Methods and apparatus relating to the formulation and trading of investment contracts
First Claim
1. A data processing system to enable the formulation of multi-party investment contracts, the system comprising:
- input means by which an ordering party can input contract data relating to a least one phenomenon, each said phenomenon having a range of future outcomes and a future time of maturity, the contract data including a set of probabilities of occurrence for each outcome in said range and a consideration due to a counterparty at or after the time of matching, and further by which at least one counterparty can input registering data including a set of probabilities of occurrence for each outcome in said range; and
data processing means operable to price and match a contract for a said phenomenon from said contract data and said registering data, the pricing including;
applying at least one template of entitlement as a function of outcome to each counterparty'"'"'s set of probabilities to give one or more individual counterparty prices each equal to the ordering party'"'"'s consideration; and
applying the ordering party set of probabilities to each said template to derive an implied entitlement;
the matching including;
determining which counterparty will provide the best entitlement on maturity by comparing each implied entitlement with the consideration; and
matching the contract with that counterparty having the template for the best said comparison.
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Abstract
A data processing system to enable the formulation of multi-party investments contracts is disclosed. The system comprises input means by which an ordering party can input contract data relating to at least one phenomenon, the phenomenon having a range of future outcomes and a future time of maturity. The contract data further includes a set of probabilities of occurrence for each outcome in the range and a consideration due to a counterparty at or after the time of maturity. One or more counterparties can input registering data including a set of probabilities of occurrence for each outcome in the range. The system further includes a data processor that is operable to price and match a contract from the contract data and the registering data. The pricing includes applying at least one template of entitlement as a function of outcome to each counterparty'"'"'s set of probabilities to give one or more individual counterparty prices each equal to the ordering party'"'"'s consideration, and further, applying the ordering party'"'"'s set of probabilities to each template to derive an implied entitlement. The matching includes determining which counterparty will provide the best entitlement on maturity by comparing each implied entitlement with the consideration, and matching the contract with the counterparty having the template for the best comparison.
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Citations
20 Claims
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1. A data processing system to enable the formulation of multi-party investment contracts, the system comprising:
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input means by which an ordering party can input contract data relating to a least one phenomenon, each said phenomenon having a range of future outcomes and a future time of maturity, the contract data including a set of probabilities of occurrence for each outcome in said range and a consideration due to a counterparty at or after the time of matching, and further by which at least one counterparty can input registering data including a set of probabilities of occurrence for each outcome in said range; and
data processing means operable to price and match a contract for a said phenomenon from said contract data and said registering data, the pricing including;
applying at least one template of entitlement as a function of outcome to each counterparty'"'"'s set of probabilities to give one or more individual counterparty prices each equal to the ordering party'"'"'s consideration; and
applying the ordering party set of probabilities to each said template to derive an implied entitlement;
the matching including;
determining which counterparty will provide the best entitlement on maturity by comparing each implied entitlement with the consideration; and
matching the contract with that counterparty having the template for the best said comparison. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8)
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9. A data processing system to enable the formulation of potential multi-party investments contracts, the system comprising:
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input means by which an ordering party can input contract data relating to a least one phenomenon, each said phenomenon having a range of future outcomes and a future time of maturity, the contract data including a set of probabilities of occurrence for each outcome in said range and a consideration due to a counterparty at or after the time of matching, and further by which at least one counterparty can input registering data including a set of probabilities of occurrence for each outcome in said range; and
data processing means operable to price a contract for a said phenomenon from said contract data and said registering data, the pricing including;
applying at least one template of entitlement as a function of outcome to each counterparty'"'"'s set of probabilities to give one or more individual counterparty prices each equal to the ordering party'"'"'s consideration; and
applying the ordering party set of probabilities to each said template to derive an implied entitlement.
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10. A data processing system to enable the formulation of potential multi-party investments contracts, the system comprising:
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input means by which an ordering party can input contract data relating to a least one phenomenon, each said phenomenon having a range of future outcomes and a future time of maturity, the contract data including a set of probabilities of occurrence for each outcome in said range and a consideration due to a counterparty at or after the time of matching, and further by which at least one counterparty can input registering data including a set of probabilities of occurrence for each outcome in said range; and
data processing means operable to price and match a contract for a said phenomenon from said contract data and said registering data, the pricing including;
dividing the consideration into integer components, and for each component;
applying at least one template of entitlement as a function of outcome to each counterparty'"'"'s set of probabilities to give one or more individual counterparty prices each equal to the ordering party'"'"'s component consideration; and
applying the ordering party set of probabilities to each said template to derive an implied component entitlement;
the matching including;
determining which counterparty will provide the best entitlement on maturity by comparing each implied component entitlements with the consideration; and
matching the contract with the counterparties having the templates for the best said component comparisons.
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11. A method for the formulation of multi-party investment contracts, the method comprising the steps of:
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inputting ordering party contract data relating to at least one phenomenon, each said phenomenon having a range of future outcomes and a future time of maturity, the contract data including a set of probabilities of occurrence for each outcome in said range and a consideration due to a counterparty at or after the time of establishment;
inputting counterparty registering data including a set of probabilities of occurrence for each outcome in said range; and
pricing and matching a contract for a said phenomenon from said contract data and said registering data, said step of pricing, for each counterparty, including;
applying at least one template of entitlement as a function of outcome to the set of probabilities to give one or more individual counterparty prices; and
applying the ordering party set of probabilities to each individual counterparty template to derive an implied entitlement;
said step of matching including;
determining which counterparty will provide the best entitlement on maturity by comparing the implied entitlements with the consideration; and
matching the contract with the counterparty having the template for the best said comparison. - View Dependent Claims (12, 13, 14, 15, 16, 17, 18)
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19. A method for the formulation of potential multi-party investments contracts, the method comprising the steps of:
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inputting ordering party contract data relating to at least one phenomenon, each said phenomenon having a range of future outcomes and a future time of maturity, the contract data including a set of probabilities of occurrence for each outcome in said range and a consideration due to a counterparty at or after the time of establishment;
inputting counterparty registering data including a set of probabilities of occurrence for each outcome in said range; and
pricing a potential contract for a said phenomenon from said contract data and said registering data, said step of pricing, for each counterparty, including;
applying at least one template of entitlement as a function of outcome to the set of probabilities to give one or more individual counterparty prices; and
applying the ordering party set of probabilities to each individual counterparty template to derive an implied entitlement.
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20. A method for the formulation of multi-party investment contracts, the method comprising the steps of:
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inputting ordering party contract data relating to at least one phenomenon, each said phenomenon having a range of future outcomes and a future time of maturity, the contract data including a set of probabilities of occurrence for each outcome in said range and a consideration due to a counterparty at or after the time of establishment;
inputting counterparty registering data including a set of probabilities of occurrence for each outcome in said range; and
pricing and matching a contract for a said phenomenon from said contract data and said registering data, said step of pricing, for each counterparty, including;
dividing the consideration into integer components are for each component;
applying at least one template of entitlement as a function of outcome to the set of probabilities to give one or more individual counterparty prices; and
applying the ordering party set of probabilities to each individual counterparty template to derive an implied component entitlement;
said step of matching including;
determining which counterparty will provide the best entitlement on maturity by comparing the implied component entitlements with the consideration; and
matching the contract with the counterparty having the templates for the best said component comparisons.
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Specification