Patent ID: 8719145

Claim:
An exchange system configured for trading a derivative investment instrument, the exchange system comprising: an interface for receiving an incoming order to purchase the derivative investment instrument, the derivative investment instrument having a fixed length payout range associated therewith, wherein the fixed length payout range comprises a plurality of values of a variable for which the derivative investment instrument pays a positive amount if a settlement value of the variable falls within the fixed length payout range at expiration of the derivative investment instrument; a book memory configured to store a plurality of previously received orders, the plurality of previously received orders each having the fixed length payout range associated therewith; a system memory configured to store predefined condition parameters for a plurality of potential outcomes for the derivative investment instrument; and a processor adapted to: associate the plurality of previously received orders in the book memory with at least one of the predefined condition parameters, wherein the predefined condition parameters include at least one parameter for identifying an occurrence of at least one variable value falling within the fixed length payout range before an expiration of the derivative investment instrument; and calculate a zero payout value for orders having the at least one variable value that did not fall within the fixed length payout range before the expiration of the derivative investment instrument and a greater than zero payout value for orders having at least one variable value that did fall within the fixed length payout range prior to or at the expiration of the derivative investment instrument.