An electronic
system for aggregated pricing of linked multi-leg (e.g., equity / option and option / option) asset packages with an additional link to an automated broker
system for trading the linked asset packages are disclosed. The invention provides methodology and apparatus to electronically produce aggregated price quotes for packages of instruments designed to represent traditional trading strategies involving cash and their derivatives (e.g., stock and equity options). The
system develops packages according to specified strategies, and prices the packages based on the national best bid and offer (NBBO) or direct input from participating market makers and investors. The packages are designed for easy understanding by traditional investors and designed for trading through a single order. These packages are desirable over separately trading the asset and its derivative (e.g., equity and option) instruments because they transfer market volatility risk from the investor to the institution by requiring market makers to agree to the aggregated price of the
package prior to executing any trades. Certain linked packages, such as most stocks and options, cannot be traded together on a single floor of an exchange due to restrictions by the Securities and Exchange Commission (SEC) regarding side-by-side trading and integrated market making of most stocks and options. This invention provides an
electronic process for synthetic side-by-side trading across separate trading locations (e.g., equity and option exchanges and within the existing rules of the SEC). The
electronic process follows traditional rules regarding the
manual handling of combination orders involving multiple asset types. The process significantly improves efficiency over
manual handling resulting in a system that is scalable to high trade volumes.