US 7,742,979 B2Granted

System and method for automated commodities transactions including an automatic hedging function

AssigneeFarms Technology, LLC

InventorsGary Reding, Kent Beadle, Chris Nikkel, Mark Schulze, Walker Humphries, Dave Womeldorf, David Clark, Scott Cerreta, Carl Ozkaynak, Julia A. Granada Rodriguez

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Abstract

An integrated virtual market is provided that facilitates communication between the producers of a given commodity and the parties wishing to purchase such commodities. This system provides real-time updated information about local pricing being offered by those purchasers. In addition, those producers can post offers that can automatically be accepted by purchasers and have contracts automatically generated. An important consideration from a purchaser's prospective is minimizing the risk associated with making such transactions. Due to this, futures contracts are often obtained. The virtual market system of the present inventions automatically requests and obtains futures contracts to hedge the contracts being generated.

Claims38

Dependent claims

A method for executing a commodities transaction on a net market system, said method comprising:

(a) receiving on the net market system an offer from a seller to sell a commodity, the offer including an available quantity and an asking price for the commodity;
(b) receiving on the net market system a plurality of bids from a respective plurality of buyers to buy the commodity, each bid including for each buyer a buyer-specific basis and a desired quantity for the commodity;
(c) receiving on the net market system an updated exchange price for the commodity from a commodities exchange;
(d) modifying, by the net market system, each bid in the plurality of bids to include a buyer-specific flat price, wherein the net market system is preprogrammed to automatically calculate the buyer-specific flat price by adding the buyer-specific basis for said each bid to the updated exchange price;
(e) storing, by the net market system, the offer, the plurality of bids and the updated exchange price in a database associated with the net market system;
(f) comparing, by the net market system, the buyer-specific flat price in a bid received from a particular buyer to the asking price received from the seller;
(g) determining, by the net market system, that the buyer-specific flat price in the bid for the particular buyer is not less than the asking price for the seller, and sending, by the net market system, an electronic request on behalf of the particular buyer to sell, through the commodities exchange, a futures contract for the commodity at the updated exchange price;
and
(h) after the futures contract is sold, sending, by the net market system, a communication to the seller indicating that the offer is accepted;
(i) wherein the net market system is preprogrammed to carry out the above steps (c) through (h) automatically without intervention from the seller or the particular buyer.

7 more elements

A computer system for executing a commodities transaction, comprising:

(a) a server;
(b) a database associated with the server;
and
(c) an application program running on the server;
(d) wherein the application program is operable with the server to:
i) receive from a seller client terminal an offer from a seller to sell a commodity, the offer including an available quantity and an asking price for the commodity;
ii) receive from a plurality of buyer client terminals a respective plurality of bids from a respective plurality of buyers to buy the commodity, each bid including for each buyer a buyer-specific basis and a desired quantity for the commodity;
iii) receive from a commodities exchange an updated exchange price for the commodity;
iv) modify each bid in the plurality of bids to include a buyer-specific flat price, wherein the buyer-specific flat price is calculated by adding the buyer-specific basis for said each bid to the updated exchange price;
v) store the offer, the plurality of bids and the updated exchange price in a database associated with the net market system;
vi) determine that the buyer-specific flat price in a bid for a particular buyer is not less than the asking price for the seller, and send an electronic request on behalf of the particular buyer to sell, through the commodities exchange, a futures contract for the commodity at the updated exchange price;
vii) after the futures contract is sold, send a communication to the seller client terminal indicating the offer is accepted;
and
viii) perform steps (iii) through (vii) automatically without intervention from the seller or the particular buyer.

11 more elements

A method for executing a commodities transaction on a net market system, said method comprising:

(a) receiving on the net market system bid information from a plurality of buyers, the bid information including for each buyer in the plurality of buyers a desired commodity, a desired quantity and a buyer-specific basis for the desired commodity;
(b) repetitively receiving on the net market system, from a commodities exchange, an updated exchange price for the desired commodity, and calculating by the net market system, for each buyer in the plurality of buyers, a buyer-specific flat price for the desired commodity based on the buyer-specific basis for said each buyer and said updated exchange price;
(c) storing the bid information on the net market system;
(d) generating on the net market system a web page for a particular buyer in the plurality of buyers, the web page being configured to present to a seller the desired commodity, the desired quantity and the buyer-specific flat price for said particular buyer and to receive from the seller an offer to sell an available quantity of the desired commodity to the particular buyer for an asking price;
(e) transmitting the web page, by the net market system, to a seller client terminal controlled by the seller;
(f) receiving, by the net market system, the offer from the seller client terminal, wherein said offer is entered by the seller via the web page;
(g) determining, by the net market system, that the buyer-specific flat price for said particular buyer is not less than the asking price, and generating, by the net market system, a request to sell a futures contract for the desired commodity through the commodities exchange on behalf of said particular buyer;
and
(h) after the futures contract is sold, electronically transmitting to the seller client terminal, by the net market system, a communication indicating that the offer is accepted;
(i) wherein steps (b) through (h) are carried out automatically by the net market system without intervention from said particular buyer.

