System and method for adjusting asset value and availability in data records for mitigating speculative trading in a prediction market

• US 8,868,459 B2
• Filed: 06/18/2012
• Issued: 10/21/2014
• Est. Priority Date: 06/18/2012
• Status: Active Grant

• Current Assignee: Exago Ventures SA
• Original Assignee: Exago Ventures SA
• Inventors: De Melo Esteves, Antnio Miguel
• Primary Examiner(s): Hamilton, Lalita M
• Application Number:
  US13/525,366
• Publication Number:
  US 20130339206A1
• Time in Patent Office: 855 Days
• Field of Search: 705/35, 705/36.R, 705/37
• US Class Current: 705/36.R
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

The present subject-matter belongs to the field of system and methods for automatic and electronic transaction control, namely in introducing minimum holding times and forcing transaction outcomes in a market. The system and method include adjusting asset value and availability for mitigating speculative market manipulation and pure speculative trading transactions outcomes in a prediction market. The modules introduce pure delays, selective delays or force the transaction outcome evaluations such that these goals are addressed. One of the principles used in these methods and modules is that by increasing the risk of the purely speculative or manipulative trading strategies, their expected payoff will be reduced. Thus participants will have less incentive to use them and their occurrence and impact will be greatly reduced.

Claims

1. A system for a server application in a server device which includes a processor and a non-transitory medium that stores one or more programs of instruction executable by the processor, to adjust asset market value and time of availability, to mitigate speculative market manipulation and pure speculative trading transactions in a prediction market comprising:

a value and availability adjustment module that resides on the server device and that adjusts a market value and corresponding time of availability of asset data records, the value and availability adjustment module comprising;

a restrictor sub-module that restricts timing availability of the asset data records;

an estimator sub-module that estimates market value and time of availability of the asset data records based on a holding time; and

an estimator sub-module that estimates market value and time of availability of the asset data records based on a future event;

a display and order execution module that resides on the server device; and

a target participant selection module that resides on the server device and that determines based on the asset data records whether a participant attempting to execute a transaction on an asset is performing speculative market manipulation or pure speculative trading transaction,

wherein in a case that the target participant selection module determines that the participant is performing speculative market manipulation or pure speculative trading transaction,

said value and availability adjustment module calculates an adjusted market value and corresponding time of availability of the asset, based on the estimates obtained in at least one of the estimator sub-modules, and calculates an unadjusted market value and corresponding time of availability of the asset, and

the display and order execution module presents the adjusted market value and corresponding time of availability of the asset and the unadjusted market value and corresponding time of availability of the asset, before permitting the transaction to proceed.

2. The system according to claim 1, wherein the target participant selection module is configured to:

on request, supply a list of traded assets;

on request, supply a list of available traded assets;

select a participant belonging to targeted participant selection; and

subject the data record of the selected participant, to the value and availability adjustment module.

3. The system according to claim 1, wherein the restrictor sub-module of timing availability performs at least one of holding the transaction data record and flagging a data variable of transaction data record, such that a purchased asset is held for a first predetermined delay period and/or the proceedings of an asset sale are held for a second predetermined delay period.

4. The system according to claim 1, wherein the estimator sub-module based on holding time recalculates an asset transaction data record upon an effective holding time of the asset is less than a predefined holding time such that the result of the transaction is deteriorated.

5. The system according to claim 4, wherein the asset transaction data records is adjusted such that the result of the transaction is deteriorated by an amount, the amount being inversely related to the effective holding time when compared to the predefined holding time.

6. The system according to claim 5, wherein the asset transaction data records is adjusted such that only upon an occurrence of one of a profit or a loss, the result of the transaction is deteriorated by an amount inversely related to the effective holding time A when compared to the predefined holding time B.

7. The system according to claim 1, wherein the estimator sub-module based on future event is configured to, for a specific asset and for a specific future event, adjust the asset transaction data records in order to retain a predetermined percentage X, of a profit of the sale the asset in case of a profit, or a predetermined percentage of the sale of the asset in case of a loss, and if the asset sale is not confirmed by the future event, the estimator sub-module recalculates the asset transaction data records such that a result of the transaction is subsequently credited by a previously retained amount multiplied by a predetermined factor.

8. The system according to claim 1, wherein the display and order execution module are configured to:

display the adjusted asset value and an adjusted asset availability date;

display the unadjusted asset value and an unadjusted asset availability date;

the display of the unadjusted value and the unadjusted date being either before, after, or simultaneously with the display of the adjusted asset value and the adjusted asset availability date; and

only enable the transaction after the display of the adjusted asset value, the display of the adjusted asset availability date, the display of the unadjusted asset value, and the display of the unadjusted asset availability date.

9. The system according to claim 1, further comprising a target participant eligibility recalculation module, the target participant eligibility recalculation module for updating the target participant selection module based on the transaction data record results.

