Cboe Global Markets has patented a system and method for managing message latency in an exchange system to address technical advantages of certain market participants. The method involves identifying order types susceptible to advantages, applying latency during specific trading times, and reducing speed advantages to allow market makers to adjust quotes. GlobalData’s report on Cboe Global Markets gives a 360-degree view of the company including its patenting strategy. Buy the report here.
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According to GlobalData’s company profile on Cboe Global Markets, was a key innovation area identified from patents. Cboe Global Markets's grant share as of May 2024 was 16%. Grant share is based on the ratio of number of grants to total number of patents.
Managing latency of messages in an exchange system
A recently granted patent (Publication Number: US11995719B1) discloses a computer-implemented method for adjusting messaging latency in an electronic exchange system. The method involves receiving electronic order messages from market participants, identifying the order type associated with the message, and applying a latency duration to Trade at Settlement (TAS) orders to reduce the technical computing speed advantage of market participants over market makers. This adjustment allows market makers time to adjust TAS quotes by delaying subsequent TAS orders until a settlement time is reached.
The patent also describes an electronic exchange system designed to manage message latency from market participants. The system includes a communication interface, a processor, and memory with processor-executable instructions. The processor identifies order types, determines TAS order latency timing, retrieves parameters for calculating latency duration, and applies the latency to TAS orders. By reducing the speed advantage of market participants, particularly over market makers who have entered TAS quotes, the system aims to create a fairer trading environment by allowing market makers time to adjust their quotes. The system can adjust latency duration and start time based on market participant identifiers, ensuring flexibility in managing message latency effectively.
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