System and methods for creating, trading, and settling currency futures contracts

• US 20070136180A1
• Filed: 03/24/2006
• Published: 06/14/2007
• Est. Priority Date: 12/14/2005
• Status: Abandoned Application

• Current Assignee: Madison Tyler LLC
• Original Assignee: Madison Tyler LLC
• Inventors: Salomon, David, Harris, Larry, Viola, Vincent
• Application Number:
  US11/389,397
• Publication Number:
  US 20070136180A1
• Time in Patent Office: Days
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

The present invention provides for an electronic exchange that provides a marketplace for the trading and settling of currency futures contracts, having methods and systems that include features such as an enhanced execution facility, clearing facility and futures contracts to facilitate such market without the disadvantages of the existing foreign exchange market centers and currency futures contract markets.

Claims

1. A method for operating an electronic exchange to provide a marketplace for the trading and settling of currency futures contracts comprising the steps of:

establishing at least one series of at least more than one currency futures contracts for the purchase of a particular currency and sale of another particular currency, wherein each such contract is comprised of

a monetary amount that is denominated in one of said two particular currencies, wherein said monetary amount is the same for each such contract in the series,

an initial listing date, wherein for each such contract in the series other than the first such contract in the series, said initial listing date is a common fixed number of at least one but not more than five business days following the initial listing date of the immediately prior contract in the series,

a final settlement date that is subsequent to said initial listing date, and

other terms for trading said currencies, and

providing an interface for listing information concerning each such contract.

2. The method of claim 1, wherein said monetary amount is ten thousand or less.

3. The method of claim 1, wherein said information concerning each said currency futures contract listed via said interface comprises information from among the set including an identifier for such contract, such contract'"'"'s last bid price, such contract'"'"'s last offered price and such contract'"'"'s executed transaction price.

4. The method of claim 1, wherein said other terms for such contract include a provision whereby such contract can be indicated as elected by a purchaser or seller of such contract to be, on or prior to such contract'"'"'s final settlement date, extinguished automatically and replaced with a new contract with a later final settlement date than said contract.

5. The method of claim 1, comprising the further step of receiving, for each such contract, orders to purchase a quantity of such contracts at a specified bid price and/or orders to sell a quantity of such contracts at a specified offer price.

6. The method of claim 5, comprising the further step of matching an order to purchase a quantity of a specified contract at a specified bid price with an order to sell a quantity of the same specified contract at a specified offer price.

7. The method of claim 6, comprising the further step of providing notice to each member that placed an order which has been matched that such order has been matched.

8. The method of claim 7, wherein said other terms for such contract include a provision specifying, for the new contract, the number of business days later than the final settlement date of the original matched contract, for such new contract'"'"'s final settlement date.

9. The method of claim 6, comprising the further step of causing a new contract to be entered into in response to receiving instructions from at least one purchaser or seller that placed an order which has been matched, that such original matched contract be extinguished and replaced with a new contract, with a later final settlement date than the final settlement date of said original matched contract.

10. The method of claim 9, wherein said new contract shall have a final settlement date that is a specified number of business days after the final settlement date of said original matched contract.

11. The method of claim 6, wherein the final settling occurs via private bilateral final settlement comprising the further steps of

receiving instructions from at least one purchaser or seller that placed an order which has been matched indicating that such purchaser or seller has elected to engage in private bilateral final settlement of such matched contract,

receiving prior to the final settlement date said purchaser or seller'"'"'s request to be given access to identity and contract position information of certain other market participants,

providing an interface for receiving instructions from said purchaser or seller indicating that such purchaser or seller desires such contract to be settled via such private bilateral final settlement with an other market participant and an identification of such other market participant,

providing an interface for displaying each such contract identified for direct bilateral final settlement, and

causing the final settlement of said contract external to the clearing facility.

12. The method of claim 11, comprising the further step of determining whether said one purchaser or seller meets qualifications to engage in private bilateral final settlement.

13. A method for operating an electronic exchange to provide a marketplace for the trading and settling of currency futures contracts comprising the steps of:

establishing at least one series of at least more than one currency futures contracts for the purchase of a particular currency and sale of another particular currency, wherein each such contract is comprised of

a monetary amount of ten thousand or less that is denominated in one of said two particular currencies, wherein said monetary amount is the same for each such contract in the series,

an initial listing date, wherein for each such contract in the series other than the first such contract in the series, said initial listing date is a common fixed number of business days following the initial listing date of the immediately prior contract in the series,

a final settlement date that is subsequent to said initial listing date, and

other terms for trading said currencies, and

providing an interface for listing information concerning each such contract.

14. The method of claim 13, wherein said initial listing date is a common fixed number of at least one but not more than five business days following the initial listing date of the immediately prior contract in the series.

15. The method of claim 13, wherein said information concerning each said currency futures contract listed via said interface comprises information from among the set including an identifier for such contract, such contract'"'"'s last bid price, such contract'"'"'s last offered price and such contract'"'"'s executed transaction price.

16. The method of claim 13, wherein said other terms for such contract include a provision whereby such contract can be indicated as elected by a purchaser or seller of such contract to be, on or prior to such contract'"'"'s final settlement date, extinguished automatically and replaced with a new contract with a later final settlement date than said contract.

