Fuel offering and purchase management system

• US 8,478,683 B2
• Filed: 12/23/2011
• Issued: 07/02/2013
• Est. Priority Date: 04/09/2007
• Status: Active Grant

• Current Assignee: Goldman Sachs & Co. LLC (Goldman Sachs Group Incorporated)
• Original Assignee: Goldman Sachs & Company (Goldman Sachs Group Incorporated)
• Inventors: Kirch, Michael, Sanghvi, Saurabh, Sharfman, Daniel
• Primary Examiner(s): Lemieux, Jessica
• Application Number:
  US13/336,510
• Publication Number:
  US 20120278222A1
• Time in Patent Office: 557 Days
• Field of Search: 705/37
• US Class Current: 705/37
• CPC Class Codes: G06Q 30/0206 Price or cost determination based on market factors
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 50/06 Energy or water supply

Abstract

The present disclosure is directed to facilitating pricing, sales and delivery of a commodity. In one embodiment, a Fuel Offer Generator facilitates the purchase and management of fuel offerings. The Fuel Offer Generator allows Customers interested in securing fuel to obtain an offer for fuel at lock-in prices for various tenors. Fuel Customers may later exercise the fuel offers so their fuel costs are locked-in at desired levels The Fuel Offer Generator may generate hedges to counteract fuel related risks stemming from fuel offer purchases. A customer that purchases a fuel offering can exercise their fuel offering order at a specified price and redeem any difference between the market price for their purchased fuel and the price specified in their fuel offering order. The Fuel Offer Generator determines which metrics are relevant to pricing the fuel offering and then employs those determined metrics to establish the pricing of fuel offerings.

Claims

1. A computer processor-implemented method to provide commodity offerings, comprising:

setting at least one commodity offering term for a commodity offering;

determining, by a computer processor, at least one commodity offering pricing value based on the at least one commodity offering term and at least one commodity offering pricing model for the commodity offering;

providing the commodity offering for selection by a customer, wherein the commodity offering includes two or more associations, each association including a strike price, a premium, and a offer quantity;

receiving, at the computer processor, indication of a purchase of the commodity offering by the customer, wherein the purchase includes a selection of one of the two or more associations and an indication of payment of the premium of the selected association;

receiving, at the computer processor, an indication of an exercise of the purchased commodity offering including an exercise price and an exercise quantity;

updating, by the computer processor, a remaining offer quantity associated with the purchased commodity offering based on the exercise quantity and the offer quantity of the selected association; and

providing payment to the customer for the exercised commodity offering based on the strike price of the selected association, the exercise price, and the exercise quantity.

2. The method of claim 1, wherein the commodity is a fuel.

3. The method of claim 2, wherein the fuel is a vehicle fuel.

4. The method of claim 2, wherein the fuel is a heating fuel.

5. The method of claim 1, wherein the exercise price is a geographically averaged commodity price.

6. The method of claim 1, wherein the exercise price is a national average commodity price.

7. The method of claim 1, wherein the exercise price is a multi-national average commodity price.

8. The method of claim 1, wherein the strike price is pre-selected and the premium is determined based at least in part on the strike price.

9. The method of claim 1, wherein the premium is pre-selected and the strike price is determined based at least in part on the premium.

10. The method of claim 1, wherein the commodity offering pricing model includes at least one commodity market variable.

11. The method of claim 10, wherein the at least one commodity market variable is a geographically averaged commodity price.

12. The method of claim 10, wherein the at least one commodity market variable includes any of:

wholesale gasoline over-the-counter options market data, wholesale gasoline over-the-counter forward market and futures market data, retail gasoline spot prices, wholesale gasoline implied volatilities, a wholesale gasoline forward curve, and a spread of retail spot price over wholesale spot price.

13. The method of claim 1, further comprising:

determining whether the associations are satisfactory.

14. The method of claim 13, wherein the determining whether the associations are satisfactory comprises querying a market information database for information to be used as a factor in determining whether said associations are satisfactory.

15. The method of claim 13, wherein the determining whether the associations are satisfactory comprises querying a customer marketing database for information to be used as a factor in determining whether said associations are satisfactory.

16. The method of claim 15, wherein the commodity offering terms are adjusted based on the determination of whether the associations are satisfactory.

17. The method of claim 15, wherein the commodity pricing model is adjusted based on the determination of whether the associations are satisfactory.

18. The method of claim 13, wherein the determining whether the associations are satisfactory comprises querying a historical usage database for information to be used as a factor in determining whether said associations are satisfactory.

19. The method of claim 13, wherein the commodity offering term is adjusted based on the determination of whether the associations are satisfactory.

20. The method of claim 13, wherein the commodity offering pricing model is adjusted based on the determination of whether the associations are satisfactory.

21. The method of claim 1, wherein the associations further include one or more of a tenor and a commodity type.

22. The method of claim 1, wherein the commodity offering pricing model comprises a commodity volatility model described by a stochastic differential equation.

