Security futures contract with selectable expiration and method and system for the creation, listing, purchase and sale, and trading of the same

Abstract

The embodiments of the invention provide a novel financial instrument and system and method for creating, listing, purchase and sale, and trading said financial instrument wherein the instrument comprises a security futures contract with a selectable expiration date. A request for quotes process is also provided, which in one embodiment permits the creation and listing of a security futures contract with a selectable expiration date. A method and system for permitting the automated entry of an exchange-for-physicals (EFP) trade including a security futures contract with a selectable expiration date is also provided.

1 . A computer implemented method of creating a security futures contract, wherein a first counterparty computer is communicatively connected to a second counterparty computer via a network, the method comprising:
 receiving a request message from the first counterparty computer at the second counterparty computer to create the security futures contract, the request message including a first indication of an underlying security for which the security futures contract will be associated, and a second indication of a selected expiration date for the security futures contract, wherein the selected expiration date is different than available expiration dates for other security futures contracts related to the underlying security as listed on a futures trading exchange;   transmitting a quote message from the second counterparty computer to the first counterparty computer including at least a price quote for the security futures contract based on the first and second indications in the request message;   receiving an acceptance message from the first counterparty computer at the second counterparty computer indicating acceptance of the price quote; and   facilitating creation of the security futures contract whereby the security futures contract based on the underlying security has an expiration date equal to the selected expiration date.   
     
     
         2 . The method of  claim 1 , wherein the facilitating creation step comprises causing the security futures contract to be listed on the futures trading exchange. 
     
     
         3 . The method of  claim 1 , wherein a futures trading exchange system is communicatively connected to at least one of the first and second counterparty computers, and the facilitating creation step comprises:
 transmitting information related to the security futures contract to the futures trading exchange system, such that the futures trading exchange system lists the security futures contract.   
     
     
         4 . The method of  claim 1 , further comprising:
 receiving a request to execute an exchange for physicals trade including the security futures contract with the selected expiration date; and   facilitating execution of a transaction whereby the security futures contract having the selected expiration date is exchanged for the corresponding underlying security.   
     
     
         5 . The method of  claim 4 , wherein a futures trading exchange system includes at least one computer and a related database capable of communication with at least one of the first counterparty computer and second counterparty computer and wherein the facilitating execution step comprises:
 transmitting a transaction request message to the futures trading exchange system including at least information indicative of the underlying security, the security futures contract with the selected expiration date, and one or more parameters for the exchange for physicals trade, whereby the exchange for physicals trade is executed by the futures trading exchange system.   
     
     
         6 - 10 . (canceled) 
     
     
         11 . A system for creating a security futures contract, comprising:
 a computer system including at least one computer and a related database, the computer system communicatively connected via a network to one or more counterparty computers and operative with a creation programming component to:
 cause the display one or more user interfaces on the one or more counterparty computers, the user interfaces including input fields enabling entry of information relating to the security futures contract; 
 receive a first selection for an underlying security to be bought or sold at a future date; 
 receive a second selection for a contract amount; 
 receive a third selection for an expiration date selected by a user of the one or more counterparty computers, wherein the selected expiration date is different than available expiration dates for other security futures contracts related to the underlying security as listed on a futures trading exchange; 
 transmit a quote for the security futures contract based on the first, second, and third selections to the one or more counterparty computers; 
 receive an acceptance message from the one or more counterparty computers; and 
 facilitate creation of the security futures contract based on the first, second, and third selections and using the quote. 
   
     
     
         12 . The system of  claim 11 , wherein the computer system is a futures trading exchange system, and the one or more counterparty computers include a first counterparty computer operated by an investor and a second counterparty computer operated by a broker-dealer. 
     
     
         13 . The system of  claim 11 , wherein the computer system is operated by a broker-dealer. 
     
     
         14 . The system of  claim 13 , where in the computer system is further capable of communication with a futures trading exchange system designed and configured to receive information from the computer system relating to the security futures contract and list the security futures contract based on the information received from the computer system. 
     
     
         15 . The system of  claim 11 , wherein a user interface provided at the one or more counterparty computers includes input fields permitting a user to input information relating to the security futures contract and wherein the input fields include at least a selected expiration date, wherein the selected expiration date is different than available expiration dates for other security futures contracts related to the underlying security as listed on a futures trading exchange. 
     
