Fractional Forward Contracts

• US 20080208728A1
• Filed: 10/07/2005
• Published: 08/28/2008
• Est. Priority Date: 10/08/2004
• Status: Abandoned Application

• Current Assignee: Regents of the University of California (University of California)
• Original Assignee: Regents of the University of California (University of California)
• Inventors: Sugihara, George
• Application Number:
  US11/576,870
• Publication Number:
  US 20080208728A1
• 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

A financial instrument, called a fractional forward contract, and a way of using it to apportion risk between parties (100 and 170) contracting to buy (160) and sell (110) a commodity at a future date by providing for parties (100 and 170) to buy (160) and sell (110) a specified fraction of a commodity that the supplier (100) has in his inventory on a specific date, rather than a specified quantity.

Claims

1. A fractional forward contract for conducting trading of a commodity, comprising an agreement that specifies:

a unit of a commodity,

an inventory of the commodity, and an upper bound of the inventory, having a size specified in the unit,

a fraction of the inventory, expressed in the unit,

a contract period, over which the inventory will be determined,

a settling date, and

a price per unit, on the settling date, for the fraction of the inventory.

2. The contract of claim 1, further comprising a price for entering into the contract.

3. The contract of claim 1, wherein the commodity is an individual transferable quota.

4. The contract of claim 1, wherein the commodity comprises agricultural products.

5. The contract of claim 1, wherein the commodity comprises seafood selected from the group consisting of fish, crustaceans, molluscs, and echinoderms.

18. The contract of claim 1, wherein the commodity comprises manufactured goods.

19. The contract of claim 1, wherein the commodity comprises a petroleum product selected from the group consisting of oil and natural gas.

20. The contract of claim 1, wherein the commodity comprises a semiconductor chip.

6-17. -17. (canceled)

21. A method for conducting trading of a commodity, comprising:

specifying a plurality of trading parameters comprising;

a unit of the commodity,

an inventory of the commodity, and an upper bound of the inventory, having a size specified in the unit,

a fraction of the inventory, expressed in the unit,

a contract period, over which the inventory will be determined,

a settling date, and

a price per unit, on the settling date, for the fraction of the inventory;

wherein each of the specified plurality of trading parameters is incorporated into a contract for trading the commodity.

22. The method of claim 21, further comprising specifying a price for entering into the agreement.

23. The method of claim 21, wherein the commodity is an individual transferable quota.

24. The method of claim 21, wherein the commodity comprises agricultural products.

25. The method of claim 21, wherein the commodity is seafood selected from the group consisting of fish, crustaceans, molluscs, and echinoderms.

40. The method of claim 21, wherein the commodity comprises manufactured goods.

41. The method of claim 21, wherein the commodity comprises a petroleum product selected from the group consisting of oil and natural gas.

42. The method of claim 21, wherein the commodity comprises a semiconductor chip.

26-39. -39. (canceled)

43. A computer program for trading fractional forward contracts, the program comprising:

a plurality of instructions downloaded into and executed by a computer processor to;

(a) receive offering information comprising;

(i) a unit of a commodity,

(ii) an inventory of the commodity, and an upper bound of the inventory, having a size specified in the unit,

(iii) a fraction of the inventory, expressed in the unit,

(iv) a contract period, over which the size of the inventory will be determined,

(v) a settling date, and

(vi) a price per unit, on the settling date, for the fraction of the inventory,

(b) enter the offering information into a database,

(c) display the offering information to a purchaser,

(d) receive purchasing information relating to a purchase by the purchaser,

(e) update the database to reflect the purchase and final terms of the purchase; and

(f) generate a report summarizing the offering information and final terms of the purchase.

44. A computer-readable medium storing a computer program for trading fractional forward contracts, the program comprising:

a plurality of instructions downloaded into and executed by a computer processor to;

(a) receive offering information relating to a fractional forward contract, the information comprising;

(i) a unit of a commodity,

(ii) an inventory of the commodity, and an upper bound of the inventory, having a size specified in the unit,

(iii) a fraction of the inventory, expressed in the unit,

(iv) a contract period, over which the size of the inventory will be determined,

(v) a settling date, and

(vi) a price per unit at which, on the settling date, the fraction of the inventory will be sold,

(b) enter the offering information into a database,

(c) display the offering information to a purchaser,

(d) receive purchasing information relating to a purchase by the purchaser,

(e) update the database to reflect the purchase and final terms of the purchase; and

(f) generate a report summarizing the offering information and final terms of the purchase.

45. A system for trading fractional forward contracts on a commodity, comprising:

(a) a first computer connected to a computer network and having a database for storing contract terms relating to a fractional forward contract, the information comprising;

(i) a unit of the commodity,

(ii) an inventory of the commodity, and an upper bound of the inventory, having a size specified in the unit,

(iii) a fraction of the inventory, expressed in the unit,

(iv) a contract period, over which the size of the inventory will be determined,

(v) a settling date, and

(vi) a price per unit, on the settling date, for the fraction of the inventory, and

(b) a second computer connected to the computer network and having a user interface for generating a viewable report comprising the contract terms and communicating acceptance of the fractional forward contract.