SYSTEM AND METHOD FOR ENABLING HEDGING CUSTOMERS TO LOCK FORWARD POSITIONS WITH CUSTOMER-FRIENDLY PAYMENT OPTIONS

• US 20080306858A1
• Filed: 02/12/2008
• Published: 12/11/2008
• Est. Priority Date: 02/12/2007
• Status: Abandoned Application

• Current Assignee: Pricelock, Inc.
• Original Assignee: Pricelock, Inc.
• Inventors: Painter, Scott, Fell, Robert M., Bonsignore, Michael R., Magnuson, Gary A., Reed, Brian P.
• Application Number:
  US12/030,041
• Publication Number:
  US 20080306858A1
• 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

In some embodiments, a method includes providing a loan or line of credit (LOC) to a purchaser to financing the cost of purchasing a retail commodity price protection contract. A new financial instrument is created bundling the loan or LOC and the retail commodity price protection contract. The method also includes allowing the purchaser to draw on a trust (that may have been created with proceeds from the loan) to purchase the retail commodity. The retail commodity price protection contract may specify a forward position, which may be selected by the customer, associated with the retail commodity. According to the forward position specified in the retail commodity price protection contract, a price protection service provider provides price protection to the customer against variability in the price of the retail commodity. The loan or LOC may be provided by a financial institution or the price protection service provider.

Claims

1. A computer implemented method comprising:

enabling a price protection service provider to specify a forward position associated with a retail commodity in a retail commodity price protection contract;

enabling a customer to select a payment option from a plurality of payment options, wherein the plurality of payment options includes a loan wherein covers at least a portion of the cost of the retail commodity price protection contract; and

creating a financial instrument associated with the retail commodity price protection contract between the price protection service provider and the customer based on the payment option selected by the customer.

2. The method of claim 1, further comprising creating a trust with at least a portion of the proceeds of the loan.

3. The method of claim 2, further comprising creating a security interest in the trust for a lender of the loan.

4. The method of claim 3, wherein the lender is a financial institution other than the price protection service provider.

5. The method of claim 3, wherein the price protection service provider is the lender.

6. The method of claim 1, further comprising enabling the customer to select an action from the group consisting of rolling over an un-used portion of the price protection service, receiving a refund for the un-used portion of the price protection service, and novating the un-used portion of the price protection service.

7. The method of claim 1, wherein the customer is an individual consumer.

8. The method of claim 1, wherein the customer represents an entity.

9. The method of claim 1, further comprising determining whether to include the loan as one of the plurality of payment options, wherein the determining step comprises analyzing a consumption pattern of the retail commodity by the customer.

10. The method of claim 9, wherein the determining step further comprises determining whether the customer has a cash flow position affected by the price of the retail commodity.

11. The method of claim 9, wherein the determining step further comprises assessing a credit risk of the customer.

12. A computer readable medium carrying program instructions executable by a processor to:

enable a price protection service provider to specify a forward position associated with a retail commodity in a retail commodity price protection contract;

enable a customer to select a payment option from a plurality of payment options, wherein the plurality of payment options includes a loan wherein covers at least a portion of the cost of the retail commodity price protection contract; and

create a financial instrument associated with the retail commodity price protection contract between the price protection service provider and the customer based on the payment option selected by the customer.

13. The computer readable medium of claim 12, wherein the loan is serviced by a financial institution other than the price protection service provider.

14. The computer readable medium of claim 12, wherein the loan is serviced by the price protection service provider.

15. The computer readable medium of claim 12, wherein the program instructions are further executable by the processor to enable the customer to select an action from the group consisting of rolling over an un-used portion of the price protection service, receiving a refund for the un-used portion of the price protection service, and novating the un-used portion of the price protection service.

16. The computer readable medium of claim 12, wherein the program instructions are further executable by the processor to analyze a consumption pattern of the retail commodity by the customer.

17. The computer readable medium of claim 12, wherein the program instructions are further executable by the processor to assess a credit risk of the customer.

18. A system comprising:

a processor; and

a computer readable medium carrying program instructions executable by a processor to;

enable a price protection service provider to specify a forward position associated with a retail commodity in a retail commodity price protection contract;

enable a customer to select a payment option from a plurality of payment options, wherein the plurality of payment options includes a loan wherein covers at least a portion of the cost of the retail commodity price protection contract; and

create a financial instrument associated with the retail commodity price protection contract between the price protection service provider and the customer based on the payment option selected by the customer.

19. The system of claim 18, wherein the loan is serviced by a financial institution other than the price protection service provider.

20. The system of claim 18, wherein the loan is serviced by the price protection service provider.