assured two-way wireless communication system for financial

United States Patent [19] Patterson, Jr. et al.

‘ ‘ 115005793301». ; ‘

5,793,301 Aug. 11, 1998

[11] Patent Number:

[451 Date of Patent:

[54]

[75]

[73]

[21]

[22]

[62] [51] [52]

[53]

[56]

ASSURED TWO-WAY WIRELESS COMMUNICATION SYSTEM FOR FINANCIAL INDUSTRY TRANSACTIONS

Inventors: L. Thomas Patterson, J r.. Chatham. N.J.; Desmond Sean O’Neill. Norwalk. Conn; Stephen Tyler Carroll. Chatham. NJ.

Paryrus Technology Corp.. New York. N.Y.

Assignee:

Appl. No.: 763,186

Filed: Dec. 10, 1996

Related US. Application Data

Division of Ser. No. 309,337, Sep. 20, 1994.

Int. Cl.‘5 . . . . . . . . . . . .. H04L 1/12; G08B 5/22

US. Cl. .............................. .. 340/825.26; 340/825.44;

340/3l1.l; 340/313; 340/825.27; 370/313; 364/709.11; 382/189; 455/526; 455/517;

455/575; 707/541 Field of Search ....................... .. 340/825.26. 825.44.

340/3111. 825.69. 825.72. 313, 825.27; 370/310. 313; 345/169. 173. 339; 364170911;

382/189; 455/526. 517. 575; 707/541

References Cited

U.S. PATENT DOCUMENTS

4/1971 Adams et al. .

6/1982 Levine ......................... .. IMO/825.44 X

10/1983 Braddock, [l1 . 9/1984 Claytor.

3,573,747 4,336,524 4,412,287 4,473,824

(List continued on next page.)

FOREIGN PATENT DOCUMENTS

388162.42 9/1990 European Pat. on.

Initial Send

388162A3 9/1990 European Pat. 01f. .

OTHER PUBLICATIONS

‘Technology Outruns Even the Runners On Wall Street: Electronic Trading to Replace Hand-Carried Messages on the Floor of Big Board.” by Dave Pettit —The Wall Street Journal. Aug. 19. 1994. "Frontlines: Hand-held Price Reporting System Launched ”-Wall Street &Technology. vol. 10. No. 4.. p. 14 no month no year.

“A Handheld Computer That’s Combat-Hardened" by Greg Bruns —Business Week. Apr. 18. 1994. pp. 94. 96. "Tossing Out Tickets” by Carrie R. Smith --Wall Street & Technology. vol. 11. No. 13. pp. 52-53. 55-56. 58. no month 1994.

(List continued on next page.)

Primary Examiner-Brian Zimmerman Assistant Examiner—William H. Wilson. Jr. Attorney, Agent, or Firm-—Darby & Darby

[57] ABSTRACT

A method for providing assured communications in a two way wireless communications system is disclosed. An instruction is constructed at a ?rst device for wireless transmission to a second device Where the instruction is received by the second device and ultimately seen by the user. The instruction is transmitted as an instruction signal. The second device alters the instruction signal and transmits it back in altered form to provide an indication that the instruction has been received by the second device. The user of the second device informs the operator of the ?rst device that the instruction has been seen by the user by transmitting a further altered version of the instruction signal to the ?rst device. The disclosed method assures the operator of the ?rst device that instructions are being received and acknowl edged in a timely manner.

13 Claims, 17 Drawing Sheets

Echo Send

5,793,301

US. PATENT DOCUMENTS 5,467,268 11/1995 Sisley et a]. .......................... .. 395/209 5,530,438 6/1996 Bickhametal. .. 340/82534

4,617,423 10/1986 Dickerson ct =11- - 5,559,878 9/1996 Keys et a1. ..... .. 379/265 4,674,044 6/1937 Kalmus 941' - 5,561 ,446 10/1996 Montljck . . . . . . . . . . . . .. 345/173

4,677,434 6/1987 P46991111"- 5,608,907 3/1997 Fehskens et a]. . 395/672 4,677,552 6/1987 $919819 - 5,615,121 3/1997 Babayev et a1. .. 395/209 4,700,295 l0/l987 Katsofet a1. ......................... .. 364/401 5,619,655 4/1997 Wang el a]_ u 395/670 4,734,858 3/1988 schla?y- 5,634,100 5/1997 Capps .................................... .. 395/209 4,740,788 4/1988 Kanneker ......................... .. 340/835.44 4,799,215 1/1989 Suzuki . UI'HER PUBLICATIONS 4,903,201 2/1990 Wagner. _ , 4,937,743 6/1990 Rassman et al. ..................... .. 395/208 “Report of The “6514611931 Task For“ 011 Mark“ Mecha 4,940,963 7/1990 Gutman et a]. .............. .. 340/82544 x nisms"—lan- 1988. Table of Contents and pp. 1. VI—4-VI-l4. 4,980,826 12/1990 Wagner . “Is the Pen Mightier Than The Phone?". by Jenna Michaels 5,003,473 3/1991 Richards . dated Sep. 1991. Wall Street Computer Review. 2 pgs. 218222;; gram; "THE SPECIALIST At the New York Stock Exchange:

