Option computation for tangible depreciating items

• US 8,090,642 B1
• Filed: 02/16/2007
• Issued: 01/03/2012
• Est. Priority Date: 02/17/2006
• Status: Active Grant

• Current Assignee: SquareTrade, Inc. (Allstate Corporation)
• Original Assignee: TechForward, Inc. (Allstate Corporation)
• Inventors: Van Doren, Jade, Lebovitz, Marc Adam
• Primary Examiner(s): Patel, Jagdish
• Assistant Examiner(s): Poe, Kevin
• Application Number:
  US11/707,361
• Time in Patent Office: 1,782 Days
• Field of Search: 705/37
• 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 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A system for computing option prices for tangible depreciating items is described. Describing information of the tangible depreciating item is determined. Historical sales data of sold tangible depreciating items from marketplaces are collected. A present resale value of the tangible depreciating item is computed based on the historical sales data. A depreciation rate of sold tangible depreciating items having similar attributes as the tangible depreciating item is extrapolated from the historical sales data. A predicted resale value of the tangible depreciating item is computed based on the computed present resale value and on the extrapolated depreciation rate.

Claims

1. A method for computing a put option on a purchased tangible depreciating item, comprising:

computing at a server, a one-time put option fee received from an owner of the purchased tangible depreciating item, based on characteristics of the purchased tangible depreciating item, in exchange for granting the owner of the purchased tangible depreciating item the right to exchange the purchased tangible depreciating item over a predetermined period of time for the one-time put option fee,

wherein the one-time put option fee is based on a predicted future resale value of the purchased tangible depreciating item, the one-time put option fee being a one-time purchase price for the put option on the purchased tangible depreciating item.

2. The method of claim 1 further comprising:

receiving the purchased tangible depreciating item at the date of exercise;

adjusting the predetermined amount based on the condition of the purchased tangible depreciating item at the date of exercise; and

disbursing an amount based on the adjusted predetermined amount at the date of exercise.

3. The method of claim 1, further comprises determining the predicted future resale value of the purchased tangible depreciating item, determining the predicted future resale value of the purchased tangible depreciating item further comprising:

acquiring historical sales data of sold tangible depreciating items;

determining a present resale value of the purchased tangible depreciating item based on the historical sales data;

extrapolating a depreciation rate, using relative values, of sold tangible depreciating items having similar characteristics as the purchased tangible depreciating item; and

computing the predicted value of the purchased tangible depreciating item based on the present resale value and the depreciation rate.

4. The method of claim 3 wherein the historical sales data further comprises data from auction marketplaces, data from used goods marketplaces, or data from new goods marketplaces.

5. The method of claim 1 wherein the purchaser is required to exchange the purchased tangible depreciating item at the future date for the predetermined amount.

6. A computer-implemented method comprising:

determining a plurality of attributes of a purchased tangible depreciating item at a server;

collecting historical sales data of sold tangible depreciating items in storage device coupled to the server;

determining a present resale value of the purchased tangible depreciating item based on the historical sales data and attributes of the purchased tangible depreciating item;

extrapolating a depreciation rate of sold tangible depreciating items having similar attributes as the purchased tangible depreciating item;

computing a future resale value of the purchased tangible depreciating item based on the present resale value and on the depreciation rate;

computing a one-time purchase price for an option on the purchased tangible depreciating item;

computing an exercise price for the purchased tangible depreciating item based on the predicted future resale value of the purchased tangible depreciating item; and

adjusting the exercise price based on the condition of the purchased tangible depreciating item at the time of exercise of the option.

7. The method of claim 6 further comprising:

incorporating customer return behavior data in computing the purchase price and exercise price at the time of the option purchase.

8. The method of claim 6 wherein historical sales data comprise attributes of sold tangible depreciating items, corresponding sale prices, or corresponding sale dates.

9. The method of claim 6 wherein the plurality of attributes comprise a type of the purchased tangible depreciating item, a model of the purchased tangible depreciating item, or a configuration of the purchased tangible depreciating item.

10. The method of claim 6 wherein extrapolating the depreciation rate incorporates market intelligence outside of the historical sales data.

13. The method of claim 10 wherein historical sales data comprises attributes of sold tangible depreciating items, corresponding sale prices, or corresponding sale dates.

14. The method of claim 10 wherein the plurality of attributes comprise a type of the purchased tangible depreciating item, a model of the purchased tangible depreciating item, or a configuration of the purchased tangible depreciating item.

11. An article of manufacture comprising:

a machine-accessible storage medium including data that, when accessed by a machine, cause the machine to perform a method comprising;

determining a plurality of attributes of a purchased tangible depreciating item;

collecting historical sales data of sold tangible depreciating items;

determining a present resale value of the purchased tangible depreciating item based on the historical sales data and attributes of the purchased tangible depreciating item;

extrapolating a depreciation rate of sold tangible depreciating items having similar attributes as the purchased tangible depreciating item;

computing a future resale value of the purchased tangible depreciating item based on the present resale value and on the depreciation rate;

computing a one-time purchase price for an option on the purchased tangible depreciating item;

computing an exercise price for the purchased tangible depreciating item based on the predicted future resale value of the purchased tangible depreciating item; and

adjusting the exercise price based on the condition of the purchased tangible depreciating item at the time of exercise of the option,

wherein the purchased tangible depreciating item comprises a consumer electronic device.

12. The method of claim 11 further comprising:

incorporating customer return behavior data in computing the purchase price and exercise price at the time of option purchase.

15. An apparatus comprising:

a server

to determine a plurality of attributes of a purchased tangible depreciating item,

to collect historical sales data of sold tangible depreciating items,

to determine a present resale value of the purchased tangible depreciating item based on the historical sales data and attributes of the purchased tangible depreciating item,

to extrapolate a depreciation rate of sold tangible depreciating items having similar attributes as the purchased tangible depreciating item,

to compute a future resale value of the purchased tangible depreciating item based on the present resale value and on the depreciation rate,

to compute a one-time purchase price for an option on the purchased tangible depreciating item,

to compute an exercise price for the purchased tangible depreciating item based on the predicted future resale value of the purchased tangible depreciating item, and

to adjust the exercise price based on the condition of the tangible depreciating item at the time of exercise of the option, wherein the purchased tangible depreciating item comprises a consumer electronic device.

16. The apparatus of claim 15 wherein the server is to further incorporate customer return behavior data in computing the purchase price and exercise price at the time of option purchase.

17. The apparatus of claim 15 wherein historical sales data comprises attributes of sold tangible depreciating items, corresponding sale prices, or corresponding sale dates.

18. The apparatus of claim 15 wherein the plurality of attributes comprises a type of the purchased tangible depreciating item, model of the purchased tangible depreciating item, or a configuration of the purchased tangible depreciating item.