TRADING SYSTEM AND METHOD FOR INSTITUTIONAL ATHLETIC AND EDUCATION PROGRAMS

• US 20080147535A1
• Filed: 02/25/2008
• Published: 06/19/2008
• Est. Priority Date: 06/05/2006
• Status: Active Grant

• Current Assignee: John D Reed, Kevin P. Braig
• Original Assignee: John D Reed, Kevin P. Braig
• Inventors: Reed, John D., Braig, Kevin P.
• Granted Patent: US 8,160,951 B2
• 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 50/20 Education

Abstract

A device and method for trading commodity options and futures related to an educational institution'"'"'s non-rival athletic program to manage risks associated with producing collegiate athletic programs. In one version, the underlying asset of the options and futures contracts is an athletic prospect'"'"'s obligation to participate in a non-rival athletic program at a particular institution in exchange for the opportunity for the athletic prospect to participate in academic and athletic programs within the institution. In a particular form, the underlying asset is a signed National Letter of Intent, a contract that obligates a prospect attending a particular institution to participate in that institution'"'"'s non-rival athletic program. Revenues generated by options and futures contracts traded according to the device and method of the present invention can be used to further the institution'"'"'s educational and athletic missions.

Claims

1. A method of trading a collegiate derivative contract, said method comprising:

configuring an exchange to execute said trading of said contract based on said contract attaining its derivative status through an underlying agreement between a collegiate institution and a student that obligates said collegiate institution to provide said student with an opportunity to participate in an athletic program at said collegiate institution in return for said student to provide said collegiate institution with his or her participation in said athletic program; and

enabling said trading of said contract on said exchange between a seller of said contract and a buyer of said contract.

2. The method of claim 1, wherein said underlying agreement is a Letter of Intent.

3. The method of claim 2, further comprising granting an option to purchase said contract to at least one of said student and said collegiate institution upon said student and said collegiate institution entering into said Letter of Intent.

4. The method of claim 3, wherein said contract is available to at least one of said student and said collegiate institution at a fixed strike price.

5. The method of claim 1, wherein said facilitating a trade comprises matching a first trader'"'"'s buy order with a second trader'"'"'s sell order.

6. The method of claim 5, further comprising conducting at least one of a trade clearing and a trade settling.

7. The method of claim 1, further comprising collecting a transaction fee from at least one of said buyer and said seller.

8. The method of claim 7, further comprising transferring at least a portion of said transaction fee to at least one collegiate institution among those that are qualified to trade on said exchange by virtue of being a party to a signed Letter of Intent.

9. The method of claim 1, wherein said facilitating a trade comprises having said exchange taking a position opposite of a received buy or sell order.

10. The method of claim 1, wherein said contract is a futures contract.

11. The method of claim 1, wherein said exchange comprises an electronic exchange.

12. A device for electronic trading of a collegiate derivative contract that is offered on a trading exchange, where said contract attains its derivative status by being based upon an underlying commitment between a collegiate institution and at least one student where said at least one student participates in at least one intercollegiate sport offered by said collegiate institution in return for said collegiate institution providing at least a portion of the cost of attendance of said at least one student at said collegiate institution, said device comprising:

a data output configured to convey to a user trading information about said contract; and

a data input configured to receive a trading instruction from said user such that said user may, through said device, convey said trading instruction to said exchange to trade said contract.

13. The device of claim 12, wherein at least one of said data input and said data output comprises at least one of a computer, telephone or handheld wireless device.

14. The device of claim 13, wherein said handheld wireless device comprises at least one of a pager, PDA, cellular communication device or touch screen.

15. The device of claim 12, wherein said data input and said data output cooperate such that upon placement by a trader of an order to trade a college futures contract through said data input, said trader may perceive a status of said trade on said data output.

16. The device of claim 12, wherein said data output comprises a graphical user interface.

17. A computer program stored on a storage medium for use in an electronic trading exchange where a collegiate derivative contract can be traded among a plurality of remote traders within said exchange, said computer program when executed causes said exchange to perform the steps of:

receiving at least one of an offer to sell said collegiate derivative contract and a bid to buy said collegiate derivative contract;

verifying that said collegiate derivative contract is qualified to be traded through identification of a particular collegiate institution on a database, said identification being evidence that said particular collegiate institution has entered into a mutually-agreed upon obligation between said particular collegiate institution and at least one student such that said at least one student participates in at least one intercollegiate sport offered by said particular collegiate institution in return for said particular collegiate institution providing at least a portion of said cost of said at least one student to attend said particular collegiate institution;

transmitting information pertaining to said at least one of said offer to sell and said bid to buy to a buyer or seller, respectively; and

matching said at least one of said bid to buy and said offer to sell such that a trade of said collegiate derivative contract occurs.

18. The computer program of claim 17, further comprising causing said trading exchange to notify said buyer and said seller that said trade of said collegiate derivative contract has been executed.

19. The computer program of claim 17, wherein said collegiate derivative contract is a futures contract.

20. The computer program of claim 17, further comprising granting an option to at least one of said student and said particular collegiate institution that enters into said mutually-agreed upon obligation so that upon attainment of said option, at least one of said student and said particular collegiate institution become qualified to purchase said collegiate derivative contract at a predetermined strike price.

21. The computer program of claim 17, further comprising notifying at least one of said buyer and said seller that said trade of said at least one collegiate derivative contract has been executed.

22. The computer program of claim 21, wherein said notifying comprises displaying said trade on a graphical user interface.