System and method for trading based on tournament-style events

• US 10,586,282 B2
• Filed: 04/18/2006
• Issued: 03/10/2020
• Est. Priority Date: 03/25/1996
• Status: Expired due to Fees

• Current Assignee: CFPH LLC (Cantor Fitzgerald, L.P.)
• Original Assignee: CFPH LLC (Cantor Fitzgerald, L.P.)
• Inventors: Costakis, Alexander M., Lefkowitz, James J.
• Primary Examiner(s): Anderson, Mike
• Application Number:
  US11/379,171
• Publication Number:
  US 20060173764A1
• Time in Patent Office: 5,075 Days
• Field of Search: 705 36 R, 705 35, 705 37
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

A system for trading a plurality of derivative financial instruments comprises a processor operable to receive a first order to buy a derivative financial instrument that represents a contestant in a contest. The processor is further operable to receive a second order to sell the derivative financial instrument. The processor is further operable to determine a market price based at least in part on the first order and the second order. The processor is further operable to execute a trade at the determined market price. The system further comprises a memory operable to store the first order and/or the second order.

Claims

1. An apparatus, comprising:

at least one processor; and

at least one memory that stores at least one of a first order and a second order, and that stores instructions which, when executed by the at least one processor, direct the at least one processor to;

receive, from a first trader of a group of traders, a first order to buy a financial instrument that represents a contestant in a contest associated with a television show, wherein the first trader is associated with a first account of virtual electronic currency;

receive, from a second trader of the group of traders, a second order to sell the financial instrument, wherein the second trader is associated with a second account of virtual electronic currency;

determine a price of the financial instrument based at least in part on the first order, the second order, and at least one of a result associated with a stage of the contest and a performance of the contestant in the contest;

execute a trade at the determined price;

determine an updated price of the financial instrument if the contestant loses the contest, in which the act of determining the updated price comprises;

reducing the price of the financial instrument to zero if the contestant loses the contest;

determine that the first contestant advanced beyond a subsequent stage of the contest;

award a dividend to the first trader responsive to determining that the contestant advanced beyond a subsequent stage of the contest; and

determine whether to temporarily halt trading of the financial instrument during an episode of the television show.

2. The apparatus of claim 1, wherein the instructions, when executed by the at least one processor, further direct the at least one processor to:

determine an initial price of the financial instrument based at least in part on a characteristic of the contestant.

3. The apparatus of claim 2, wherein the characteristic of the contestant comprises at least one of an achievement of the contestant, a record of the contestant, a ranking of the contestant, and a skill of the contestant.

4. The apparatus of claim 1, wherein the instructions, when executed by the at least one processor, further direct the at least one processor to:

adjust the price based at least in part on a subsequent result associated with at least one subsequent stage of the contest.

5. The apparatus of claim 4, wherein adjusting the price comprises:

adjusting the price after each stage of the contest.

6. The apparatus of claim 1, wherein the instructions, when executed by the at least one processor, further direct the at least one processor to:

compare a first portfolio of financial instruments associated with the first trader against a second portfolio of financial instruments associated with the second trader; and

determine a winning trader from among the group of traders based at least in part on the comparison between the first and second portfolios.

7. The apparatus of claim 1, wherein the financial instrument comprises a stock,

in which the television show is a game show comprising the contest,

in which a game show host of the game show interacts with multiple contestants of the game show including the contestant during the contest, and

in which the game show host does not compete in the contest.

8. The apparatus of claim 1, wherein the financial instrument comprises a bond.

9. The apparatus of claim 1, wherein reducing the price to zero if the contestant loses the contest comprises:

reducing the price to zero upon determining that the contestant was eliminated from the contest,

wherein the contest comprises an awards event, and

and wherein the contestant comprises at least one nominee for an award at the awards event, wherein more than two contestants are nominated for the award prior to a start of the awards event.

10. The apparatus of claim 1, wherein the stage of the contest is one of a plurality of stages of the contest, the plurality of stages of the contest respectively corresponding to a plurality of episodes of the television show.

