The broker finds mutually agreeable stock swap terms for a buyer and seller by matching the seller’s request or “ask” with the potential buyer’s offer.  In the operation that is portrayed in the demonstration, the players all provide encrypted lists of acceptable offers to the broker. In addition, any of the parties is free to include one or more “asks” on the list. The broker will then try to match each “ask” from one party with another party’s “offer”.

In the demo, Party A is the only party with an “ask”. This request is formulated as part of the preparation for the stock swap exchange. The “ask” looks like this in clear text:

Written out in longer form, this request says that the buyer has Disney stock (DIS) that it would like to swap for a cash equivalent number of IBM shares for a period of 12 months. The buyer offers to make the swap for no additional cost (other than the broker’s fee). More realistically, the buyer is willing pay the seller $3.41 per share to compensate the seller for the swap. The seller never sees this range of “cash per share”. Instead, the broker negotiates a mutually acceptable number using encrypted data.

ask:

    have: DIS

    want: IBM

    shares: 10000

    cash_per_share: [    0.0000,     3.4100]

    interval: 12

    ref_id: 12345

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