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System and method for automated commodities transactions including an automatic hedging function

DC
  • US 7,742,979 B2
  • Filed: 06/06/2008
  • Issued: 06/22/2010
  • Est. Priority Date: 10/18/2000
  • Status: Expired due to Fees
First Claim
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1. A method for executing a commodities transaction on a net market system, said method comprising:

  • (a) receiving on the net market system an offer from a seller to sell a commodity, the offer including an available quantity and an asking price for the commodity;

    (b) receiving on the net market system a plurality of bids from a respective plurality of buyers to buy the commodity, each bid including for each buyer a buyer-specific basis and a desired quantity for the commodity;

    (c) receiving on the net market system an updated exchange price for the commodity from a commodities exchange;

    (d) modifying, by the net market system, each bid in the plurality of bids to include a buyer-specific flat price, wherein the net market system is preprogrammed to automatically calculate the buyer-specific flat price by adding the buyer-specific basis for said each bid to the updated exchange price;

    (e) storing, by the net market system, the offer, the plurality of bids and the updated exchange price in a database associated with the net market system;

    (f) comparing, by the net market system, the buyer-specific flat price in a bid received from a particular buyer to the asking price received from the seller;

    (g) determining, by the net market system, that the buyer-specific flat price in the bid for the particular buyer is not less than the asking price for the seller, and sending, by the net market system, an electronic request on behalf of the particular buyer to sell, through the commodities exchange, a futures contract for the commodity at the updated exchange price; and

    (h) after the futures contract is sold, sending, by the net market system, a communication to the seller indicating that the offer is accepted;

    (i) wherein the net market system is preprogrammed to carry out the above steps (c) through (h) automatically without intervention from the seller or the particular buyer.

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