2 1 35°C” ~ Auctioneer Catal stA ent Princi ”. 11 e hlet no 5,090,024 2/1992 Vander Meyetal. month 1994 y g Pal pag p ' 4 5,111,391 5/1992 Freltls a a1. .......................... .. 395/209 ..O?_Exchange Trading Chips Away A, NYSE volume], by 5,153,582 10/1992 Davls ............................... .. 340/82544 5,168,446 12/1992 wiman _ Ivy Schmerken. Wall Street 88 Technology. v01. 10, No. 4. 5,231,634 7/1993 Giles at 31' ‘ pp. 42-44. 46-48 no month 1992. 5,265,006 11/1993 Asthana et a1. ....................... .. 395/208 ‘WordPerfect Ol?ce Reference for IBM Personal Comput 5.270,919 12/1993 Blake e181. .......................... .. 3951208 ers and PC Networ ". Table of Contents and pp. 495-500. 5,270,922 12/1993 Higgins 9 513-515. 557-560 no month no year. 5,278,984 In 994 Batchelor .............................. .. 395/650 “LANS EXPLAINED AGuidc to Local Area Natworksj by 5,285,506 2/1994 Crooks et a1. ........................ .. 382/189 w_ Scott Cun-ie_ chaptcr 11_ pp_ 122_133 and Table of 5,295,154 3/1994 Meter et a]. . Contents no month no yen 5,297,031 311994 Gutterman et a1. . . Wall Street Letter. Jun. 20. 1994. p. 6. 5,297,032 3/1994 Trojan et a1. . 199 5,307,297 4/1994 Iguchi et a1. ...................... .. 345/169 x wall Street Len“ Mat- 1~ 3~ P- 7 5,309,437 5/1994 Pe?man e; 31 _ Wall Street Letter. Oct. 12. 1992. p. 7. 5,310,997 5/1994 Roach et a1. . Wall Street Letter. Aug. 17. 1992. p. 8. 5,311,423 5/1994 Clark ..................................... .. 364/401 “Amex to Test wuclcss Devices," by Margie Sernilof. 5525192 6/1994 Qockm 364/401 Communications Week, Mar. 29. 1993. pp. 19-20. 5’343’387 8/1994 H°n.ma et a1‘ 364/401 ‘Technology Update.” Newsletter for the American Stock 5,345,049 911994 B41116: 187/127 5,347,477 9/1994 Lee 364/70911 Exchange‘ Oct' _1993‘ 2 Pgs' _ 5,369,570 11/1994 Parad ...... .. 395/208 “1" the F100“ Plck a Cami Any Card?"- WATERS- Wmtcr 5,459,458 10/1995 Richardson et al 340/825.44 x 1993~ PP- 22- 24~ 25 110 month 5,459,837 10/1995 Caccavale ........................ .. 395/18401 “Exchanges,” Wall Street Letter. Jun. 20. 1994. pp. 2. 4.

US. Patent Aug. 11, 1998 Sheet 1 0f 17 5,793,301

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US. Patent Aug. 11,1998 Sheet 8 of 17 5,793,301

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5.793.301 1

ASSURED TWO-WAY WIRELESS COMMUNICATION SYSTEM FOR

FINANCIAL INDUSTRY TRANSACTIONS

This is a division. of application Ser. No. 08/309337. ?led Sep. 20. 1994. Allowed. Patent No. not assigned.

FIELD OF THE INVENTION

The present invention relates to computer-based tech niques for transferring orders. quotes. and memos from a remote location to a ?oor broker on the ?oor of a ?nancial exchange.

