System and method for electronic trading and delivery of a commoditized product

• US 7,584,135 B1
• Filed: 05/17/2001
• Issued: 09/01/2009
• Est. Priority Date: 05/17/2000
• Status: Active Grant

• Current Assignee: QuinMar LLC
• Original Assignee: Bullion Direct, Inc.
• Inventors: Katyal, Vivek, McAllister, Charles Hadley
• Primary Examiner(s): Poinvil; Frantzy
• Assistant Examiner(s): GRAHAM, CLEMENT B
• Application Number:
  US09/860,134
• Time in Patent Office: 3,029 Days
• Field of Search: 382/139, 382/151, 705 35- 38, 705/34, 704/354, 707/200, 235/472
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

The present invention provides a system and method for trading of a commoditized product through a distributed network of computers, and for delivering the commoditized products after the trade. The system includes an order matching routine, a payment routine, a product qualification routine, and a distribution routine. The invention provides for secure electronic trading of a commoditized product through a hub centric platform that provides for a real order exchange in a real time environment, allows individual buyers and sellers to remain anonymous to each other, eliminates size or volume as a means of discrimination for transaction, and maximizes distribution efficiency.

Claims

1. A method for facilitating trading of a commoditized product comprising

electronically receiving at least one sell order from at least one seller to sell a commoditized product;

electronically receiving at least one buy order from at least one buyer to buy a commoditized product;

electronically matching the at least one sell order with the at least one buy order;

receiving commoditized product from the at least one seller;

physically qualifying the commoditized product after it is received from the at least one seller and before it is distributed to the at least one buyer;

distributing a seller payment to the at least one seller;

receiving a buyer payment from the at least one buyer; and

distributing commoditized product to the at least one buyer.

2. The method of claim 1 wherein the at least one buyer comprises at least two buyers, and the at least one seller comprises one seller.

3. The method of claim 1 wherein the at least one seller comprises at least two sellers and the at least one buyer comprises one buyer.

4. The method of claim 1 wherein distributing commoditized product to the at least one buyer comprises one or more of accumulating the commoditized product in a portfolio account for the at least one buyer, or shipping commoditized product to the at least one buyer.

5. The method of claim 1 wherein distributing a seller payment to the at least one seller comprises a prior pay service.

6. The method of claim 5 wherein the prior pay service comprises

sending a payment to the at least one seller, wherein the payment is subject to a hold;

and

releasing the hold on the payment when the commoditized product is received from the at least one seller and physically qualified.

7. The method of claim 6, wherein physically qualifying the commoditized product received from the at least one seller comprises determining whether the commoditized product received from the at least one seller matches the at least one sell order.

8. The method of claim 6, wherein physically qualifying the commoditized product received from the at least one seller comprises

determining that the commoditized product received from the at least one seller does not match the at least one sell order;

temporarily maintaining the hold of funds on the payment document;

notifying the at least one seller that the commoditized product does not match the at least one sell order;

receiving from the at least one seller one or more of additional commoditized product, information, and/or agreement to change the seller payment, such that the commoditized product received from the at least one seller is physically qualified.

9. The method of claim 1 wherein physically qualifying the commoditized product received from the at least one seller comprises authentication of commoditized product, inspection of commoditized product, verification of commoditized product, or any combination thereof.

10. The method of claim 1, wherein the commoditized product comprises any product having a size, weight, color or quality specification.

11. The method of claim 1, wherein the commoditized product comprises precious metal.

12. The method of claim 1 further comprising qualifying the at least one buyer before matching the at least one sell order with the at least one buy order.

13. The method of claim 12 wherein qualifying the at least one buyer comprises any one or more of obtaining information about the at least one buyer, verifying information provided by the at least one buyer, performing a credit check on the at least one buyer, and/or receiving a payment from the at least one buyer.

14. The method of claim 1 further comprising qualifying the at least one seller before electronically matching the at least one sell order with the at least one buy order.

15. The method of claim 14 wherein qualifying the at least one seller comprises any one or more of obtaining information about the at least one seller, verifying information provided by the at least one seller, performing a credit check on the at least one seller, and/or receiving commoditized product from the at least one seller.

16. The method of claim 1 wherein the at least one buy order is not limited by the size, volume, or amount of commoditized product ordered.

17. The method of claim 1 wherein the at least one sell order is not limited by the size, volume, or amount of commoditized product ordered.

18. The method of claim 1 wherein the at least one seller and the at least one buyer remain anonymous to one another.

19. The method of claim 1 wherein the at least one seller and the at least one buyer do not communicate.

20. The method of claim 1 wherein multiple buy orders can fulfill one sell order.

21. The method of claim 1 wherein multiple sell orders can fulfill one buy order.

22. The method of claim 1 additionally comprising providing real-time information regarding the market for the commoditized product.

23. The method of claim 1 wherein receiving commoditized product from the at least one seller comprises one or more of physically receiving commoditized product, or drawing commoditized product from at least one portfolio account without regard to its physical location.

24. The method of claim 1 wherein distributing a seller payment comprises one or more of distributing a payment instrument to the seller, or adjusting a seller'"'"'s customer account.

25. The method of claim 1 wherein receiving a buyer payment comprises one or more of receiving a payment instrument, or adjusting a buyer'"'"'s customer account.

26. A platform for facilitating trading a commoditized product comprising

means for electronically receiving at least one sell order from at least one seller to sell a commoditized product;

means for electronically receiving at least one buy order from at least one buyer to buy a commoditized product;

means for electronically matching the at least one sell order with the at least one buy order;

means for receiving commoditized product from the at least one seller;

means for physically qualifying commoditized product after it is received from the at least one seller and before it is distributed to the at least one buyer;

means for receiving a buyer payment from the at least one buyer;

means for distributing commoditized product to the at least one buyer;

means for distributing a seller payment to the at least one seller.