11. The apparatus of claim 1, wherein the stage of the contest corresponds to an episode of the television show.

12. The apparatus of claim 1, wherein:

the first trader is associated with a first account of electronic currency; and

the second trader is associated with a second account of electronic currency; and

the instructions, when executed by the at least one processor, further direct the at least one processor to;

debit the first account according to the trade; and

credit the second account with proceeds of the trade.

13. The apparatus of claim 12, wherein the electronic currency is backed by at least one of real currency and artificial currency.

14. The apparatus of claim 1, wherein the instructions, when executed by the at least one processor, further direct the at least one processor to:

determine a redemption value associated with the financial instrument; and

adjust the redemption value based at least in part on a subsequent result associated with at least one subsequent stage of the contest,

in which the contest comprises an awards event, and

in which the contestant comprises at least one nominee for an award at the awards event, wherein more than two contestants are nominated for the award prior to a start of the awards event.

15. The apparatus of claim 14, wherein the redemption value represents a maximum value for which a trading exchange will redeem a share of the financial instrument.

16. The apparatus of claim 14, wherein the redemption value represents a minimum value for which a trading exchange will redeem a share of the financial instrument.

17. The apparatus of claim 1, wherein the instructions, when executed by the at least one processor, further direct the at least one processor to:

regulate a contents of a portfolio of financial instruments associated with the first trader such that a number of shares of the financial instrument in the portfolio does not exceed a configurable percentage of all of the shares of financial instruments in the portfolio.

18. The apparatus of claim 1, wherein the instructions, when executed by the at least one processor, further direct the at least one processor to:

receive a passcode from the first trader; and

verify, based at least in part on the passcode, that the first trader is eligible to participate in trading the financial instrument,

wherein the contest is not a sporting competition.

19. The apparatus of claim 18, wherein the first trader obtained the passcode via purchase of a particular product.

20. The apparatus of claim 1, wherein executing the trade comprises:

executing a trade of the financial instrument at the price using at least one of real currency and artificial currency.

21. The apparatus of claim 1, wherein the television show comprises a reality-based television series.

22. The apparatus of claim 1, wherein the television show comprises a game show.

23. The apparatus of claim 1, wherein the processor is further operable to:

regulate a contents of a portfolio of financial instruments associated with the first trader such that the portfolio does not comprise more than a configurable percentage of outstanding shares of the financial instrument.

24. The apparatus of claim 1, wherein the processor is further operable to:

define the group of traders, the group of traders being eligible to participate in trading the financial instrument.

25. The apparatus of claim 24, wherein defining the group of traders comprises:

defining the group of traders based at least in part on at least one of subscriber status with an internet service, membership status with a particular organization, and customer status with respect to a particular company.

26. The apparatus of claim 1, wherein the processor is further operable to:

determine a second price of a second financial instrument, the second financial instrument representing at least one of a second contestant in the contest associated with the television show and another contestant in another contest associated with another television show; and

execute a second trade at the second price.

27. A method comprising:

receiving, by at least one processor of a computing device, from a first trader of a group of traders, a first order to buy a financial instrument that represents a contestant in a contest associated with a television show, wherein the first trader is associated with a first account of virtual electronic currency;

receiving, by the at least one processor, from a second trader of the group of traders, a second order to sell the financial instrument wherein the second trader is associated with a second account of virtual electronic currency;

determining, by the at least one processor, a price of the financial instrument based at least in part on the first order, the second order, and at least one of a result associated with a stage of the contest and a performance of the contestant in the contest;

executing, by the at least one processor, a trade at the determined price;

determining that the contestant lost the contest;

determining an updated price of the financial instrument if the contestant loses the contest, in which the act of determining the updated price comprises;

reducing the price of the financial instrument to zero responsive to the contestant losing the contest;

determining that the first contestant advanced beyond a subsequent stage of the contest;

awarding a dividend to the first trader responsive to determining that the contestant advanced beyond a subsequent stage of the contest; and

determining whether to temporarily halting trading of the financial instrument during an episode of the television show.

28. The method of claim 27, further comprising:

determining an initial price of the financial instrument based at least in part on a characteristic of the contestant.

