System and Method for Trading Based on Tournament-Style Events

• US 20060173764A1
• Filed: 04/18/2006
• Published: 08/03/2006
• Est. Priority Date: 03/25/1996
• Status: Active Grant

• Current Assignee: CFPH LLC (Cantor Fitzgerald, L.P.)
• Original Assignee: CFPH LLC (Cantor Fitzgerald, L.P.)
• Inventors: Lefkowitz, James J., Costakis, Alexander M.
• Granted Patent: US 10,586,282 B2
• Time in Patent Office: Days
• US Class Current: 705/35
• 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. A system for trading a plurality of derivative financial instruments, comprising:

a processor operable to;

receive a first order to buy a derivative financial instrument that represents a contestant in a contest;

receive a second order to sell the derivative financial instrument;

determine a market price based at least in part on the first order and the second order; and

execute a trade at the determined market price; and

a memory operable to store the first order and/or the second order.

2. The system of claim 1, wherein:

the derivative financial instrument is associated with an initial price; and

the initial price is based at least in part on at least one ranking and/or achievement associated with the contestant.

3. The system of claim 1, wherein the processor is further operable to adjust the market price associated with the derivative financial instrument, wherein the adjustment is based at least in part on a result associated with at least one stage of the contest.

4. The system of claim 3, wherein the adjustment is made after each stage of the contest.

5. The system of claim 1, wherein the processor is further operable to:

determine that the contestant was eliminated from the contest; and

adjust the market price associated with the derivative financial instrument, the adjustment based at least in part on the determination that the contestant was eliminated.

6. The system of claim 5, wherein:

the contestant was eliminated in a particular stage of the contest; and

the adjustment is based at least in part on the particular stage of the contest.

7. The system of claim 1, wherein the processor is further operable to:

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

determine a winning trader, the determination based a least in part on the comparison.

8. The system of claim 1, wherein:

the contest represents a sports tournament; and

the contestant represents an athlete and/or team in the sports tournament.

9. The system of claim 1, wherein:

the contest represents a reality-based television show; and

the contestant represents a participant in the reality-based television show.

10. The system of claim 1, wherein:

the contest represents an awards event; and

the contestant represents at least one nominee for an award.

11. The system of claim 1, wherein:

the contest represents a political event; and

the contestant represents at least one politician associated with the political event.

12. The system of claim 1, wherein:

the contest represents a survey; and

the contestant represents at least one public figure associated with the survey.

13. The system of claim 1, wherein:

the first order was received from a first trader, the first trader associated with a first account of electronic currency;

the second order was received from a second trader, the second trader associated with a second account of electronic currency; and

the processor is further operable to;

debit the first account according to the executed trade; and

credit the second account with proceeds of the executed trade.

14. The system of claim 1, wherein the processor is further operable to:

determine a redemption value associated with the derivative financial instrument; and

adjust the redemption value associated with the derivative financial instrument, wherein the adjustment is based at least in part on a result associated with at least one stage of the contest.

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

16. The system of claim 1, wherein:

the first order was received from a first trader;

the derivative financial instrument represents a first derivative financial instrument;

the first trader is associated with a portfolio comprising a plurality of shares of one or more derivative financial instruments; and

the processor is further operable to reject the first order if execution of the first order would cause the portfolio to comprise more than a configurable threshold of shares of the first derivative financial instrument.

17. The system of claim 1, wherein:

the first order was received from a first trader; and

the processor is further operable to;

receive a passcode from the first trader, wherein the passcode is associated with a purchase of a product; and

deny the first trader access to a system if the passcode is invalid.

18. A method for trading a plurality of derivative financial instruments, comprising:

receiving a first order to buy a derivative financial instrument that represents a contestant in a contest;

receiving a second order to sell the derivative financial instrument;

determining a market price based at least in part on the first order and the second order; and

executing a trade at the determined market price.

19. The method of claim 18, wherein:

the derivative financial instrument is associated with an initial price; and

the initial price is based at least in part on at least one ranking and/or achievement associated with the contestant.

20. The method of claim 18, further comprising adjusting the market price associated with the derivative financial instrument, wherein the adjustment is based at least in part on a result associated with at least one stage of the contest.

21. The method of claim 20, wherein the adjustment is made after each stage of the contest.

22. The method of claim 18, further comprising:

determining that the contestant was eliminated from the contest; and

reducing the market price associated with the derivative financial instrument, the reduction based at least in part on the determination that the contestant was eliminated.

23. The method of claim 22, wherein:

the contestant was eliminated in a particular stage of the contest; and

the reduction is based at least in part on the particular stage of the contest.

24. The method of claim 18, further comprising:

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

determining a winning trader, the determination based a least in part on the comparison.

25. The method of claim 18, wherein:

the contest represents a sports tournament; and

the contestant represents an athlete and/or team in the sports tournament.

