System and methods for pricing and allocation of commodities or securities

• US 7,647,270 B2
• Filed: 06/30/2006
• Issued: 01/12/2010
• Est. Priority Date: 03/08/2000
• Status: Active Grant

• Current Assignee: W.R. Hambrecht + Co., Inc. (WR Hambrecht + Co. LLC)
• Original Assignee: WR Hambrecht + Co. LLC
• Inventors: Hansson, Othar, Evelyn, Michael H., Goldberg, Robert S., Gerrish, Cliff M., Hayes, Jordan M., Ocheret, Charles A.
• Primary Examiner(s): Trammell; James P
• Assistant Examiner(s): GREENE, DANIEL LAWSON
• Application Number:
  US11/479,134
• Publication Number:
  US 20070083457A1
• Time in Patent Office: 1,292 Days
• Field of Search: 705 35- 37, 705/27, 705/80
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

Systems and methods for conducting an auction of securities on the Web. The system and methods provide a bid mechanism whereby bidders are rewarded for priority of anonymously revealing their bids and provide an allocation of the securities which allows winning bidders to pay a single market-clearing price that sells out the securities. In addition, the systems and methods allow all participants to monitor the auction in real time.

Claims

1. A computerized method for conducting an auction of securities to auction participants, the method comprising:

providing a bid mechanism in a computer system for receiving a plurality of competitive bids each having;

i. an initial bid component, having an initial quantity and an initial price, and having an associated bid time stamp, and

ii. a final bid component within a predetermined range of the initial bid component, having a final quantity and final price, and having the associated bid time stamp of the initial bid component, wherein the predetermined range is set for the auction participants;

using the computer system to provide, based on the final bid components and associated bid time stamps, an allocation of the securities; and

using the computer system to provide monitoring of the auction as it occurs.

2. A computerized method according to claim 1, wherein the securities are allocated based on a single clearing price that sells all of the securities.

3. A computerized method according to claim 2, wherein bids at the clearing price are awarded pro-rata.

4. A computerized method according to claim 1, wherein the securities are allocated at a single clearing price that sells all of the securities.

5. A computerized method according to claim 1, wherein the securities are allocated at a single clearing price that sells all of the securities, adjusted by an increment determined by at least one of a security issuer and an auction adviser.

6. A computerized method according to claim 1, wherein the auction participants are limited to investors registered with a designated underwriter.

7. A computerized method according to claim 1, wherein if the final bid component is not within a predetermined range of the initial bid component, then the bid receives a new bid time stamp.

8. A computerized method according to claim 1, wherein the final bid component is the initial bid component by default.

9. An apparatus for conducting an auction of securities to auction participants, the apparatus comprising:

a computer system, connected to a computer network whereby the auction participants at remote terminals can communicate with the computer system;

a bid mechanism means coupled to the computer system for receiving a plurality of competitive bids each having;

i. an initial bid component, having an initial quantity and an initial price, and having an associated bid time stamp, and

ii. a final bid component within a predetermined range of the initial bid component, having a final quantity and final price, and having the associated bid time stamp of the initial bid component, wherein the predetermined range is set for the auction participants;

an allocation means coupled to the bid mechanism means for allocation of the securities based on the final bid components and associated bid time stamps; and

a display means at the remote terminals, coupled to the computer system via the computer network for monitoring the auction as it occurs.

10. An apparatus according to claim 9, wherein the securities are allocated based on a single clearing price that sells all of the securities.

11. An apparatus according to claim 10, wherein bids at the clearing price are awarded pro-rata.

12. An apparatus according to claim 9, wherein the securities are allocated at a single clearing price that sells all of the securities.

13. An apparatus according to claim 9, wherein the securities are allocated at a single clearing price that sells all of the securities, adjusted by an increment determined by at least one of a security issuer and an auction adviser.

14. An apparatus according to claim 9, wherein the computer system limits the auction participants to investors registered with a designated underwriter.

15. An apparatus according to claim 9, wherein if the final bid component is not within a predetermined range of the initial bid component, then the bid receives a new bid time stamp.

16. An apparatus according to claim 9, wherein the final bid component is the initial bid component by default.

17. A computer program product stored on a computer useable medium comprising computer code segments configured to:

conduct an auction of securities on a computer network to auction participants;

provide a bid mechanism for receiving a plurality of competitive bids each having;

i. an initial bid component, having an initial quantity and an initial price, and having an associated bid time stamp, and

ii. a final bid component within a predetermined range of the initial bid component, having a final quantity and final price, and having the associated bid time stamp of the initial bid component, wherein the predetermined range is set for the auction participants;

provide an allocation of the securities based on the final bid components and associated bid time stamps; and

provide a system for monitoring the auction as it occurs.