Method for creating and pricing options

US7212998B1 · kind B1 · utility

Assignee

• Olsen Data Ltd. · CH

Inventors

• Ulrich Müller · Neustadt, DE
• Richard Brady Olsen · Zürich, CH
• Jonathan Buchanan · Winterthur, CH

Key dates

• Filing date: Nov 21, 2000
• Grant date: May 1, 2007
• Expiry date: Feb 7, 2024

Classification

• Technology area (CPC G): Physics
• CPC primary: G06Q40/04
• WIPO field: IT methods for management
• WIPO sector: Electrical engineering

Abstract

A preferred embodiment of the subject invention is directed to creation and pricing of an option related to a target zone in a time-price plot. If the price curve against time enters this zone (in a preferred embodiment, a “box”), a fixed amount of money is paid to the owner of the option; if the curve misses the box, there is no payout to the option owner, who also forfeits the premium paid for the option. Software is described that enables an option buyer to easily create and set the parameters of such an option, that computes a premium for the option, and that manages payout and other functions related to the option. The above-described embodiment is a buy-to-hit option. Other embodiments are directed to sell-to-hit, buy-to-miss, and sell-to-miss options.