Financial exchange system and method
OwnerNam Dinh Phaminventor
Life of this patent
Estimating the term…
Abstract
A system and method for administering an investment contract between at least two investors. Initially, the investment contract is associated with a first investor. The contract is based on at least one underlying commodity, however, the first investor does not hold the underlying commodity or agree to buy or sell the underlying commodity. The system matches the contract with a second investor thereby creating an active contract. The second investor does not hold the underlying commodity or agree to buy or sell the underlying commodity. The system temporarily holds the first and second investor funds associated with the contract, and pays off one of the first and second investor upon expiration of the contract. Contract expiration is based on either a deviation from a target price or a time horizon.
Claims40
A method of administering an investment contract between at least two investors comprising:
- associating a contract with a first investor, wherein the contract is based on at least one underlying commodity having a market value and wherein the first investor does not hold the underlying commodity or agree to buy or sell the underlying commodity,
- matching the contract with a second investor thereby creating an active contract, wherein the second investor does not hold the underlying commodity or agree to buy or sell the underlying commodity,
- at least temporarily holding first investor funds and second investor funds associated with the contract,
- determining which one of the first and second investor is to receive a payoff based on the market value of the underlying commodity upon expiration of the contract in relation to one of a target price and a target price range, and
- paying off one of the first and second investor upon expiration of the contract, wherein expiration of the contract is based on at least one of a deviation from a target price range and a specified maturity date.
A system for creating an electronic exchange for trading in and administering investment contracts between at least two investors comprising:
- a computer system operable to (i) associate a contract with a first investor, wherein the contract is based on at least one underlying commodity and wherein the first investor does not hold the underlying commodity or agree to buy or sell the underlying commodity, (ii) match the contract with a second investor thereby creating an active contract, wherein the second investor does not hold the underlying commodity or agree to buy or sell the underlying commodity, (iii) at least temporarily hold first investor funds and second investor funds associated with the contract, (iv) determine which one of the first and second investor is to receive a payoff based on the market value of the underlying commodity upon expiration of the contract in relation to one of a target price and a target price range, and (v) pay off one of the first and second investor upon expiration of the contract, wherein expiration of the contract is based on at least one of a deviation from a target price range and a time horizon.
Dependencies are inferred from the claim text.