Methods and apparatus relating to the formulation and trading of investment contracts
First Claim
1. A system to enable the formulation of a multi-party investment contract, comprising:
- receiving means for electronically receiving from an ordering party contract data relating to at least one phenomenon, each said phenomenon having two possible future outcomes and a future time of maturity, said contract data including a view as to which of the two possible future outcomes will be the outcome at maturity and a consideration due to a counterparty at or after a time of matching, and for electronically receiving from at least one counterparty registering data including a view as to each of the two possible future outcomes; and
a data processor configured to electronically price a contract for said phenomenon from said contract data and said registering data, including;
applying at least one template of entitlement as a function of outcome to each counterparty'"'"'s view to give one or more individual counterparty prices each equal to said consideration, andapplying said ordering party view to each said template of entitlement to derive one or more implied entitlement valuations; and
electronically match a contract for said phenomenon from said contract data and registering data, including;
determining which counterparty will provide the best entitlement on maturity by comparing each implied entitlement valuation with said consideration, andmatching the contract with that counterparty having a template of entitlement for the best said comparison.
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Abstract
A data processing system to enable the formulation of multi-party investments contracts is disclosed. The system comprises input means by which an ordering party can input contract data relating to at least one phenomenon, the phenomenon having a range of future outcomes and a future time of maturity. The contract data further includes a set of probabilities of occurrence for each outcome in the range and a consideration due to a counterparty at or after the time of maturity. One or more counterparties can input registering data including a set of probabilities of occurrence for each outcome in the range. The system further includes a data processor that is operable to price and match a contract from the contract data and the registering data.
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Citations
10 Claims
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1. A system to enable the formulation of a multi-party investment contract, comprising:
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receiving means for electronically receiving from an ordering party contract data relating to at least one phenomenon, each said phenomenon having two possible future outcomes and a future time of maturity, said contract data including a view as to which of the two possible future outcomes will be the outcome at maturity and a consideration due to a counterparty at or after a time of matching, and for electronically receiving from at least one counterparty registering data including a view as to each of the two possible future outcomes; and a data processor configured to electronically price a contract for said phenomenon from said contract data and said registering data, including; applying at least one template of entitlement as a function of outcome to each counterparty'"'"'s view to give one or more individual counterparty prices each equal to said consideration, and applying said ordering party view to each said template of entitlement to derive one or more implied entitlement valuations; and electronically match a contract for said phenomenon from said contract data and registering data, including; determining which counterparty will provide the best entitlement on maturity by comparing each implied entitlement valuation with said consideration, and matching the contract with that counterparty having a template of entitlement for the best said comparison. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8)
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9. A data processing system to enable the formulation of potential multiparty investment contracts, the system comprising:
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receiving means for electronically receiving contract data relating to a least one phenomenon, each said phenomenon having a range of future outcomes and a future time of maturity, the contract data including a set of probabilities of occurrence for each outcome in said range and a consideration due to a counterparty at or after the time of matching, and for receiving electronically registering data including a set of probabilities of occurrence for each outcome in said range; and a data processor configured to electronically price a contract for a said phenomenon from said contract data and said registering data, including; applying at least one template of entitlement as a function of outcome to each counterparty'"'"'s set of probabilities to give one or more individual counterparty prices each equal to the ordering party'"'"'s consideration; and applying the ordering party set of probabilities to each said template of entitlement to derive an implied entitlement valuation.
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10. A data processing system to enable the formulation of potential multi-party investments contracts, the system comprising:
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receiving means for electronically receiving contract data relating to at least one phenomenon, each said phenomenon having a range of future outcomes and a future time of maturity, the contract data including a set of probabilities of occurrence for each outcome in said range and a consideration due to a counterparty at or after the time of matching, and for electronically receiving registering data including a set of probabilities of occurrence for each outcome in said range; and a data processor configurable to electronically price a contract for said phenomenon from said contract data and said registering data, including; dividing the consideration into components, and for each component;
applying at least one template of entitlement as a function of outcome to each counterparty'"'"'s set of probabilities to give one or more individual counterparty prices each equal to the ordering party'"'"'s component consideration; and
applying the ordering party set of probabilities to each said template of entitlement to derive an implied component entitlement valuation; andelectronically match said contract for said phenomenon from said contract data and said registering data, including; determining which counterparty will provide the best entitlement on maturity by comparing each implied component entitlement valuation with the consideration; and matching the contract with the counterparties having templates of entitlement for the best said component comparisons.
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Specification