Methods and apparatus relating to the formulation and trading of risk management contracts
First Claim
1. A data processing system to enable the formulation of multi-party risk management contracts, the system comprising:
- input means by which an ordering party can input contract data representing an offered contract for a predetermined phenomenon, the phenomenon having a future range of possible outcomes at a time of maturity, and said contract data specifying the same entitlement for each said outcome due to the ordering party and a consideration due to a counterparty, and at least one counterparty can input registering data for said predetermined phenomena; and
data processing means for pricing and matching contracts from said contract data and said registering data, said pricing including calculating a counter consideration from each said registering data, and said matching including comparing said consideration with each said counter consideration to match an offered contract with at least one of said counterparties.
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Accused Products
Abstract
Methods and apparatus which deal with the management of risk relating to specified, yet unknown, future events are disclosed.
‘Sponsor’ stakeholders specify a particular product relating to an event or phenomenon for which there is a range of possible future outcomes.
‘Ordering’ stakeholders then offer contracts relating to the predetermined phenomenon and corresponding range of outcomes. The offered contracts specify an entitlement or (pay-off) at the future time of maturity for each outcome, and a consideration (or premium) payable, in exchange, to a ‘counter-party’ stakeholder.
Independently of the offered contracts, the ‘counter-party’ stakeholders input data as to their view of the likelihood of occurrence of each outcome in the predetermined range into the future, or specifically at the predetermined date of maturity.
Each offered contract is priced by the processing units by calculating counter-party premiums from the registered data, and a match attempted by a comparison of the offered premium with the calculated premiums.
Matched contracts can be further traded until maturity, and at-maturity processing handles the exchange of entitlement as between the matched parties to the contract.
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Citations
25 Claims
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1. A data processing system to enable the formulation of multi-party risk management contracts, the system comprising:
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input means by which an ordering party can input contract data representing an offered contract for a predetermined phenomenon, the phenomenon having a future range of possible outcomes at a time of maturity, and said contract data specifying the same entitlement for each said outcome due to the ordering party and a consideration due to a counterparty, and at least one counterparty can input registering data for said predetermined phenomena; and
data processing means for pricing and matching contracts from said contract data and said registering data, said pricing including calculating a counter consideration from each said registering data, and said matching including comparing said consideration with each said counter consideration to match an offered contract with at least one of said counterparties. - View Dependent Claims (2, 3, 4)
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5. A method to enable the formulation of multi-party risk management contracts, the method comprising the steps of:
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(a) inputting to data processing apparatus, by input means, ordering data contract data representing an offered contract for a predetermined phenomenon, the phenomenon having a range of possible outcomes at a time of maturity, said contract data specifying the same entitlement for each said outcome due to the ordering party and a consideration due to a counterparty;
(b) inputting to said data processing apparatus, by input means, counterparty registering data relating to the range of possible outcomes for said predetermined phenomenon; and
(c) pricing and matching the offered contract, by the data processing apparatus, comprising the steps of;
(i) calculating a counter consideration from each counterparty registering data;
(ii) comparing said consideration with each said counter consideration; and
(iii) matching the contract on the basis of the comparison. - View Dependent Claims (6, 7, 8, 9)
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10. A data processing system to enable the formulation of multi-party risk management contracts, the system comprising:
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input means by which an ordering party can input contract data specifying an entitlement due to the ordering party and a consideration due to a counterparty, both the entitlement and the consideration being due on match of a contract, and at least one counterparty can input counter considerations for the contract relevant to a range of possible entitlements; and
data processing means for matching a contract from said consideration and the counter consideration for the specified entitlement by comparing said consideration with each said counter consideration to match an offered contract with at least one of said counterparties. - View Dependent Claims (11, 12)
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13. A method to enable the formulation of multi-party risk management contracts, the method comprising the steps of:
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(a) inputting to data processing apparatus, by input means, ordering party contract data specifying an entitlement due to the ordering party and a consideration due to a counterparty, both the entitlement and the consideration due on match of a contract;
(b) inputting to said data processing apparatus, by input means, counterparty counter considerations for the contract relevant to a range of possible entitlements; and
(c) matching the offered contract, by the data processing apparatus, comprising the steps of;
(i) comparing said consideration with said counter consideration for the specified entitlement; and
(ii) matching the contract on the basis of the comparison. - View Dependent Claims (14, 15)
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16. A data processing system to enable the management of risk by the formulation of risk management contracts, the system comprising:
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data input means by which participating parties can input data concerning at least one predetermined phenomenon, each phenomenon having a range of possible outcomes and a future time of maturity, and data processing means, coupled to each input means, for pricing and matching contracts between participating parties, and wherein each contract is priced and matched on the basis of offering data specifying entitlements due at maturity for the range of possible outcomes for one or more of said phenomena, and registering data of the likelihood of each outcome in said predetermined range of outcomes at maturity for one or more of said phenomena, said offering data and said pricing data being derived from said participating party data. - View Dependent Claims (17, 18)
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19. A method for enabling the management of risk by the formulation of risk management contracts, the method comprising the steps of:
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participating parties inputting, by at least one data input means, data concerning at least one predetermined phenomenon, each said phenomenon having a range of future outcomes and a future time of maturity; and
pricing and matching contracts between participating parties, by data processing means, whereby each contract is priced and matched on the basis of offering data specifying entitlements due at maturity for the range of possible outcomes for one or more of said phenomena, and registering data of the likelihood of each outcome in said predetermined range of outcomes at maturity for one or more of said phenomena, said offering data and said pricing data being derived from said participating party data. - View Dependent Claims (20, 21)
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22. A data processing system to enable the formulation of multi-party risk management contracts, the system comprising:
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input means by which an ordering party can input contract data representing an offered contract for a predetermined phenomenon, the phenomenon having a future range of possible outcomes at a time of maturity, and said contract data specifying the same entitlement for each said outcome due to the ordering party, and at least one counterparty can input registering data for said predetermined phenomena; and
data processing means for pricing and matching contracts from said contract data and said registering data, said pricing including calculating a consideration due to the counterparty from each said registering data, and said matching including comparing said considerations to match an offered contract with at least one of said counterparties. - View Dependent Claims (23)
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24. A method to enable the formulation of multi-party risk management contracts, the method comprising the steps of:
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(a) inputting to data processing apparatus, by input means, ordering data contract data representing an offered contract for a predetermined phenomenon, the phenomenon having a range of possible outcomes at a time of maturity, said contract data specifying the same entitlement for each said outcome due to the ordering party;
(b) inputting to said data processing apparatus, by input means, counterparty registering data relating to the range of possible outcomes for said predetermined phenomenon; and
(c) pricing and matching the offered contract, by the data processing apparatus, comprising the steps of;
(i) calculating a consideration due to each counterparty from each counterparty registering data;
(ii) comparing said calculated considerations; and
(iii) matching the contract on the basis of the comparison. - View Dependent Claims (25)
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Specification