Method and apparatus for pricing a commodity

• US 7,827,083 B2
• Filed: 02/06/2007
• Issued: 11/02/2010
• Est. Priority Date: 02/02/2001
• Status: Expired due to Fees

• Current Assignee: E-Markets Incorporated (Constellation Software Incorporated)
• Original Assignee: E-Markets Incorporated (Constellation Software Incorporated)
• Inventors: Beurskens, Frank
• Primary Examiner(s): Nguyen; Nga B.
• Application Number:
  US11/671,482
• Publication Number:
  US 20070130058A1
• Time in Patent Office: 1,365 Days
• Field of Search: 705/35, 705/36.R, 705/37, 705/36
• US Class Current: 705/36.00R
• 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 40/00 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 method of pricing a commodity involving selecting a predetermined market factor, determining at a first time period a first market condition, and providing a formula capable of comparing a predetermined market factor to a market condition to determine the existence of a favorable pricing condition. The method prices a first portion of the commodity when the application of the formula to the predetermined market factor and the first market condition indicates the existence of a first favorable pricing condition. The method prices a second portion of the commodity when the application of the formula to the predetermined market factor and a second market condition indicates the existence of a second favorable pricing condition.

Claims

1. A computer-implemented method of pricing a commodity comprising the steps of:

(a) selecting a predetermined market factor from the group consisting of a predetermined time factor, a predetermined price factor, a predetermined trend factor, a predetermined market status factor, and a predetermined market control factor;

(b) determining at a first time during a pricing period a first market condition from the group consisting of a first time condition, a first price condition, a first trend condition, a first market status condition, and a first market control condition;

(c) providing a formula capable of comparing said predetermined market factor to said first market condition to determine the existence of a favorable pricing condition for a first portion of the commodity;

(d) applying said formula with a computer to said predetermined market factor and said first market condition during the pricing period to determine whether or not a first favorable pricing condition exists;

(e) pricing by the computer a first portion of the commodity at a market price established by a market for the commodity, when said application of said formula to said predetermined market factor and said first market condition indicates the existence of said first favorable pricing condition;

(f) determining at a second time during the pricing period a second market condition selected from a second time condition, a second price condition, a second trend condition, a second market status condition and a second market control condition;

(g) applying said formula with a computer to said predetermined market factor and said second market condition to determine the existence of a second favorable pricing condition; and

(h) pricing by the computer a second portion of the commodity at a market price established by a market for the commodity, when said application of said formula to said predetermined market factor and said second market condition indicates the existence of said second favorable pricing condition.

2. The method of pricing a commodity of claim 1, further comprising receiving information from a supplier of the commodity information relating to a specific type and amount of the commodity which said supplier is willing to supply.

3. The method of pricing a commodity of claim 2, further comprising generating a contract for pricing of said specific type and amount of the commodity by said supplier.

4. The method of pricing a commodity of claim 2, further comprising generating a contract for the pricing of said specific type and amount of the commodity according to the formula.

5. The method of pricing a commodity of claim 2, wherein said information is received from said supplier across a computer network.

6. The method of pricing a commodity of claim 2, further comprising automatically pricing said first portion of the commodity across a computer network when said application of said formula to said predetermined market factor and said first market condition indicates the existence of said first favorable pricing condition.

7. The method of pricing a commodity of claim 1, further comprising:

(i) providing a computer with a database;

(j) storing said predetermined market factor and said formula on said database;

(k) determining at least ten times during the pricing period, and selecting related market conditions from a related time condition, a related price condition, a related trend condition, a related market status condition and a related market control condition;

(l) applying said computer to said predetermined market factor and said related market conditions to determine the existence of favorable pricing conditions; and

(m) pricing quantities of the commodity when said computer indicates the existence of said favorable pricing conditions.

8. The method of pricing a commodity of claim 1, wherein said predetermined market factor is a predetermined time factor, wherein said first market condition is a first time condition, wherein said second market condition is a second time condition, further comprising pricing a first quantity of the commodity when said first market condition is met, and pricing a second quantity of the commodity when said second market condition is met.

9. The method of pricing a commodity of claim 1, wherein said predetermined market factor is a predetermined trend factor comprising historical prices correlated with predetermined periods of time.

10. The method of pricing a commodity of claim 1, wherein said predetermined market factor is a predetermined trend factor comprising an algorithm capable of identifying market price trends.

11. The method of pricing a commodity of claim 10, wherein said algorithm is capable of identifying variances from said market trends.

12. The method of pricing a commodity of claim 1, wherein said predetermined market factor is a predetermined market status factor related to the volatility of a market.

13. The method or pricing a commodity of claim 1, wherein said predetermined market factor is a predetermined market control factor related to a global climate in a predetermined geographic region at a predetermined time.

14. A computer-implemented method of pricing a commodity comprising the steps of:

(a) providing a computer having a database;

(b) receiving from a supplier of the commodity, information relating to a specific type and quantity of the commodity which said supplier is willing to supply;

(c) receiving from said supplier a selection of a predetermined market factor from the group consisting of a predetermined time factor, a predetermined price factor, a predetermined trend factor, a predetermined market status factor and a predetermined market control factor;

(d) determining at a plurality of times during a pricing period, related market conditions from the group consisting of a related time condition, a related price condition, a related market status condition and a related market control condition;

(e) providing a formula capable of comparing said predetermined market factor to said related market conditions to determine the existence of favorable pricing conditions for portions of the commodity;

(f) applying with a computer said formula to said predetermined market factor and said related market conditions during the pricing period to determine the existence of said favorable pricing conditions;

(g) automatically pricing by the computer said portions of the commodity at a market price established by a market for the commodity, when said application of said formula to said predetermined market factor and said related market conditions indicates the existence of said favorable pricing conditions.

15. The method of pricing a commodity of claim 14, wherein said information is received from said supplier over a computer network.

16. The method of pricing a commodity of claim 14, further comprising generating a contract for the pricing of said type and quantity of the commodity according to said predetermined market factor and said formula.

17. The method of pricing a commodity of claim 16, further comprising executing said contract with digital signatures.

18. The method of pricing a commodity of claim 14, wherein said times are at least five consecutive trading days of a commodity market.

19. The method of pricing a commodity of claim 14, further comprising pricing said portions of the commodity on at least five different days.

20. A system for contracting for the pricing of a commodity over a network comprising:

(a) a server computer comprising;

means coupled to said server computer for receiving, from a supplier, information relating to a specific type and quantity of the commodity;

a database residing on the server computer containing a predetermined market factor selected from the group consisting of a predetermined time factor, a predetermined price factor, a predetermined trend factor, a predetermined market status factor and a predetermined market control factor;

means for determining at a plurality of times during a pricing period, related market conditions selected from the group consisting of a related time condition, a related price condition, a related market status condition and a predetermined market control condition;

software residing on the server computer containing a formula capable of comparing said predetermined market factor to said related market conditions to determine the existence of favorable pricing conditions for portions of the commodity;

means for applying said formula to said predetermined market factor and said related market conditions to determine the existence of said favorable pricing conditions during the pricing period; and

means for pricing said portions of the commodity at a market price established by a market for the commodity, when said application of said formula to said predetermined market factor and said related market conditions indicates the existence of said favorable pricing conditions;

(b) a remote terminal;

(c) a communication link between said server computer and said remote terminal.