BACKGROUND OF THE INVENTION

At present. there exist several types of ?nancial markets in which securities. commodities. and other negotiable instruments are traded. Among known types of ?nancial markets is the auction market. the most prominent example being the New York Stock Exchange. In an auction market. buyers and sellers congregate on the exchange ?oor and announce their respective bid (price offered to buy) and ask (price acceptable to sell) prices. As a result of the continuous auction process. a trade in any particular security occurs at the highest price any buyer is willing to pay and at the lowest price any seller is willing to accept. Transaction costs are minimized by eliminating dealers who otherwise come between the buyer and seller as in other types of exchanges. for example. the over-the-counter exchange. The physical auction ?oor is divided into several rooms.

each of which has posts or columns around which trading panels are arranged. The trading panels are where particular securities are designated to be traded. Each security is traded at a certain trading panel. There are three principal players in the trading crowd on

the ?oor of an auction exchange: the specialist. the ?oor broker. and the ?oor trader. The specialist is situated at one of the trading panels and has several roles in the trading process including: auctioneer to call out the best bids and offers to brokers that request quotes during the trading session and to ensure that all trades are posted; catalyst to call a particular broker who has previously expressed a buying interest to the post in response to a selling interest at the post; agent to represent investors in trades that have limits imposed thereon. for example. a price ?oor. etc; and franchisor to provide capital when necessary to maintain liquidity when supply and demand are out of balance. See. ‘The Specialist At The New York Stock Exchange: Auctioneer. Catalyst. Agent. Principal." The Specialist Association (1994). The ?oor broker roams about the trading ?oor. and. as an agent. transacts orders on behalf of the buyers and sellers. Approximately ninety percent of the orders that the floor broker executes are obtained from a clerk who is situated on the perimeter of the exchange. The ?oor trader is like a ?oor broker. except the ?oor trader trades for his or her own account. For further information on the stock market and current automation thereof. see: “Stock Market.” The Report of The Presidential Task Force. part V1 pp. 4-14. January (1988). The clerk is not part of the trading crowd. but he or she

plays a role in investor transactions. The clerk receives orders and quote requests from investors and relays them to one of the ?oor brokers for handling. Once handled. the clerk reports the execution or quote to the investor. Alternatively. the order can be electronically routed to the trading post for matching and reporting. As used in this speci?cation. an investor is an order originator which may

15

20

25

30

35

50

55

65

2 include institutions such as banks and pension funds. other broker/dealers. trading desks (institutional. retail. arbitrage. etc.). public customers (including individuals). and the like. A typical transaction originates when an order is placed

with an off-the-?oor trading desk to buy or sell a particular security. The trading desk may either convey the order to a clerk (electronically or by telephone). or electronically to the specialist at the trading post. The clerk is known as the “order” or “booth clerk” The booth clerk notes the param eters of the order. for example. the side of the transaction (buy or sell). the symbol of the security (e.g.. IBM. GM. etc.). the quantity (e.g.. 9.000 shares). the price (market or limit). any special conditions (e.g.. all or none. ?ll or kill. good ’till canceled. on opening. etc.). and the time that the order is placed. Because the market in any one security ?uctuates with each trade and is in?uenced by the activity in other securities. an important aspect of the clerk‘s function is to ensure that the order is delivered to the broker so that it is executed in a timely fashion. An executed order is one that is ?lled or partially ?lled. that is. the security is bought or sold according to the parameters of the order. The investor may also request that the trading desk obtain

a quote from the ?oor of the exchange to get the “feel" of what is happening in the market of a particular security. Unlike an o?icial quote provided by the quotation services such as ADP and Quotron. which includes the best bid and ask prices. the market size at the best prices. and perhaps opening and closing prices on the day for the stock as well as the last trade. this quote provides more insight or “?avor” into the market. By way of illustration. and not exhaustive of the possible varieties of “?avor quotes" obtainable. the “?avor quote” or “market look” may indicate: (1) who were the recent buyers and sellers of the security and the size and price of those trades; (2) the market depth (the extent of market interest) and who are the players at the current market and at di?’ering price levels. as obtained from the trading crowd and perhaps the specialist’s book; (3) the learned opinion and interpretation of the market from the ?oor brokers themselves; and (4) the possible trading inter est of people not currently in the trading crowd. based on prior history. previous days. etc. The trading crowd. which includes the specialist who makes the market in that security and the other ?oor brokers and ?oor traders that may be working that post. provides a view of the market not obtainable from an official quote. Using the information obtained from the trading crowd and the floor broker’s experience and understanding. the investor is able to discern the real story of the market in a particular security so that he or she can make an educated decision as to what position to take in a security.

In this speci?cation. quote requests and orders are gen erally referred to as instructions whereas the quotes and executions are generally referred to as responses to the instructions. but are transmitted as instructions.

The floor broker executes orders and obtains quotes according to instructions from the booth clerk. The ?oor broker is typically stationed at one of several trading panels. It is not uncommon for a floor broker to specialize in a few select securities. The specialized ?oor broker can therefore generally be located on the crowded trading ?oor in the vicinity of a certain trading panel; however. the ?oor broker is only e?’ective in his or her function if he or she is free to move ?'om panel to panel. and to different posts.

Traditionally. the booth clerk transcribes the instructions onto either an order slip or a quote request form. depending on the nature of the instruction. The booth clerk decides

assured two-way wireless communication system for financial

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