Patent ID: 8112342

Claim:
A system for adjusting one or more terms of derivative contracts to account for time value of money due to an occurrence of a corporate event, comprising: a computer programmed to: receive financial information regarding the derivative contracts comprising at least a termination claim of the equity derivative and the length of the derivative contract, wherein each derivative contract represents one of three economic components of an underlying security: a DIVS component representing a stream of dividends distributed to holders of the underlying security, a RISKS component representing a speculation on future gains of the underlying security, and an OWLS component represents the remaining value of the underlying security absent the DIVS and RISKS components, and wherein the termination claim determines the payout between the OWLS and DIVS components at the end of the derivative contract; receive information identifying a corporate event that affects a term of the derivative contract; adjust the termination claim of the derivative contract to its present value based at least on the length of time remaining on the derivative contract to account for the time value of money; determine any needed formulas, from a plurality of predefined formulas, for determining the effect of the corporate event on the DIVS component, RISKS component, and OWLS component, wherein the determined formulas account for the time value of money; and adjust said one or more terms of the DIVS component, the RISKS component, and the OWLS component based on the determined formulas and the adjusted termination claim; and a computer storage disk programmed to store the adjusted termination claim, the adjusted DIVS component, the adjusted RISKS component, and the adjusted OWLS component, and to update records associated with holders of the derivative contract.