Method and system for providing price protection for commodity purchasing through price protection contracts

A method for providing price protection for commodity purchasing, by providing a price protection system computer having a data store and a processor executing instructions for performing the method comprising:

• the following steps performed by the price protection system:
• obtaining, by the price protection system computer coupled to a network, data regarding desired price protection from each consumer in a plurality of consumers accessing an interface provided by the price protection system computer, wherein the data for each consumer includes information about past commodity consumption for that consumer, a time period for price protection, a locale and a desired level of price protection;
• analyzing, by the computer processor, the data for each consumer to predict future commodity consumption for that consumer within the locale and the time period included in the consumer data, wherein the analysis includes identifying the locale or time period in which the commodity is to be purchased and predicting a future commodity usage;
• obtaining, from a financial institution computer coupled to the price protection system computer, a price protection matrix comprising a set of price decks, wherein each price deck includes an associated locale, a time period, and a strike price corresponding to a lock price associated with the commodity, wherein at least one locale in the price protection matrix corresponds to the locale included in the consumer data;
• comparing, by the price protection system computer, the consumer data and the price protection matrix to determine one or more price protection contracts for each consumer, wherein for each consumer the price protection computer is further operable to perform the steps of:
• providing a price protection contract for the commodity to that consumer based on that consumer's time period, the at least one locale included in the consumer data and desired level of price protection;
• storing data associated with each price protection contract in the data store, wherein the data comprises an associated time period, a lock price associated with the locale included in the consumer data and information associated with an identification mechanism,
• communicating with a plurality of retail locations to obtain purchase information;
• wherein for each purchase information received by the price protection system computer, the price protection system computer is operable to perform the steps of:
• identifying the price protection contract associated with the identification mechanism;
• obtaining information associated with the purchase of the commodity from a retail location coupled to the network;
• determining, based on the information obtained from the retail location, a location of the purchase;
• comparing, by the computer processor, one or more price protection contract terms with the information associated with the purchase of the commodity,
• wherein if the purchase is determined to occur at a location within the locale included in the consumer data, the price protection system computer is operable to:
• bill the consumer based on the lock price stored in the data store;
• and
• bill the financial institution at least a portion of the amount of the purchase price of the commodity at the time of the purchase that is above the lock price,
• otherwise if the purchase is determined to occur at a location outside the locale included in the consumer data, the price protection system computer is operable to:
• bill the consumer the purchase price of the commodity.