Patent ID: 7882016

Claim:
A system for managing financial instruments for energy markets comprising: a processing unit; and a storage device coupled to the processing unit having stored therein information for configuring the processing unit to manage financial instruments for energy markets, the information comprising instructions for: facilitating collateral efficiency among buyers and sellers in an energy marketplace; receiving information regarding an energy purchase agreement providing for an obligation of an energy seller to provide physical delivery by a physical delivery date of an energy commodity in exchange for payment of a purchase price for the energy commodity by an energy buyer on a payment date after the physical delivery date; generating a seller cash flow contract (SCFC) with the energy buyer, derivative of the energy purchase agreement, between a clearing house and the energy buyer, who is the seller of the SCFC, wherein the clearing house is obligated to pay the SCFC seller (energy buyer) a value less than the energy purchase price prior to the payment date in exchange and has the right to receive the purchase price from the SCFC seller (energy buyer) on the payment date and further wherein the clearing house is obligated to provide physical delivery of the energy commodity to the SCFC seller (energy buyer) and has the right to receive the physical delivery of the energy commodity from the energy seller; generating a buyer cash flow contract (BCFC) with the energy seller, derivative of the energy purchase agreement, between a clearing house and the BCFC buyer (energy seller), wherein the clearing house is obligated to pay the payment price on the payment date and has the right to receive payment of less than the purchase price on the payment date and the right to receive physical delivery of the energy commodity from the BCFC buyer (energy seller) by the physical delivery date and has the obligation to provide physical delivery of the energy commodity to the energy buyer; netting physically delivery obligations and purchase price obligations at predetermined timer intervals; communicating with a delivery operator system to schedule delivery of the energy commodity on the delivery date to the buyer.