29. The method of claim 27, further comprising:

adjusting the price based at least in part on a subsequent result associated with at least one subsequent stage of the contest.

30. The method of claim 29, wherein adjusting the price comprises:

adjusting the price after each stage of the contest.

31. The method of claim 27, further comprising:

comparing a first portfolio of financial instruments associated with the first trader against a second portfolio of financial instruments associated with second trader; and

determining a winning trader from among the group of traders based at least in part on the comparison between the first and second portfolios.

32. The method of claim 27, wherein the financial instrument comprises a stock,

in which the television show is a game show comprising the contest,

in which a game show host of the game show interacts with multiple contestants of the game show including the contestant during the contest, and

in which the game show host does not compete in the contest.

33. The method of claim 27, wherein the financial instrument comprises a bond,

in which the contest comprises an awards event, and

in which the contestant comprises at least one nominee for an award at the awards event, wherein more than two contestants are nominated for the award prior to a start of the awards event.

34. The method of claim 27, wherein reducing the price to zero if the contestant loses the contest comprises:

reducing the price to zero upon determining that the contestant was eliminated from the contest.

35. The method of claim 27, wherein the stage of the contest is one of a plurality of stages of the contest, the plurality of stages of the contest respectively corresponding to a plurality of episodes of the television show.

36. The method of claim 27, wherein the stage of the contest corresponds to an episode of the television show.

37. The method of claim 27, wherein:

the first trader is associated with a first account of electronic currency; and

the second trader is associated with a second account of electronic currency; and

wherein the method further comprises;

debiting, by the processor, the first account according to the trade; and

crediting, by the processor, the second account with proceeds of the trade.

38. The method of claim 27, further comprising:

determining a redemption value associated with the financial instrument; and

adjusting the redemption value based at least in part of a subsequent result associated with at least one subsequent stage of the contest.

39. The method of claim 38, wherein the redemption value represents a maximum value for which a trading exchange will redeem a share of the financial instrument.

40. The method of claim 27, further comprising:

regulating a contents of a portfolio of financial instruments associated with the first trader such that a number of shares of the financial instrument in the portfolio does not exceed a configurable percentage of all of the shares of financial instruments in the portfolio.

41. The method of claim 27, further comprising:

receiving a passcode from the first trader; and

verifying, based at least in part on the passcode, that the first trader is eligible to participate in trading the financial instrument,

wherein the contest is not a sports competition.

42. A non-transitory computer-readable medium storing instructions, the computer-readable medium being a tangible medium, the instructions being executable by a processor to:

receive, from a first trader of a group of traders, a first order to buy a financial instrument that represents a contestant in a contest associated with a television show wherein the first trader is associated with a first account of virtual electronic currency;

receive, from a second trader of a group of traders, a second order to sell the financial instrument, wherein the second trader is associated with a second account of virtual electronic currency;

determine a price of the financial instrument based at least in part of the first order,

the second order, and at least one of a result associated with a stage of the contest and a performance of the contestant in the contest;

execute a trade at the determined price;

determine an updated price of the financial instrument if the contestant loses the contest, in which the act of determining the updated price comprises;

reducing the price of the financial instrument to zero responsive to the contestant losing the contest;

determine that the first contestant advanced beyond a subsequent stage of the contest;

award a dividend to the first trader responsive to determining that the contestant advanced beyond a subsequent stage of the contest; and

determine whether to temporarily halt trading of the financial instrument during an episode of the television show.

43. The non-transitory computer-readable medium of claim 42, wherein the instructions are further executable by the processor to:

determine an initial price of the financial instrument based at least in part on a characteristic of the contestant.

44. The non-transitory computer-readable medium of claim 42, wherein the instructions are further executable by the processor to:

adjust the price based at least in part on a result associated with at least one stage of the contest.

45. The non-transitory computer-readable medium of claim 44, wherein adjusting the price comprises:

adjusting the price after each stage of the contest.

46. The non-transitory computer-readable medium of claim 42, wherein the instructions are further executable by the processor to:

compare a first portfolio of financial instruments associated with the first trader against a second portfolio of financial instruments associated with the second trader; and

determine a winning trader from among the group of traders based at least in part on the comparison between the first and second portfolios.