26. The method of claim 18, wherein:

the contest represents a reality-based television show; and

the contestant represents a participant in the reality-based television show.

27. The method of claim 18, wherein:

the contest represents an awards event; and

the contestant represents at least one nominee for an award.

28. The method of claim 18, wherein:

the contest represents a political event; and

the contestant represents at least one politician associated with the political event.

29. The method of claim 18, wherein:

the contest represents a survey; and

the contestant represents at least one public figure associated with the survey.

30. The method of claim 18, wherein:

the first order was received from a first trader, the first trader associated with a first account of electronic currency; and

the second order was received from a second trader, the second trader associated with a second account of electronic currency;

and further comprising;

debiting the first account according to the executed trade; and

crediting the second account with proceeds of the executed trade.

31. The method of claim 18, further comprising:

determining a redemption value associated with the derivative financial instrument; and

adjusting the redemption value associated with the derivative financial instrument, wherein the adjustment is based at least in part on a result associated with at least one stage of the contest.

32. The method of claim 31, wherein the redemption value represents the maximum value for which an exchange will redeem a share of the derivative financial instrument.

33. The method of claim 18, wherein:

the first order was received from a first trader;

the derivative financial instrument represents a first derivative financial instrument; and

the first trader is associated with a portfolio comprising a plurality of shares of one or more derivative financial instruments;

and further comprising;

rejecting the first order if execution of the first order would cause the portfolio to comprise more than a configurable threshold of shares of the first derivative financial instrument.

34. The system of claim 18, wherein the first order was received from a first trader, and further comprising:

receiving a passcode from the first trader, wherein the passcode is associated with a purchase of a product; and

denying the first trader access to a system if the passcode is invalid.

35. Logic for trading a plurality of derivative financial instruments, the logic encoded in computer-readable media and operable when executed to:

receive a first order to buy a derivative financial instrument that represents a contestant in a contest;

receive a second order to sell the derivative financial instrument;

determine a market price based at least in part on the first order and the second order; and

execute a trade at the determined market price.

36. The logic of claim 35, wherein:

the derivative financial instrument is associated with an initial price; and

the initial price is based at least in part on at least one ranking and/or achievement associated with the contestant.

37. The logic of claim 35, wherein the logic is further operable when executed to adjust the market price associated with the derivative financial instrument, wherein the adjustment is based at least in part on a result associated with at least one stage of the contest.

38. The logic of claim 37, wherein the adjustment is made after each stage of the contest.

39. The logic of claim 35, wherein the logic is further operable when executed to:

determine that the contestant was eliminated from the contest; and

reduce the market price associated with the derivative financial instrument, the reduction based at least in part on the determination that the contestant was eliminated.

40. The logic of claim 39, wherein:

the contestant was eliminated in a particular stage of the contest; and

the reduction is based at least in part on the particular stage of the contest.

41. The logic of claim 35, wherein the logic is further operable when executed to:

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

determine a winning trader, the determination based a least in part on the comparison.

42. The logic of claim 35, wherein:

the contest represents a sports tournament; and

the contestant represents an athlete and/or team in the sports tournament.

43. The logic of claim 35, wherein:

the contest represents a reality-based television show; and

the contestant represents a participant in the reality-based television show.

44. The logic of claim 35, wherein:

the contest represents an awards event; and

the contestant represents at least one nominee for an award.

45. The logic of claim 35, wherein:

the contest represents a political event; and

the contestant represents at least one politician associated with the political event.

46. The logic of claim 35, wherein:

the contest represents a survey; and

the contestant represents at least one public figure associated with the survey.

47. The logic of claim 35, wherein:

the first order was received from a first trader, the first trader associated with a first account of electronic currency;

the second order was received from a second trader, the second trader associated with a second account of electronic currency; and

the logic is further operable when executed to;

debit the first account according to the executed trade; and

credit the second account with proceeds of the executed trade.

48. The logic of claim 35, wherein the logic is further operable when executed to:

determine a redemption value associated with the derivative financial instrument; and

adjust the redemption value associated with the derivative financial instrument, wherein the adjustment is based at least in part on a result associated with at least one stage of the contest.

49. The logic of claim 48, wherein the redemption value represents the maximum value for which an exchange will redeem a share of the derivative financial instrument.

50. The logic of claim 35, wherein:

the first order was received from a first trader;

the derivative financial instrument represents a first derivative financial instrument;

the first trader is associated with a portfolio comprising a plurality of shares of one or more derivative financial instruments; and

the logic is further operable when executed to reject the first order if execution of the first order would cause the portfolio to comprise more than a configurable threshold of shares of the first derivative financial instrument.

51. The logic of claim 35, wherein:

the first order was received from a first trader; and

the logic is further operable when executed to;

receive a passcode from the first trader, wherein the passcode is associated with a purchase of a product; and

deny the first trader access to a system if the passcode is invalid.