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SYSTEM AND METHOD FOR AUTOMATED COMMODITIES TRANSACTIONS INCLUDING AN AUTOMATIC HEDGING FUNCTION

  • US 20080301034A1
  • Filed: 06/06/2008
  • Published: 12/04/2008
  • Est. Priority Date: 10/18/2000
  • Status: Active Grant
First Claim
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1. A method for executing a commodities transaction on a net market system, said method comprising:

  • (a) receiving from a seller client terminal an offer from a seller to sell a commodity, the offer including an available quantity and an asking price for the commodity;

    (b) receiving from a plurality of buyer client terminals a respective plurality of bids from a respective plurality of buyers to buy the commodity, each bid including for each buyer a buyer-specific basis and a desired quantity for the commodity;

    (c) receiving from a commodities exchange an updated exchange price for the commodity;

    (d) modifying each bid in the plurality of bids to include a buyer-specific flat price, wherein the buyer-specific flat price is calculated by adding the buyer-specific basis for said each bid to the updated exchange price;

    (e) storing the offer, the plurality of bids and the updated exchange price in a database associated with the net market system;

    (f) if the buyer-specific flat price in a bid for a particular buyer is not less than the asking price for the seller, then attempting on behalf of the particular buyer to sell, through the commodities exchange, a futures contract for the commodity at the updated exchange price;

    (g) if the attempt to sell the futures contract succeeds, generating a contract between the seller and the particular buyer, whereby the seller is obligated to sell the available quantity of the commodity to the particular buyer for the asking price; and

    (h) iteratively repeating above steps (c) through (g) automatically without intervention from the seller or the particular buyer until (1) the contract is generated, or (2) the offer is canceled by the seller.

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