17. The method of claim 13, comprising the further step of receiving, for each such contract, orders to purchase a quantity of such contracts at a specified bid price and/or orders to sell a quantity of such contracts at a specified offer price.

18. The method of claim 17, comprising the further step of matching an order to purchase a quantity of a specified contract at a specified bid price with an order to sell a quantity of the same specified contract at a specified offer price.

19. The method of claim 18, comprising the further step of providing notice to each member that placed an order which has been matched that such order has been matched.

20. The method of claim 19, wherein said other terms for such contract include a provision specifying, for the new contract, the number of business days later than the final settlement date of the original matched contract, for such new contract'"'"'s final settlement date.

21. The method of claim 19, comprising the further step of causing a new contract to be entered into in response to receiving instructions from at least one purchaser or seller that placed an order which has been matched, that such original matched contract be extinguished and replaced with a new contract, with a later final settlement date than the final settlement date of said original matched contract.

22. The method of claim 21, wherein said new contract shall have a final settlement date that is a specified number of business days after the final settlement date of said original matched contract.

23. The method of claim 19, wherein the settling occurs via private bilateral final settlement comprising the further steps of

receiving instructions from at least one purchaser or seller that placed an order which has been matched indicating that such purchaser or seller has elected to engage in private bilateral final settlement of such matched contract,

receiving prior to the final settlement date said purchaser or seller'"'"'s request to be given access to identity and contract position information of certain other market participants,

providing an interface for receiving instructions from said purchaser or seller indicating that such purchaser or seller desires such contract to be settled via such private bilateral final settlement with an other market participant and an identification of such other market participant,

providing an interface for displaying each such contract identified for direct bilateral final settlement, and

causing the final settlement of said contract external to the clearing facility.

24. The method of claim 23, comprising the further step of determining whether said one purchaser or seller meets qualifications to engage in private bilateral final settlement.

25. A system for operating an electronic exchange to provide a marketplace for the trading and settling of currency futures contracts comprising:

a database having at least one series of at least more than one currency futures contracts for the purchase of a particular currency and sale of another particular currency, wherein each such contract is comprised of

a monetary amount that is denominated in one of said two particular currencies, wherein said monetary amount is the same for each such contract in the series,

an initial listing date, wherein for each such contract in the series other than the first such contract in the series, said initial listing date is a common fixed number of at least one but not more than five business days following the initial listing date of the immediately prior contract in the series,

a final settlement date that is subsequent to said initial listing date, and

other terms for trading said currencies, and

an interface for listing information concerning each such contract.

26. The system of claim 25, wherein said monetary amount is ten thousand or less.

27. The system of claim 25, wherein said information concerning each said currency futures contract listed via said interface comprises information from among the set including an identifier for such contract, such contract'"'"'s last bid price, such contract'"'"'s last offered price and such contract'"'"'s executed transaction price.

28. The system of claim 25, wherein said other terms for such contract include a provision whereby such contract can be indicated as elected by a purchaser or seller of such contract to be, on or prior to such contract'"'"'s final settlement date, extinguished automatically and replaced with a new contract with a later final settlement date than said contract.

29. The system of claim 25, further comprising input means for receiving for each such contract purchaser or seller orders to purchase a quantity of such contracts at a specified bid price and/or orders to sell a quantity of such contracts at a specified offer price.

30. The system of claim 29, further comprising means for matching an order to purchase a quantity of a specified contract at a specified bid price with an order to sell a quantity of the same specified contract at a specified offer price.

31. The system of claim 30, further comprising notification means for notifying each purchaser or seller that placed an order which has been matched that such order has been matched.

32. The system of claim 31, wherein said other terms for such contract include a provision specifying, for the new contract, the number of business days later than the final settlement date of the original matched contract, for such new contract'"'"'s final settlement date.

33. The system of claim 30, further comprising means for causing a new contract to be entered into in response to receiving instructions from at least one purchaser or seller that placed an order which has been matched, that such original matched contract be extinguished and replaced with a new contract, with a later final settlement date than the final settlement date of said original matched contract.

34. The system of claim 33, wherein said new contract shall have a final settlement date that is a specified number of business days after the final settlement date of said original matched contract.

35. The system of claim 30, further comprising means for effecting private bilateral final settlement of a matched contract comprising the steps of

receiving instructions from at least one purchaser or seller that placed an order which has been matched indicating that such purchaser or seller has elected to engage in private bilateral final settlement of such matched contract,

receiving prior to the final settlement date said purchaser or seller'"'"'s request to be given access to identity and contract position information of certain other market participants,

providing an interface for receiving instructions from said purchaser or seller indicating that such purchaser or seller desires such contract to be settled via such private bilateral final settlement with an other market participant and an identification of such other market participant,

providing an interface for displaying each such contract identified for direct bilateral final settlement, and

causing the final settlement of said contract external to the clearing facility.

36. The system of claim 35, further comprising determining whether said one purchaser or seller meets qualifications to engage in private bilateral final settlement.

37. The system of claim 25, further comprising a clearing facility for novating a matched contract such that said clearing facility becomes party to a new contract with the purchaser and seller.