47. The non-transitory computer-readable medium of claim 42, wherein the financial instrument comprises a stock,

in which the television show is a game show comprising the contest,

in which a game show host of the game show interacts with multiple contestants of the game show including the contestant during the contest, and

in which the game show host does not compete in the contest.

48. The non-transitory computer-readable medium of claim 42, wherein the financial instrument comprises a bond.

49. The non-transitory computer-readable medium of claim 42, wherein reducing the price to zero if the contestant loses the contest comprises:

reducing the price to zero upon determining that the contestant was eliminated from the contest.

50. The non-transitory computer-readable medium of claim 42, wherein the stage of the contest is one of a plurality of stages of the contest, the plurality of stages of the contest respectively corresponding to a plurality of episodes of the television show.

51. The non-transitory computer-readable medium of claim 42, wherein the stage of the contest corresponds to an episode of the television show.

52. The non-transitory computer-readable medium of claim 42, wherein:

the first trader is associated with a first account of electronic currency;

the second trader is associated with a second account of electronic currency; and

the instructions are further executable by the processor to;

debit the first account according to the trade;

an

credit the second account with proceeds of the trade.

53. The non-transitory computer-readable medium of claim 42, wherein the instructions are further executable by the processor to:

determine a redemption value associated with the financial instrument; and

adjust the redemption value based at least in part on a subsequent result associated with at least one subsequent stage of the contest.

54. The non-transitory computer-readable medium of claim 53, wherein the redemption value represents a maximum value for which a trading exchange will redeem a share of the financial instrument.

55. The non-transitory computer-readable medium of claim 42, wherein the instructions are further executable by the processor to:

regulate a contents of a portfolio of financial instruments associated with the first trader such that a number of shares of the financial instrument in the portfolio does not exceed a configurable percentage of all of the shares of financial instruments in the portfolio.

56. The non-transitory computer-readable medium of claim 42, wherein the instructions are further executable by the processor to:

receive a passcode from the first trader; and

verify, based at least in part on the passcode, that the first trader is eligible to participate in trading the financial instrument.

57. An apparatus, comprising:

a processor operable to;

determine an initial price of a financial instrument, wherein the processor is operable to determine the initial price based at least in part on a characteristic of a contestant in a contest, the financial instrument representing the contestant in the contest;

receive, from a first trader of a group of traders, a first order to buy the financial instrument, wherein the first trader is associated with a first account of virtual electronic currency;

receive, from a second trader of the group of traders, a second order to sell the financial instrument, wherein the second trader is associated with a second account of virtual electronic currency;

determine a price of the financial instrument based at least in part on the first order and the second order;

execute a trade of the financial instrument at the price;

determine an adjusted price of the financial instrument based at least in part on at least one of a result associated with a stage of the contest and a performance of the contestant in the contest;

execute a plurality of subsequent trades at the adjusted price;

determine a further updated price of the financial instrument if the contestant loses the contest, in which the act of determining the further updated price comprises;

reducing the adjusted price of the financial instrument to zero responsive to the contestant losing the contest;

determine that the first contestant advanced beyond a subsequent stage of the contest;

award a dividend to the first trader responsive to determining that the contestant advanced beyond a subsequent stage of the contest; and

determine whether to temporarily halt trading of the financial instrument during an episode of the television show; and

a memory operable to store at least one of the first order and the second order.

58. The apparatus of claim 57, wherein the characteristic of the contestant comprises at least one of an achievement of the contestant, a record of the contestant, a ranking of the contestant, and a skill of the contestant.

59. The apparatus of claim 57, wherein reducing the adjusted price to zero if the contestant loses the contest comprises:

reducing the adjusted price to zero upon determining that the contestant was eliminated from the contest.

60. The apparatus of claim 57, wherein the processor is further operable to:

compare a first portfolio of financial instruments associated with the first trader against a second portfolio of financial instruments associated with the second trader; and

determine a winning trader from among the group of traders based at least in part on the comparison between the first and second portfolios.