     
         16 . The system of  claim 11 , wherein the computer system is further programmed to receive a request from the one or more counterparty computers to calculate an implied rate of return of an exchange for physicals trade related to the security futures contract based on information transmitted to the computer system, and wherein the computer system calculates and causes the one or more counterparty computers to display the implied rate of return for the exchange for physicals trade. 
     
     
         17 . The system of  claim 11 , wherein the computer system is programmed to dynamically calculate and cause the one or more counterparty computers to display an implied rate of return for a set of exchange for physicals trades related to the security futures contract. 
     
     
         18 . The system of  claim 11 , wherein the computer system further comprises a pricing component programmatically operative to:
 receive investor-selected criteria, including at least an investor-selected expiration date, for an exchange for physicals trade including at least an investment criteria;   search pricing data available to the computer system for available security futures contracts; and   display any matches based on the investment criteria and the pricing data available to the computer system for available security futures contracts wherein, for each match, the pricing component calculates an implied rate of return for the exchange for physicals trade.   
     
     
         19 . The system of  claim 18 , wherein the computer system is further programmed to calculate and display a comparison of the implied rate of return for the exchange for physicals trade to the rate of return that the investor would receive from a broker on the same free funds if not used in the exchange for physicals trade. 
     
     
         20 - 25 . (canceled) 
     
     
         26 . A computer implemented method of facilitating a transaction involving a security futures contract related to an underlying security, wherein a first counterparty computer is communicatively connected to a second counterparty computer via a network, the method comprising:
 generating a plurality of security futures contracts each having a unique expiration date, wherein the unique expiration dates are different from the available expirations dates for other security futures contracts related to the underlying security listed on a futures trading exchange;   causing the plurality of security futures contracts to be displayed at the first counterparty computer;   receiving a request message from the first counterparty computer selecting at least one of the security futures contracts and requesting a price quote for the selected at least one security futures contract;   causing the price quote to be displayed on the first counterparty computer; and   receiving an acceptance message from the first counterparty computer indicating acceptance of the price quote.   
     
     
         27 . The method of  claim 26 , wherein the selection of the at least one security futures contract is transmitted to at least the second counterparty computer. 
     
     
         28 . The method of  claim 27 , wherein the selection is transmitting from the first counterparty computer through a centralized system and then to the second counterparty computer. 
     
     
         29 . The method of  claim 28 , wherein the centralized system is an exchange. 
     
     
         30 . The method of  claim 29 , further comprising effecting the transaction involving the selected security futures contract at the accepted price quote. 
     
     
         31 . The method of  claim 30 , wherein the transaction is an exchange-for-physicals trade. 
     
     
         32 . The method of  claim 26 , wherein the plurality of security futures contracts are generated based on a predefined criteria. 
     
     
         33 . The method of  claim 32 , wherein the predefined criteria is a time period. 
     
     
         34 . The method of  claim 32 , wherein the predefined criteria is related to a market condition. 
     
     
         35 . The method of  claim 34 , wherein the market condition is a determination that an exchange-for-physicals transaction having a specific expiration date will result in a desired rate of return. 
     
     
         36 . The method of  claim 35 , wherein the plurality of security futures contracts are generated on a rotating basis, wherein at least a portion of the plurality of security futures contracts are replaced by newly generated security futures contracts. 
     
     
         37 . A system for facilitating a transaction including a security futures contract, comprising:
 a computer system including at least one computer and a related database, the computer system communicatively connected via a network to one or more counterparty computers and operative with a programming component to:
 generate a plurality of security futures contracts each having a unique expiration date, wherein the unique expiration dates are different from the available expirations dates for other security futures contracts related to the underlying security listed on a futures trading exchange; 
 cause the plurality of security futures contracts to be displayed a first of the counterparty computers; 
 receiving a request message from the first counterparty computer selecting at least one of the security futures contracts and requesting a price quote for the selected security futures contract; 
 causing a price quote for the selected security futures contract to be displayed on the first counterparty computer; 
 receiving an acceptance message from the first counterparty computer indicating acceptance of the price quote; and 
 effecting a transaction involving the selected security futures contract at the accepted price quote.