23. The method of claim 22, wherein the commodity volatility model described by the stochastic differential equation is manifested in a Monte Carlo simulation.

24. The method of claim 22, wherein the commodity volatility model described by the stochastic differential equation is manifested in a grid-pricing scheme.

25. The method of claim 22, wherein the commodity volatility model described by the stochastic differential equation is manifested in at least one analytic formula.

26. The method of claim 1, wherein the setting at least one commodity offering term is based on a customer specification.

27. The method of claim 26, wherein the customer specification includes a desired strike price.

28. The method of claim 26, wherein the customer specification includes a desired premium.

29. The method of claim 26, wherein the customer specification includes a tenor.

30. The method of claim 26, wherein the customer specification includes a commodity type.

31. The method of claim 1, wherein the purchase of the commodity offering further includes indication of payment of the strike price of the selected association.

32. The method of claim 31, further comprising providing payment to a commodity retailer based on the exercise.

33. The method of claim 1, wherein the payment to the customer is limited based on the offer quantity.

34. The method of claim 1, further comprising:

recording customer selections of commodity offerings in a customer selection database; and

executing a hedge based on the customer selection database.

35. The method of claim 34, further comprising:

aggregating entries in the customer selection database into at least one similarity class prior to executing the hedge; and

executing the hedge based on similarity classes.

36. The method of claim 35, wherein aggregating entries is based on commodity offering terms.

37. The method of claim 35, wherein aggregating entries is based on commodity offering pricing.

38. The method of claim 35, wherein aggregating entries is based on customer characteristics.

39. The method of claim 35, wherein aggregating entries is based on risk considerations.

40. The method of claim 34, wherein the hedge includes purchase of at least one forward contract.

41. The method of claim 1, wherein the commodity offering pricing model is configured to output at least one price sensitivity value.

42. The method of claim 41, further comprising:

executing a hedge based at least in part on the at least one price sensitivity value.

43. The method of claim 42, further comprising:

analyzing the hedge based on a set of risk mitigation criteria; and

modifying the commodity offering pricing model based on the analysis.

44. A system to provide commodity offerings, comprising:

means for setting at least one commodity offering term for a commodity offering;

means for determining at least one commodity offering pricing value based on the at least one commodity offering term and at least one commodity offering pricing model for the commodity offering;

means for providing the commodity offering for selection by a customer, wherein the commodity offering includes two or more associations, each association including a strike price, a premium, and an offer quantity;

means for receiving indication of a purchase of the commodity offering by the customer, wherein the purchase includes a selection of one of the two or more associations and an indication of payment of the premium of the selected association;

means for receiving an indication of an exercise of the purchased commodity offering including an exercise price and an exercise quantity;

means for updating a remaining offer quantity associated with the purchased commodity offering. based on the exercise quantity and the offer quantity of the selected association; and

means for providing payment to the customer for the exercised commodity offering based on the strike price of the selected association, the exercise price, and the exercise quantity.

45. A non-transitory medium readable by a computer processor to provide commodity offerings, comprising instructions that, when executed by the computer processor, direct the computer processor to:

set at least one commodity offering term for a commodity offering;

determine at least one commodity offering pricing value based on the at least one commodity offering term and at least one commodity offering pricing model for the commodity offering;

provide the commodity offering, wherein the commodity offering includes two or more associations, each association including a strike price, a premium, and an offer quantity;

receive indication of a purchase of the commodity offering by the customer, wherein the purchase includes a selection of one of the two or more associations and an indication of payment of the premium of the selected association;

receive an indication of an exercise of the purchased commodity offering including an exercise price and an exercise quantity;

update a remaining offer quantity associated with the purchased commodity offering based on the exercise quantity and the offer quantity of the selected association; and

provide payment to the customer for the exercised commodity offering based on the strike price of the selected association, the exercise price, and the exercise quantity.

46. An apparatus to provide commodity offerings, comprising:

a memory;

a computer processor disposed in communication with said memory, and configured to execute a plurality of processing instructions stored in the memory, wherein the instructions direct the computer processor to;

obtain a search query from a searcher;

set at least one commodity offering term for a commodity offering based on the search query;

determine at least one commodity offering pricing value based on the at least one commodity offering term and at least one commodity offering pricing model for the commodity offering;

provide the commodity offering, wherein the commodity offering includes two or more associations, each association including a strike price, a premium, and an offer quantity for selection by a customer;

receive indication of a purchase of the commodity offering by the customer, wherein the purchase includes a selection of one of the two or more associations and an indication of payment of the premium of the selected association;

receive an indication of an exercise of the purchased commodity offering including an exercise price and an exercise quantity;

update a remaining offer quantity associated with the purchased commodity offering. based on the exercise quantity and the offer quantity of the selected association; and

provide payment to the customer for the exercised commodity offering based on the strike price of the selected association, the exercise price, and the exercise quantity.