61. The apparatus of claim 57, wherein the financial instrument comprises a stock,

in which the television show is a game show comprising the contest,

in which a game show host of the game show interacts with multiple contestants of the game show including the contestant during the contest, and

in which the game show host does not compete in the contest.

62. The apparatus of claim 57, wherein the financial instrument comprises a bond.

63. The apparatus of claim 57, wherein executing the trade comprises:

executing a trade of the financial instrument at the price using at least one of real currency and artificial currency.

64. The apparatus of claim 57, wherein the processor is further operable to:

determine a redemption value associated with the financial instrument; and

adjust the redemption value based at least in part on a subsequent result associated with at least one subsequent stage of the contest.

65. The apparatus of claim 64, wherein the redemption value represents a minimum value for which a trading exchange will redeem a share of the financial instrument.

66. The apparatus of claim 57, wherein the processor is further operable to:

regulate a contents of a portfolio of financial instruments associated with the first trader such that a number of shares of the financial instrument in the portfolio does not exceed a configurable percentage of all of the shares of financial instruments in the portfolio.

67. The apparatus of claim 57, wherein the processor is further operable to:

regulate a contents of a portfolio of financial instruments associated with the first trader such that the portfolio does not comprise more than a configurable percentage of outstanding shares of the financial instrument.

68. The apparatus of claim 57, wherein the processor is further operable to:

receive a passcode from the first trader, wherein the first trader obtained the passcode via purchase of a particular product; and

verify, based at least in part on the passcode, that the first trader is eligible to participate in trading the financial instrument.

69. The apparatus of claim 57, wherein the processor is further operable to:

define the group of traders, the group of traders being eligible to participate in trading the financial instrument.

70. The apparatus of claim 69, wherein defining the group of traders comprises:

defining the group of traders based at least in part on at least one of subscriber status with an internet service, membership status with a particular organization, and customer status with respect to a particular company.

71. The apparatus of claim 57, wherein the processor is further operable to:

determine a second price of a second financial instrument, the second financial instrument representing with at least one of a second contestant in the contest and another contestant in another contest; and

execute a second trade at the second price.

72. The apparatus of claim 57, wherein:

the contest comprises a sports tournament; and

the contestant comprises at least one of an athlete and a team in the sports tournament.

73. The apparatus of claim 57, wherein the contest is associated with a television show.

74. The apparatus of claim 57, wherein:

the contest comprises an awards event; and

the contestant comprises at least one nominee for an award at the awards event, wherein more than two contestants are nominated for the award prior to a start of the awards event.

75. The apparatus of claim 57, wherein:

the contest comprises a political election; and

the contestant comprises at least one politician competing in the political election.

76. The apparatus of claim 57, wherein:

the contest comprises a survey; and

the contestant comprises at least one individual, the at least one individual being a subject of the survey.

77. A method, comprising:

determining, by a processor of a computing device, an initial price of a financial instrument, the initial price is determined based at least in part on a characteristic of a contestant in a contest, the financial instrument representing the contestant in the contest;

receiving, by the processor, from a first trader of a group of traders, a first order to buy the financial instrument, wherein the first trader is associated with a first account of virtual electronic currency;

receiving, by the processor, from a second trader of the group of traders, a second order to sell the financial instrument, wherein the second trader is associated with a second account of virtual electronic currency;

determining, by the processor, a price of the financial instrument based at least in part on the first order and the second order;

executing, by the processor, a trade of the financial instrument at the price;

determining, by the processor, an adjusted price of the financial instrument based at least in part on at least one of a result associated with a stage of the contest and a performance of the contestant in the contest;

executing, by the processor, a plurality of subsequent trades at the adjusted price;

determining that the contestant lost the contest; and

determining a further updated price of the financial instrument responsive to determining that the contestant lost the contest, in which the act of determining the further updated price comprises;

reducing, by the processor, the adjusted price to zero based on the act of determining that the contestant lost the contest;

determining that the first contestant advanced beyond a subsequent stage of the contest;

awarding a dividend to the first trader responsive to determining that the contestant advanced beyond a subsequent stage of the contest; and

determining whether to temporarily halting trading of the financial instrument during an episode of a television show.