Biddable financial instrument, online competitive bidding platform for trading thereof and associated system and method of trading thereof

A method for generating a biddable financial instrument for trading over a competitive bidding software platform, the competitive bidding software platform comprising a plurality of user personal computers each with at least a computer processor with a computer memory for executing a software in the computer memory by the computer processor, a computer display and interface connected to the computer processor, and a computer connection to a network, wherein the software in each of the computer processors is an investor software interface of a remote competitive bidding software platform and at least one network enabled server connected to the network with a server processor and a server memory for executing the competitive bidding software platform, wherein the competitive bidding software platform is connected to the investor software interfaces via the network for each of the plurality of personal computers, wherein the investor software interface includes a display of a list of positions including at least one opening position of current holdings held in a portfolio of the investor and the competitive bidding software platform to react differently to a desire by the investor to change the volume of a current position in the list of positions between two subsequent periods, the method includes the steps of:

• associating within a financial instrument contractual agreement a contractual bidder with a single issue of a financial instrument to be issued by an issuer;
• using a bank syndicate or an agent to offer the single issue to a plurality of initial investors on a primary market;
• placing the single issue owned by the initial investors on a biddable alternative trading system;
• and allowing any of the plurality of investors owning at least a portion of the single issue to trade their positions on the biddable alternative trading system to other investors or to a contractual bidder if no other investor is available to acquire the portion of the single issue.

A method of calculating a premium for a contractual bidder holding a position in a biddable financial instrument trading over a competitive bidding software platform comprising a plurality of user personal computers each with at least a computer processor with a computer memory for executing a software in the computer memory by the computer processor, a computer display and interface connected to the computer processor, and a computer connection to a network, wherein the software in each of the computer processors is an investor software interface of a remote competitive bidding software platform and at least one network enabled server connected to the network with a server processor and a server memory for executing the competitive bidding software platform, wherein the competitive bidding software platform is connected to the investor software interfaces via the network for each of the plurality of personal computers, wherein the investor software interface includes a display of a list of positions including at least one opening position of current holdings held in a portfolio of the investor and the competitive bidding software platform to react differently to a desire by the investor to change the volume of a current position in the list of positions between two subsequent periods, the method comprising the steps of:

• fixing contractually a yearly ceiling rate of an issue of a biddable financial instrument as part of a contractual agreement of the biddable financial instrument;
• calculating using a clearing rate module of the online trading platform a clearing rate for the issue of the biddable financial instrument for a period;
• and
• determining using the clearing rate module an all-sell-rate as the lower of a previous period clearing rate plus a fixed value in basis points or a fraction of the yearly ceiling rate in percentage;
• and removing from the all-sell-rate the current period clearing rate.

A method for the calculation of a periodic clearing rate of a single issue of biddable financial instrument trading on an biddable online trading platform comprising a plurality of user personal computers each with at least a computer processor with a computer memory for executing a software in the computer memory by the computer processor, a computer display and interface connected to the computer processor, and a computer connection to a network, wherein the software in each of the computer processors is an investor software interface of a remote competitive bidding software platform and at least one network enabled server connected to the network with a server processor and a server memory for executing the competitive bidding software platform, wherein the competitive bidding software platform is connected to the investor software interfaces via the network for each of the plurality of personal computers, wherein the investor software interface includes a display of a list of positions including at least one opening position of current holdings held in a portfolio of the investor and the competitive bidding software platform to react differently to a desire by the investor to change the volume of a current position in the list of positions between two subsequent periods, the method includes the steps of:

• allowing during a trade period at plurality of potential investors to enter sell, buy or roll orders on a single issue of a biddable financial instrument, wherein for each buy or roll order includes at least a volume of trade and a bid rate;
• and
• determining the highest bid rate entered for the trade period;
• adding all of the volumes entered for each buy and roll orders into a demand;
• entering a buy order for a total volume of the single issue at the highest bid rate entered on behalf of a contractual bidder;
• closing the trade period;
• comparing the demand with the volume of the single issue and in case the demand is inferior to the single issue volume awarding to the contractual bidder the difference between the singe issue volume and the demand and fixing the periodic clearing rate as the bid rate of the highest order entered as a buy or a roll;
• and comparing the demand with the volume of the single issue and in case the demand exceeds or equals the single issue volume, fixing the periodic clearing rate as the bid rate of the highest rate possible where the volume of the combined volumes of bids having lower bid rates is at least equal to the volume of the single issue.