Methods and apparatus relating to the formulation and trading of risk management contracts
Number of patents in Portfolio can not be more than 2000
United States of America Patent
Stats
-
Oct 17, 2000
Grant Date -
N/A
app pub date -
Jun 6, 1997
filing date -
May 29, 1992
priority date (Note) -
In Force
status (Latency Note)
Importance
Abstract
Methods and apparatus which deal with the management of risk relating to specified, yet unknown, future events are disclosed. `Sponsor` stakeholders specify a particular product relating to an event or phenomenon for which there is a range of possible future outcomes. `Ordering` stakeholders then offer contracts relating to the predetermined phenomenon and corresponding range of outcomes. The offered contracts specify an entitlement or (pay-off) at the future time of maturity for each outcome, and a consideration (or premium) payable, in exchange, to a `counter-party` stakeholder. Independently of the offered contracts, the `counter-party` stakeholders input data as to their view of the likelihood of occurrence of each outcome in the predetermined range into the future, or specifically at the predetermined date of maturity. Each offered contract is priced by the processing units by calculating counterparty premiums from the registered data, and a match attempted by a comparison of the offered premium with the calculated premiums. Matched contracts can be further traded until maturity, and at-maturity processing handles the exchange of entitlement as between the matched parties to the contract.
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