Patent ID: 7805353

Claim:
A computer-implemented method for managing a first entity's exposure to an economic risk associated with a commodity, comprising the steps of: forming, by at least one programmable processor, a model portfolio of said exposure, said model portfolio generating cash flow data; forming, by said at least one programmable processor, a hedging portfolio for said exposure, said hedging portfolio generating cash flow data; receiving, by said at least one programmable processor, benchmark cash flow data agreed to by said first entity and a second entity; periodically combining, by said at least one programmable processor, said cash flow data of said model portfolio and said hedging portfolio; calculating, by said at least one programmable processor, payout data based on a difference between said combined cash, flow data and said benchmark cash flow data and outputting, by said at least one programmable processor, the payout data representing payments to be made between the first entity and the second entity.