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The BarterSecurities patent pending system introduces simple
two-sided order entry to the online trading
marketplace, along with real-time trade matching of two-sided orders.
Traders enter buy and sell orders simultaneously (in combination, a barter
order) such that the execution of each leg is contingent on the other.
Orders may have Market or Limit status, and limits
may be expressed in terms of either per-share prices or overall dollar
debits/credits.
Ex: Buy 1000 shs MSFT
Sell 2000 shs INTC
Receive at least $1,000.
Alternatively, traders can trade directly from a Limit
Order Book for their orders. In this case the customer enters just
symbols and quantities, without identifying limit prices and without
specifying market or limit status. The Limit Order Book is populated
automatically by marketmaker responses, virtual responses generated by permutations of pending
limit orders, and National prices.
BarterSecurities customers gains numerous advantages
by delivering barter orders. Because the risk/return characteristics of
barter orders are more favorable than traditional orders, marketmakers are
willing to respond more aggressively to them. Therefore, customers
experience tighter bid/offer spreads. At the same time customers sustain no
execution risk. That is, they eliminate the impact of market movement
between the times that the offsetting buy and sell legs are executed.
Customers who use the BarterSecurities Limit Order Book eliminate adverse
selection because they can locate the markets bid/offer prices for their
order without divulging their own limit prices. They can trade from the
Limit Order Book with one click, often with instantaneous trade
confirmation.
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