a trading exchange for securities, currencies, or other financial instruments;

a dark pool for trading securities, currencies, or other financial instruments;

an alternative trading system;

an Electronic Communication Network (ECN);

a matching engine;

an advertising exchange;

an electronic market;

an auction-based online shopping system;

a ticket or hotel booking system;

a multiplayer online gaming system; and

a virtual in-game market.
A computer-implemented method for transmission latency leveling in an electronic trading environment, the method comprising:
coupling a point-of-presence (POP) device to a first market center, such that market data updates issued by the first market center are transmitted through said POP device before being disseminated to recipients, said POP device comprising at least one computer processor and at least one communication interface;

receiving, at said POP device, a market data update issued by the first market center, said market data update resulting from a first electronic trading order received or executed at the first market center;

imposing, by the POP device, an additional latency on an egress transmission of said market data update such that, prior to disseminating said market data update, a second electronic trading order related to said first electronic trading order has a sufficient head-start to be routed from the first market center or from a broker to a second market center for execution so that a third electronic trading order generated in response to said disseminated market data update cannot reach said second market center ahead of said second electronic trading order; and

forwarding, by the POP device and after the imposing of said additional latency, said market data update for dissemination to one or more recipients.
The computer-implemented method of claim 17, wherein said market data update comprises a trade report for a counterparty in an execution of said first electronic trading order.
The computer-implemented method of claim 17, wherein said market data update is part of a proprietary feed of an order book update that results from said receipt or execution of said first electronic trading order at the first market center.
The computer-implemented method of claim 17, wherein said market data update is part of a public feed of an order book update that results from said receipt or execution of said first electronic trading order at the first market center.
The computer-implemented method of claim 17, wherein said POP device is part of a computer system of the first market center.
The computer-implemented method of claim 17, wherein said POP device is separate from a computer system of the first market center.
The computer-implemented method of claim 17, wherein said POP device is operated or controlled by an entity that operates or controls the first market center.
The computer-implemented method of claim 17, wherein said POP device is operated or controlled by a first entity different from a second entity that operates or controls the first market center.
The computer-implemented method of claim 17, wherein said additional latency is of a predetermined, fixed amount.
The computer-implemented method of claim 17, wherein said additional latency is of a variable amount adjustable by said POP device.
The computer-implemented method of claim 17, wherein said additional latency is imposed by routing said market data update through a transmission medium associated with said POP device.
The computer-implemented method of claim 17, wherein the first market center is selected from a group consisting of:
a trading exchange for securities, currencies, or other financial instruments;

a dark pool for trading securities, currencies, or other financial instruments;

an alternative trading system;

an Electronic Communication Network (ECN);

a matching engine;

an advertising exchange;

an electronic market;

an auction-based online shopping system;

a ticket or hotel booking system;

a multiplayer online gaming system; and

a virtual in-game market.
A computer-implemented apparatus comprising:
at least one computer processor and at least one communication interface that are configured to:
couple with a first market center, such that electronic trading orders to be executed by the first market center are transmitted through said computer-implemented apparatus before being received by the first market center;

receive an electronic trading order to be executed by the first market center;

impose an additional latency on a transmission of said electronic trading order to the first market center, such that, prior to the first market center receiving or executing said electronic trading order, the first market center has sufficient time to process a market data update which has been generated at a second market center prior to the first market center's receipt of said electronic trading order; and

transmit, after the imposing of said additional latency, said electronic trading order to the first market center for execution.
A computer-implemented apparatus comprising:
at least one computer processor and at least one communication interface that are configured to:
couple with a first market center, such that market data updates issued by the first market center are transmitted through said computer-implemented apparatus before being disseminated to recipients;

receive a market data update issued by the first market center, said market data update resulting from a first electronic trading order received or executed at the first market center;

impose an additional latency on an egress transmission of said market data update such that, prior to disseminating said market data update, a second electronic trading order related to said first electronic trading order has a sufficient head-start to be routed from the first market center or from a broker to a second market center for execution so that a third electronic trading order generated in response to said disseminated market data update cannot reach said second market center ahead of said second electronic trading order; and

forward, after the imposing of said additional latency, said market data update for dissemination to one or more recipients.