Patent ID: 7693778

Claim:
A computer-based contract trading system for formation, sale, resale and settlement of variable pay-out hedging contracts under jurisdiction of a government regulatory agency, the system comprising: a communications interface for sending and receiving data, including trading instructions from traders; a processor system for executing processing modules; a first processing module for receiving data to define a desired contract having a value at a time of maturity determined by a difference between a value of a predefined indicator at the time of maturing and a target value selected at contract formation; a second processing module, responsive to said first processing module, for defining a contract based on said received data; a third processing module for offering for sale and for selling a plurality of said contracts to traders; a fourth processing module for accepting orders to trade one or more of said contracts; a fifth processing module for determining whether an originator of an order to trade one or more of said contracts is able to perform the order; a sixth processing module for matching an order to sell said contracts with orders to purchase said contracts; a seventh processing module for settling contracts at maturity thereof; and wherein said system retains transaction information for compliance with regulations of the government agency.