System and method for the interactive trading of derivatives

• US 8,239,313 B2
• Filed: 08/02/2002
• Issued: 08/07/2012
• Est. Priority Date: 08/02/2001
• Status: Expired due to Fees

• Current Assignee: Liberty Peak Ventures, LLC (Dominion Harbor Enterprises, LLC)
• Original Assignee: American Express Travel Related Services Company, Inc. (American Express Company)
• Inventors: Jenkins, Jack, Pacheco, Robert, Laub, Ethan, Cramer, Cheryl, Lee, David M., Berkley, John
• Primary Examiner(s): Borlinghaus, Jason M
• Application Number:
  US10/211,928
• Publication Number:
  US 20030028476A1
• Time in Patent Office: 3,658 Days
• Field of Search: 705/26, 705/27, 705/36.R, 705/37
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

A method and system of trading derivatives of various items includes an electronic marketplace configured to accept requests to purchase derivatives and requests to sell derivatives. The marketplace is configured to match requests to purchase with requests to sell when certain criteria are similar to within predetermined limits. Available derivatives include futures contracts, put options, and call options. The derivatives allow one to purchase rights in an item prior to the actual delivery of the item. In addition, the derivatives may be traded to other parties. The use of such derivatives also enables entities to negotiate the prices for various goods and services that were previously not readily negotiable in the past.

Claims

1. A system for trading travel item derivatives comprising:

a network interface communicating with a non-transitory memory;

the memory communicating with a processor for trading the travel item derivatives; and

the processor, when executing a computer program, is configured to;

receive, by the processor, offers to purchase the travel item derivatives and offers to sell the travel item derivatives from users;

store and list, by the processor, the received offers to purchase and the offers to sell the travel item derivatives, such that the users may view the offers;

match, by the processor and based upon predetermined criteria, a first user'"'"'s offer to purchase the travel item derivative with a second user'"'"'s offer to sell the travel item derivative, wherein a first predetermined criterion is based on at least one of arrival time, departure time, arrival date, departure date, arrival city, and departure city, wherein the predetermined criteria comprises the first predetermined criterion, and wherein the match, by the processor, comprises matching based upon a predetermined amount of deviation in the at least one of arrival time, departure time, arrival date, departure date, arrival city, and departure city;

notify, by the processor, the first user and the second user of the matched offers to determine if a transaction is desired for the implicated travel item derivative;

process, by the processor, monetary accounts of the first user and the second user to facilitate a desired transaction; and

aid, by the processor and in response to the travel item derivative being exercised, the first user and the second user in settling their underlying obligations of the travel item derivative, wherein the travel item derivative comprises at least one of a futures contract, a put option, and a call option, and wherein the first predetermined criterion allows for a predetermined amount of deviation in the at least one of arrival time, departure time, arrival date, departure date, arrival city, and departure city.

2. The system of claim 1, wherein the processor is further configured to delete an offer to purchase or an offer to sell if the respective offer remains unmatched after a predetermined time period.

3. The system of claim 1, wherein the travel item derivative is a futures contract for an airline ticket and the second user is a supplier of airline tickets, and wherein the aid in settling the underlying obligations comprises purchasing the airline ticket from the second user and delivering the airline ticket to the first user.

4. A computer-based method of trading derivatives comprising:

creating, by a computer-hosted exchange for trading the derivatives, the derivatives of travel items available for trading on the computer-hosted exchange;

creating, by the computer-hosted exchange, requests to purchase derivatives of travel items available on the computer-hosted exchange;

matching, by the computer-hosted exchange, an available request to an available derivative if a travel item underlying the request and a travel item underlying the derivative are similar according to predetermined criteria;

generating, by the computer-hosted exchange, an order to purchase the matched derivative;

sending, by the computer-hosted exchange the order to a computer-hosted clearinghouse; and

deleting, by the computer-hosted exchange, unmatched requests and unmatched derivatives from the computer-hosted exchange,

wherein at least one of the predetermined criteria is based on at least one of arrival time, departure time, arrival date, departure date, arrival city, and departure city, wherein derivatives made available for trading on the computer-hosted exchange comprise at least one of futures contracts, put options, and call options, and wherein at least one of the predetermined criteria allows for a predetermined amount of deviation in the at least one of arrival time, departure time, arrival date, departure date, arrival city, and departure city.

5. The method of claim 4, wherein airplane tickets are the travel items underlying the available derivatives and the available requests.

6. The method of claim 4, wherein the order is cleared at the clearinghouse.

7. A system for trading derivatives comprising:

a network interface communicating with a non-transitory memory;

the memory communicating with a processor for trading derivatives; and

the processor, when executing a computer program, is configured to;

create, by the processor, the derivatives of travel items available for trading;

create, by the processor, requests to purchase derivatives of travel items available on the exchange;

match, by the processor, an available request to an available derivative, if a travel item underlying the request and a travel item underlying the derivative are similar according to predetermined criteria;

generate, by the processor, an order to purchase the matched derivative;

send, by the processor, the order to a computer-hosted clearinghouse; and

delete, by the processor, unmatched requests and unmatched derivatives,

wherein at least one of the predetermined criteria is based on arrival time, departure time, arrival date, departure date, arrival city, and departure city, wherein the derivatives made available for trading comprise at least one of futures contracts, put options, and call options, and wherein the at least one of the predetermined criteria allows for a predetermined amount of deviation in the at least one of arrival time, departure time, arrival date, departure date, arrival city, and departure city.

8. The system of claim 7, wherein airplane tickets are the travel items underlying the available derivatives and the available requests.