10. A method for a server application in a server device which includes a processor and a non-transitory medium that stores one or more programs of instructions executable by the processor, to adjust asset market value and time of availability, to mitigate Speculative Market Manipulation and Pure Speculative Trading in a prediction market, the method performed by the server device comprising:

(a) determining based on asset data records whether a participant requesting to execute a transaction on an asset is performing speculative market manipulation or pure speculative trading transaction;

(b) adjusting a market value and time of availability of the asset data records, including;

(b1) restricting a timing availability of the asset data records;

(b2) estimating the market value and the time of availability of the asset data records based on a holding time; and

(b3) estimating the market value and the time of availability of the asset data records based on a future event;

(c) displaying to the participant an adjusted market value and corresponding time of availability of the asset and an unadjusted market value and corresponding time of availability of the asset;

(d) receiving an order to execute the transaction from the participant; and

in a case that it is determined in (a) that the participant is performing speculative market manipulation or pure speculative trading transaction,

calculating the adjusted market value and corresponding time of availability of the asset based on the estimates obtained in at least one of (b2) and (b3) and calculating the unadjusted market value and corresponding time of availability of the asset, and

causing (c) to be performed before permitting the transaction to proceed.

11. The method according to claim 10, wherein selecting the participant further comprises:

on request, supplying the participant with a list of traded assets;

on request, supplying the participant with a list of available traded assets;

selecting participants belonging to a targeted participant selection; and

subjecting the asset data record of the participant, to the value and the availability adjustment module.

12. The method according to claim 10, wherein restricting the timing availability further comprises holding the transaction data record or flagging a data variable of the transaction data record, such that a bought asset is held for a first predetermined delay period and/or the proceedings of the asset sale are held for a second predetermined delay period.

13. The method according to claim 10, wherein estimating the value and the availability of the asset data records based on the holding time further comprises recalculating the asset transaction data records upon an effective holding time of the asset is less than a predefined holding time, that the result of the transaction is deteriorated.

14. The method according to claim 13, wherein the asset transaction data records is adjusted such that a result of the transaction is deteriorated by an amount, the amount being inversely related to the effective holding time when compared to the predefined holding time.

15. The method according to the claim 14, wherein the asset transaction data records is adjusted such that only upon occurrence of a profit or a loss, the result of the transaction is deteriorated by an amount inversely related to the effective holding time A when compared to the predefined holding time B.

16. The method according to claim 10, wherein estimating the value and the availability of the asset data records of the asset based on the future event further comprises:

adjusting the asset transaction data records in order to retain a predetermined percentage of a profit of the sale the asset in case of a profit, or a predetermined percentage of the sale of the asset in case of a loss; and

upon the sale of the asset not being confirmed by the specific event, recalculating the asset transaction data records such that the result of the transaction is subsequently credited by a previously retained predetermined amount multiplied by a predetermined factor.

17. The method according to claim 10, wherein displaying the adjusted value and the adjusted availability asset data records, and receiving order execution, comprises:

displaying the adjusted asset value and an adjusted asset availability date;

displaying the unadjusted asset value and an unadjusted asset availability date;

the displaying of the unadjusted asset value and the unadjusted asset availability date being before, after, or simultaneously with the displaying of the adjusted asset value and the adjusted asset availability date; and

only enabling the transaction upon displaying the adjusted asset value, displaying the adjusted asset availability date, displaying the unadjusted asset value, and displaying the unadjusted asset availability date.

18. The method according to claim 10, further comprising a target participant eligibility recalculation module, the target participant eligibility recalculation module updating the target participant selection module based on the transaction data record results.

19. A computer program product, to adjust asset market value and time of availability, to mitigate Speculative Market Manipulation and Pure Speculative Trading in a prediction market, said computer program product being embodied in a non-transitory computer readable medium comprising a computer usable medium having computer usable program code embodied therewith, said computer usable program code comprising computer usable program code configured to carry out operations comprising:

(a) determining based on asset data records whether a participant requesting to execute a transaction on an asset is performing speculative market manipulation or pure speculative trading transaction;

(b) adjusting a market value and time of availability of the asset data records, including;

(b1) restricting a timing availability of the asset data records;

(b2) estimating the market value and corresponding time of availability of the asset data records based on a holding time; and

(b3) estimating the market value and corresponding time of availability of the asset data records based on a future event;

(c) displaying an adjusted market value and corresponding time of availability of the asset and an unadjusted market value and corresponding time of availability of the asset;

(d) receiving an order to execute a transaction from the participant; and

in a case that it is determined in (a) that the participant is performing speculative market manipulation or pure speculative trading transaction,

calculating the adjusted market value and corresponding time of availability of the asset based on the estimates obtained in at least one of (b2) and (b3) and calculating the unadjusted market value and corresponding time of availability of the asset, and

causing (c) to be performed before permitting the transaction to proceed.

20. The computer program product according to claim 19, wherein the computer usable program code is further configured to:

restricting of the timing availability by holding a transaction data record or flagging a data variable of the transaction data record, such that a bought asset is held for a first predetermined delay period and/or proceedings of the sold asset are held for a second predetermined delay period;

estimating the value and the availability of asset data records of the asset based on the holding time if an effective holding time of the asset is less than a predefined holding time, the estimation being in the form of recalculating the asset transaction data records such that a result of the transaction is deteriorated;

estimating the value and the availability of the asset data records based on future event comprising;

adjusting the asset transaction data records in order to retain a predetermined percentage X of the sale the asset, and, if the asset sale is not confirmed by the future event, recalculating the asset transaction data records such that the result of the transaction is subsequently credited by a previously retained predetermined percentage X of the sale the asset.