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

  • US 7,418,423 B2
  • Filed: 06/17/2004
  • Issued: 08/26/2008
  • 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 bid information for a plurality of buyers of a commodity, the bid information including for each buyer in the plurality of buyers a buyer-specific basis for the commodity;

    (b) storing the bid information on the net market system;

    (c) repetitively receiving an updated commodity exchange price for the commodity and calculating for each buyer in the plurality of buyers a buyer-specific flat price based on the buyer-specific basis for said each buyer and said updated commodity exchange price;

    (d) receiving an offer from a seller to sell an offered quantity of the commodity to at least one buyer in the plurality of buyers at the buyer-specific flat price for said at least one buyer;

    (e) responsive to receiving the offer, attempting to secure a futures contract for the commodity on behalf of said at least one buyer based on the offer; and

    (f) if the attempt to secure the futures contract succeeds, generating a contract between said at least one buyer and the seller based on the offer;

    (g) wherein steps (c) through (f) are carried out automatically by the net market system without intervention from said at least one buyer.

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