Method for creating and pricing options

• US 20070143200A1
• Filed: 02/14/2007
• Published: 06/21/2007
• Est. Priority Date: 11/21/2000
• Status: Active Grant

• Current Assignee: Jonathan Buchanan, Richard Olsen, Ulrich Muller
• Original Assignee: Jonathan Buchanan, Richard Olsen, Ulrich Muller
• Inventors: Olsen, Richard, Muller, Ulrich, Buchanan, Jonathan
• Granted Patent: US 8,799,132 B2
• Time in Patent Office: Days
• US Class Current: 705/36.R
• 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
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A preferred embodiment of the subject invention is directed to creation and pricing of an option related to a target zone in a time-price plot. If the price curve against time enters this zone (in a preferred embodiment, a “box”), a fixed amount of money is paid to the owner of the option; if the curve misses the box, there is no payout to the option owner, who also forfeits the premium paid for the option. Software is described that enables an option buyer to easily create and set the parameters of such an option, that computes a premium for the option, and that manages payout and other functions related to the option. The above-described embodiment is a buy-to-hit option. Other embodiments are directed to sell-to-hit, buy-to-miss, and sell-to-miss options.

Claims

1. A method of option creation for an asset that has a value that varies over time, comprising the steps of:

(a) viewing on a computer screen connected to a computer a graphical display that shows the values of the asset over time;

(b) drawing a zone on the graphical display, wherein said zone is located in an area of the display that corresponds to future potential asset values, and wherein said zone represents a proposed option on the asset; and

(c) in response to a displayed win ratio, entering preferred settings for said option.

2. The method of claim 1, wherein said preferred settings comprise a desired price to be paid for said option.

3. The method of claim 1, wherein said preferred settings comprise a desired payout amount for said option.

4. The method of claim 1, wherein said zone is rectangular.

5. The method of claim 1, wherein said graphical display comprises a time-price curve.

6. The method of claim 1, wherein said asset is a currency.

7. A method of option creation and pricing for an asset that has a value that varies over time, comprising the steps of:

(a) receiving data representing values of the asset over time;

(b) storing said data in a computer-readable medium;

(c) transmitting data representing the values of the asset over time to a remotely located computer;

(d) receiving from said remotely located computer values representing parameters of a proposed option on the asset;

(e) calculating a win ratio for the proposed option; and

(f) transmitting said win ratio to said remotely located computer.

8. The method of claim 7, wherein said proposed option is a box option.

9. The method of claim 8, wherein said parameters of a proposed option comprise a start time, an end time, an upper limit, and a lower limit.

10. Computer software for generating a graphical display of an option for an asset that has a value that varies over time, comprising:

(a) software for receiving and storing data representing values of an asset over time;

(b) software for displaying said values on a computer screen;

(c) software for drawing on said computer screen at least one zone representing the option; and

(d) software for transmitting parameters of said zone(s).

11. The method of claim 10, further comprising software for receiving and displaying a win ratio.

12. The method of claim 11, further comprising software for using a win ratio to calculate and display an option price.

13. The method of claim 11, further comprising software for using a win ratio to calculate and display a payout amount.

14. The method of claim 10, wherein said zones are rectangular.

15-19. -19. (canceled)