System and method for automated commodities transactions including an automatic hedging function
DCFirst Claim
1. A method for executing a commodities transaction on a net market system, said method comprising:
- (a) receiving on the net market system bid information for a plurality of buyers of a commodity, the bid information including for each buyer in the plurality of buyers a buyer-specific basis for the commodity;
(b) storing the bid information on the net market system;
(c) repetitively receiving an updated commodity exchange price for the commodity and calculating for each buyer in the plurality of buyers a buyer-specific flat price based on the buyer-specific basis for said each buyer and said updated commodity exchange price;
(d) receiving an offer from a seller to sell an offered quantity of the commodity to at least one buyer in the plurality of buyers at the buyer-specific flat price for said at least one buyer;
(e) responsive to receiving the offer, attempting to secure a futures contract for the commodity on behalf of said at least one buyer based on the offer; and
(f) if the attempt to secure the futures contract succeeds, generating a contract between said at least one buyer and the seller based on the offer;
(g) wherein steps (c) through (f) are carried out automatically by the net market system without intervention from said at least one buyer.
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Abstract
An integrated virtual market is provided that facilitates communication between the producers of a given commodity and the parties wishing to purchase such commodities. This system provides real-time updated information about local pricing being offered by those purchasers. In addition, those producers can post offers that can automatically be accepted by purchasers and have contracts automatically generated. An important consideration from a purchaser'"'"'s prospective is minimizing the risk associated with making such transactions. Due to this, futures contracts are often obtained. The virtual market system of the present inventions automatically requests and obtains futures contracts to hedge the contracts being generated.
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Citations
29 Claims
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1. A method for executing a commodities transaction on a net market system, said method comprising:
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(a) receiving on the net market system bid information for a plurality of buyers of a commodity, the bid information including for each buyer in the plurality of buyers a buyer-specific basis for the commodity; (b) storing the bid information on the net market system; (c) repetitively receiving an updated commodity exchange price for the commodity and calculating for each buyer in the plurality of buyers a buyer-specific flat price based on the buyer-specific basis for said each buyer and said updated commodity exchange price; (d) receiving an offer from a seller to sell an offered quantity of the commodity to at least one buyer in the plurality of buyers at the buyer-specific flat price for said at least one buyer; (e) responsive to receiving the offer, attempting to secure a futures contract for the commodity on behalf of said at least one buyer based on the offer; and (f) if the attempt to secure the futures contract succeeds, generating a contract between said at least one buyer and the seller based on the offer; (g) wherein steps (c) through (f) are carried out automatically by the net market system without intervention from said at least one buyer. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15)
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16. A computer system for executing commodities transactions, comprising:
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(i) a server; (ii) a database associated with the server; and (iii) an application program executing on the server; (iv) wherein the application program is operable with the server to; (a) receive from a plurality of buyers bid information for a commodity, the bid information for each buyer in the plurality of buyers including a buyer-specific basis for the commodity; (b) store the bid information for said each buyer in the database; (c) repetitively receive an updated commodity exchange price for the commodity and calculate for said each buyer a buyer-specific flat price based on the buyer-specific basis for said each buyer and said updated commodity exchange price; (d) receive an offer from a seller to sell an offered quantity of the commodity to at least one buyer in said plurality of buyers at the buyer-specific flat price for said at least one buyer; (e) responsive to the offer, attempt to secure a futures contract for the commodity on behalf of said at least one buyer; and (f) if the attempt to secure the futures contract succeeds, generate a contract between said at least one buyer and the seller based on the offer; (g) wherein steps (c) through (f) are carried out automatically by the server operating under the control of the application program without intervention by said at least one buyer. - View Dependent Claims (17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29)
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Specification