System and method for hedging against foreign exchange risk associated with securities transactions
First Claim
1. A method for hedging an investor against a currency risk associated with a purchase of a security having a value, said investor purchasing said security in a foreign currency and said investor desiring to receive proceeds from a sale of at least a portion of said security in a home currency, said foreign currency and said home currency having an exchange rate at the time of said purchase and an exchange rate at the time of said sale, said method comprising the steps of:
- receiving a request for hedging against said currency risk for a time period;
calculating a cost for hedging against said currency risk based on said foreign currency, said home currency, said exchange rate at the time of said purchase, said value and said time period;
providing the investor with said proceeds from said sale based on said exchange rate at the time of said sale if said exchange rate at the time of said sale is greater than the exchange rate at the time of said purchase; and
providing the investor with said proceeds from said sale based on said exchange rate at the time of said purchase if said exchange rate at the time of said purchase is greater than or equal to the exchange rate at the time of said sale, wherein at least one of said steps is performed by a computer.
3 Assignments
0 Petitions
Accused Products
Abstract
A method for hedging an investor against a currency risk associated with a purchase of a security having a value, the investor having purchased the security in a foreign currency and the investor desiring to receive the proceeds from a sale of the security in a home currency. The foreign currency and home currency have an exchange rate at the time of the purchase and an exchange rate at the time of the sale. The method includes the steps of receiving a request for hedging against the currency risk for a time period. Next, a cost is calculated for hedging against the currency risk based on the foreign currency, the home currency, the exchange rate at the time of the purchase, the value and the time period. Next, the investor is provided with the proceeds from the sale based on the exchange rate at the time of the sale if the exchange rate at the time of the sale is greater than the exchange rate at the time of the purchase. Finally, the investor is provided with the proceeds from the sale based on the exchange rate at the time of the purchase if the exchange rate at the time of the purchase is greater than or equal to the exchange rate at the time of the sale.
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Citations
13 Claims
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1. A method for hedging an investor against a currency risk associated with a purchase of a security having a value, said investor purchasing said security in a foreign currency and said investor desiring to receive proceeds from a sale of at least a portion of said security in a home currency, said foreign currency and said home currency having an exchange rate at the time of said purchase and an exchange rate at the time of said sale, said method comprising the steps of:
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receiving a request for hedging against said currency risk for a time period;
calculating a cost for hedging against said currency risk based on said foreign currency, said home currency, said exchange rate at the time of said purchase, said value and said time period;
providing the investor with said proceeds from said sale based on said exchange rate at the time of said sale if said exchange rate at the time of said sale is greater than the exchange rate at the time of said purchase; and
providing the investor with said proceeds from said sale based on said exchange rate at the time of said purchase if said exchange rate at the time of said purchase is greater than or equal to the exchange rate at the time of said sale, wherein at least one of said steps is performed by a computer. - View Dependent Claims (2, 3, 4, 5, 6)
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7. A system for hedging an investor against a currency risk associated with a purchase of a security having a value, said investor purchasing said security in a foreign currency and said investor desiring to receive proceeds from a sale of at least a portion of said security in a home currency, said foreign currency and said home currency having an exchange rate at the time of said purchase and an exchange rate at the time of said sale, said investor desiring to insure against said currency risk for a time period, the system comprising:
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a foreign exchange rate data source; and
a pricing engine, said pricing engine receiving said exchange rate at the time of said purchase and the exchange rate at the time of said sale from said foreign exchange rate data source, said pricing engine calculating a cost for hedging against said currency risk based on said foreign currency, said home currency, said exchange rate at the time of said purchase, said value and said time period;
wherein the investor is provided with said proceeds from said sale based on said exchange rate at the time of said sale if said exchange rate at the time of said sale is greater than the exchange rate at the time of said purchase and the investor is provided with said proceeds from said sale based on said exchange rate at the time of said purchase if said exchange rate at the time of said purchase is greater than or equal to the exchange rate at the time of said sale. - View Dependent Claims (8, 9, 10, 11, 12, 13)
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Specification