Patent ID: 8229840

Claim:
A method of creating an implied underlying price stream through a processor with external communication from markets, consisting of a sequence of arbitrary reference prices, the method comprising: a) providing on the processor an arbitrary reference price to market participants consisting essentially of other processors, b) enabling the other processor market participants in communication with the processor to price call and put option contracts for an underlying instrument using the arbitrary reference price as a strike price for the options, c) the market, through the processor, deriving an indicated call price and an indicated put price from one or more prices that the other processor market participants set, and d) the market, through the processor, adjusting the arbitrary reference price to an underlying reference price by a process selected from the group consisting of: i) the market, through the processor, raising the arbitrary reference price if the indicated call price is greater than the indicated put price; ii) the market, through the processor, lowering the arbitrary reference price if the indicated put price is greater than the indicated call price; and iii) the market, through the processor, leaving the arbitrary reference price the same if the indicated call price is equal to the indicated put price; and the price stream enabling the processor to confirm a contract with the market and register within the market that contract as enforceable and completing a contract between two other processors.