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US 2003/0195822 A1Published application
Methods and systems for purchase of commodities
AssigneeNone recorded
InventorsJason G. Tatge, Daniel Scott Fritsch
Life of this patent
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AssigneeNone recorded
InventorsJason G. Tatge, Daniel Scott Fritsch
Estimating the term…
The invention is directed to methods and systems for commodities procurement with concomitant hedging. The invention enables automatic commodity purchase at a desired basis level when a seller's price matches a buyer's basis bid and concomitantly automatically placing an electronic commodities order to hedge the buyer's purchase.
An Internet based system for facilitating commercial transactions between producers of agricultural commodities and intermediaries who purchase agricultural commodities from the producers, comprising:
A system for facilitating commercial transactions, comprising:
A method of facilitating commercial transactions between a first class of participants and a second class of participants, utilizing a system having a centralized electronic information exchange, accessible to the first class of participants wherein information specifically pertaining to each of the second class of participants is available, and members of the second class of participants have limited access to the system to provide and update the information that specifically pertains to the members, comprising:
A system for facilitating commercial transactions between first parties and second parties, comprising:
A server based system for facilitating transactions between buyers of a commodity and sellers of a commodity, comprising:
A method for allowing a purchaser of a commodity to post information relating to bids to purchase commodities on a system and to have the system act on behalf of the purchaser in contracting with a seller of the commodity and in contracting with a futures commission merchant to obtain a futures contract, comprising:
Dependencies are inferred from the claim text.
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From the US filing history. Foreign family members aren’t listed.
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Finance; Insurance; Tax strategies; Processing of corporate or income taxes: trading; Exchange, e.g. stocks, commodities, derivatives or currency…
Discounts or incentives, e.g. coupons or rebates: incentive systems for frequent usage, e.g. frequent flyer miles programs or point systems
Buying, selling or leasing transactions: electronic shopping [e-shopping]
Managing shopping lists, e.g. compiling or processing purchase lists: replenishment orders; recurring orders
Term end not estimated
The invention is directed to methods and systems for purchasing commodities with concomitant hedging.
Today, the Internet hosts a multitude of sites and protocols whereby the sale of goods and commodities can be consummated. The majority of such sites and protocols are seller oriented where a seller advertises goods or commodities to a multitude of buyers to achieve an optimized selling price. The seller's goal is straightforward, i.e., once the goods are sold, the seller has achieved his objective.
Commodity buyers often hedge their purchases against the listed exchange rate for the same or a different commodity. For example, buyers of agricultural products often sell futures contracts at the exchange rate listed by the Chicago Board of Trade to hedge their purchases (i.e., take a short futures position). These “hedge purchasers” face a more complicated series of transactions than do sellers. Thus, it is not surprising that the seller-oriented platforms currently available on the Internet do not fully satisfy the hedge buyer's needs. First, the buyer must advertise a bid price to a plurality of sellers. Since the buyer will hedge his purchase, his bid price is based on the exchange rate listed for a particular hedge commodity (which may be the same commodity he is seeking to purchase). Since the hedge commodity's exchange rate is constantly fluctuating, the buyer must constantly adjust and post his current bid price. Furthermore, once the buyer buys, he should immediately complete the hedge transaction to avoid adverse price shifts of the hedge commodity.
These and other features, aspects, and advantages of the invention are better understood with regard to the following description, appended claims, and accompanying drawings where:
FIG. 1 is a flow chart of a preferred embodiment of the invention for purchase of a commodity with a concomitant hedge transaction;
FIG. 2a illustrates a preferred network for use in the invention;
FIG. 1 is a flow chart of a preferred embodiment of the invention. First, as indicated in Box 1, a buyer (or multiple buyers) provides bid data on the invention's network platform for a commodity desired to be purchased (“purchase commodity”) using the methods and systems of the invention. According to the invention, the commodity the buyer whishes to purchase can be any item or service (see definition section 5.2). It is not required for the purchase commodity to be listed on an exchange. Each buyer participating in the platform may desire to purchase the same or a different commodity. Bid data typically includes the bid price, quantity desired, and point of delivery and, optionally, other relevant data. Of course, relevant data will vary depending on the commodity. Examples of relevant data include, but are not limited to, quantity sought, quality, delivery date, and delivery place etc.
Typically, a buyer selects the listed commodity with which he will hedge his purchase (i.e., the hedge commodity) to calculate the bid price. The methods and systems of the invention can receive and process real-time exchange rate quotes for listed commodities. Using these real-time quotes, the methods and systems of the invention can automatically and continually calculates and update the bid price based on the hedge commodity's real time quote. For example, the invention can automatically and continually calculate and update the buyers' bid prices by subtracting the buyer's basis from the real-time exchange-rate quote for the hedge commodity. Alternatively, the buyers can calculate a bid separately from the software and enter it manually.
As illustrated in Box 2, the buyers enter information respecting a hedge transaction. Typically this includes the hedge commodity to be purchased or sold, the amount, the introducing broker or futures clearing merchant from which it can be purchased, and ID or account numbers required by the introducing broker or futures clearing merchant. Typically, the hedge transaction will be executed at the time that a seller agrees to sell a commodity on the terms specified by the buyers.