7 more elements

A method for executing a commodities transaction on a net market system, comprising:

receiving on the net market system from a seller client terminal an offer from a seller to sell a commodity, the offer including an available quantity and an asking price for the commodity;
receiving on the net market system from a plurality of buyer client terminals a respective plurality of bids from a respective plurality of buyers to buy the commodity, each bid including for each buyer a buyer-specific basis and a desired quantity for the commodity;
and
until (1) the net market system receives a request from the seller client terminal indicating the offer is canceled, or (2) the net market system sends a communication to the seller client terminal indicating that the offer is accepted, iteratively performing the following steps (a) through (e) on the net market system without intervention from the seller:
(a) receiving on the net market system, from a commodities exchange, an updated exchange price for the commodity;
(b) modifying, by the net market system, each bid in the plurality of bids to include a buyer-specific flat price, wherein the buyer-specific flat price is calculated by the net market system by adding the buyer-specific basis for said each bid to the updated exchange price;
(c) storing, by the net market system, the offer, the plurality of bids and the updated exchange price in a database associated with the net market system;
(d) determining, by the net market system, that the buyer-specific flat price in a bid for a particular buyer is not less than the asking price for the seller, and sending, by the net market system, a request on behalf of the particular buyer to sell, through the commodities exchange, a futures contract for the commodity at the updated exchange price;
and
(e) after the futures contract is sold, sending, by the net market system, a communication to the seller client terminal indicating that the offer is accepted.

7 more elements

A method for executing a commodities transaction on a net market system, comprising:

receiving on the net market system a bid from a buyer to buy a commodity, the bid including a buyer-specific basis and a desired quantity for the commodity;
and
performing, by the net market system, the following steps (a) through (f) without intervention from the buyer:
(a) receiving, by the net market system, from a commodities exchange, an updated exchange price for the commodity,
(b) modifying the bid, by the net market system, to include in the bid a buyer-specific flat price, wherein the buyer-specific flat price is calculated by the net market system by adding the buyer-specific basis to the updated exchange price,
(c) receiving, by the net market system, from a plurality of seller client terminals, a plurality of offers from a plurality of sellers to sell the commodity, each offer including an available quantity and an asking price for the commodity,
(d) storing, by the net market system, the bid, the plurality of offers and the updated exchange price in a database associated with the net market system,
(e) determining, by the net market system, that the asking price in a particular offer for a particular seller is not greater than the buyer-specific flat price in the bid for the buyer, and sending, by the net market system, a request on behalf of the buyer to sell, through the commodities exchange, a futures contract for the commodity at the updated exchange price, and
(f) automatically accepting, by the net market system, the particular offer after the futures contract is sold.

6 more elements

A computer system for executing a commodities transaction, comprising:

a server;
a database associated with the server;
and
an application program running on the server;
wherein the application program is operable with the server to
(a) receive from a buyer client terminal a bid from a buyer to buy a commodity, the bid including a buyer-specific basis and a desired quantity for the commodity, and
(b) while the bid is not canceled by the buyer and no contract is generated based on the bid, iteratively perform (i) through (vi) without intervention from the buyer:
i) receive from a commodities exchange an updated exchange price for the commodity,
ii) modify the bid to include a buyer-specific flat price, wherein the buyer-specific flat price is calculated by adding the buyer-specific basis to the updated exchange price;
iii) receive from a seller client terminal an offer from a seller to sell the commodity, the offer including an available quantity and an asking price for the commodity,
iv) store the bid, the offer and the updated exchange price in a database associated with the net market system,
v) determine that the asking price in the offer for the seller is not greater than the buyer-specific flat price in the bid for the buyer, and attempt on behalf of the buyer to sell, through the commodities exchange, a futures contract for the commodity at the updated exchange price, and
vi) after the attempt to sell the futures contract succeeds, generate a contract between the buyer and the seller, whereby the buyer is obligated to buy the available quantity of the commodity from the seller for the asking price.

10 more elements

Dependencies are inferred from the claim text.

Facts

Application: 12/134,833Filed 6 Jun 2008 · continuation
Priority: 18 Oct 2000
Published: US 2008/0301034 A14 Dec 2008
Granted: 22 Jun 2010
Term ends: Not estimatedThe source records don’t support an estimate.

Classification4 codes

G06Q 40/04
Finance; Insurance; Tax strategies; Processing of corporate or income taxes: trading; Exchange, e.g. stocks, commodities, derivatives or currency…
G06Q 30/0601
Buying, selling or leasing transactions: electronic shopping [e-shopping]
G06Q 40/06
Finance; Insurance; Tax strategies; Processing of corporate or income taxes: asset management; Financial planning or analysis
G06Q
Information and communication technology [ict] specially adapted for administrative, commercial, financial, managerial

Family

Application60/241,543Us provisional application · filed 18 Oct 2000
Application09/835,088Parent of this continuation · filed 13 Apr 2001
Application10/870,112Parent of this continuation · filed 17 Jun 2004
US 2008/0301034 A1Pre-grant publication · published 4 Dec 2008
US 7,418,423 B2Parent of this continuation
US 2002/0046127 A1Published application
US 2004/0230520 A1Published application
US 7,742,979 B2This patent

From the US filing history. Foreign family members aren’t listed.