Invention for Methods, apparatus, and software for the formulation, initial public offering or private offer, and secondary market trade of risk management contracts”.


The market for methods, apparatus, and software for the formulation, initial public offering or private offer, and secondary market has witnessed significant growth in recent years. With the increasing number of companies going public or seeking private funding, there is a growing demand for efficient and reliable tools to navigate the complex processes involved in these transactions. The formulation stage is crucial for companies looking to raise capital. It involves the preparation of financial statements, prospectuses, and other documents required for the offering. In the past, this process was often time-consuming and prone to errors. However, with the advent of advanced software and automation tools, companies can now streamline the formulation process, ensuring accuracy and efficiency. These software solutions offer features such as data integration, financial modeling, and document management, enabling companies to create comprehensive and professional offering materials. By automating repetitive tasks and providing real-time collaboration capabilities, these tools save time and resources for companies, allowing them to focus on other critical aspects of their offering. Once the formulation is complete, companies have the option to go public through an initial public offering (IPO) or seek private funding through a private offer. Both options have their advantages and complexities, requiring careful planning and execution. To navigate these processes successfully, companies often rely on specialized methods and apparatus. Methods for IPOs involve various activities such as underwriting, due diligence, and compliance with regulatory requirements. Apparatus, on the other hand, refers to the physical infrastructure and equipment required to facilitate the offering, such as trading platforms, communication systems, and investor relations tools. These methods and apparatus play a crucial role in ensuring a smooth and successful IPO or private offer. In recent years, the secondary market has also gained significant traction. This market allows investors to buy and sell securities that have already been issued in the primary market. Secondary market transactions can be complex, involving multiple parties and regulatory considerations. To facilitate these transactions, specialized software solutions have emerged. Secondary market software provides features such as order matching, trade execution, and settlement management. These tools enable investors to trade securities efficiently and securely, ensuring transparency and compliance with regulatory requirements. Additionally, these software solutions often offer analytics and reporting capabilities, allowing investors to make informed decisions based on market trends and performance data. The market for methods, apparatus, and software for the formulation, initial public offering or private offer, and secondary market is expected to continue growing in the coming years. As more companies seek funding and investors look for opportunities to diversify their portfolios, the demand for efficient and reliable tools will only increase. In conclusion, the market for methods, apparatus, and software related to the formulation, initial public offering or private offer, and secondary market is witnessing significant growth. These tools play a crucial role in streamlining processes, ensuring accuracy, and facilitating transactions in the capital markets. As technology continues to advance, we can expect further innovations in this market, providing even more efficient and sophisticated solutions for companies and investors alike.

The NORTH AMERICAN DERIVATIVES EXCHANGE Inc invention works as follows

The key features of this method, apparatus, or design include, but are not limited to, innovations and implementations in futures securities, the concept of Type I futures, Type II futures, and Type III contracts, the idea of tickets and coupons being tradable contracts, the idea of bifurcation, the idea of redeemable bundles, the realization of the futures marketplace on the Internet, the apparatus and engine of an Internet trading interface, the notions of cookie-cutter electronic Internet futures markets, the maximization

Background for Methods, apparatus, and software for the formulation, initial public offering or private offer, and secondary market trade of risk management contracts”.

General George Patton reportedly said: “Take calculated risks. This is not the same as being rash. General Patton?s attitude towards risk was far-reaching, as his decisions and risks often cost men their lives in battle. Calculated risk is not just a concept that applies to warfare. It’s a way of thinking that all of us use when we make daily decisions that shape our lives. The reality is that the majority of risks, both economic and non-economic, that individuals face are not shared with society. As inefficient and unsecure as it might seem, “we allow our standard of living to be largely determined by a random game of chance.

Over the years, a variety of instruments has emerged to help people “hedge their bets” In the face of risks. In its various forms, insurance is a classic hedge instrument. The futures market is also used to hedge the price of commodities. A futures market is a place where you can make bets on the direction of the index or price that defines the market. “Buying insurance against price fluctuations is the essence of hedging any market, whether it’s commodities, real estate or anything else with economic implications.

In the past, a number of financial systems management systems were proposed. U.S. Pat. is an example of a system that can be used. Nos. Nos. The prior art, in general, has suggested several methods for transferring the types of risk that are common to most people. The prior art includes banks, insurance companies, commodities and equity exchanges, bond and swap markets and mutual funds. Each of these was developed because many parties had similar exposures to risk and needed a way to transfer it.

These structures work by transferring the risk to an entity that uses one of two forms of capital structure.

Under the capital leveraging system an insurer can accept any amount or type of risk subject to regulatory and internal underwriting restrictions. This format allows for a great deal of flexibility when it comes to pricing, terms and the limits of risk accepted. These insurers work on the assumption that premiums will cover all claims. If losses exceed investment income and premiums, their capital can be used to pay for claims. However, the aggregate liability of policies is usually much greater than both their premiums and capital. “Like a bank that could not pay all its depositors, insurance companies cannot pay all their policies if they claim their limits.

Leveraging capital” translates a modest underwriting profit from premiums into a significant return on capital. A relatively small loss in premiums results in a substantial loss of capital. The fact that the policy limits of an insurer are usually much higher than their assets means that this system doesn’t guarantee an insurer’s financial stability. An insurer can only accept risks that are common to many, limit its exposure to every single risk to a tiny percentage of its capital and use reinsurance to protect the capital of its shareholders. When losses are predictable, this strategy works well. When insurers take on unique or hard-to-place risk, capital and premium may not be enough to cover claims. Lloyd’s of London, which operates like a group of small insurance companies, with the exception that its underwriting members can, in theory be forced to pay up to their limit of assets if losses exceed the available funds.

The prior art provided insurance policies that only covered the ability of the insurer to meet its obligations. Reinsurance is sometimes available but reinsurance policies also protect the insurer to the extent that the reinsurance company can pay claims as they accumulate.

A capital matching system, such as an exchange accepts risk through matching buyers and sellers. In other words, parties transfer the risk to those who are accepting it. This system allows parties to accept or transfer risks that can be quantified easily in small units such as futures and option contracts. The system limits the conditions and types of transfers to specific contractual units priced by the market, which is a price agreed upon between the parties willing to accept risk and those wishing to transfer it.

These contracts are very narrowly defined and offer little flexibility when it comes to accepting risk. The parties transferring the risk are not concerned about the performance of the specific party who has accepted the corresponding amount. The exchange acts as an intermediary, matching all parties perfectly, and its only exposure is the credit performance by any participant. As with Lloyd’s, the assets of these parties can be attached in order to guarantee their performance.

Each system is based on accepting risks that are shared by a large number of people. Certain types of exposure to risk have become more difficult to transfer as financial transactions and the world in general are becoming increasingly complex. The insurance market has seen a reduction in certain types of capacity due to catastrophic events, judicial interpretations and other factors. Insurance markets today are often unable or unwilling transfer unique risks, such as those that have a high probability of loss or where the loss may occur sooner than expected or more severely. Exchanges have made some progress in addressing these risks. For example, they offer catastrophe futures contracts. However, the terms of the contract are very restrictive and don’t easily integrate with a reinsurance agreement. “Neither the exchanges or mutual funds are able to accept a unique risk.

Despite insurance companies and exchanges there is no way for people to protect themselves against the majority of everyday risks. Workers, for example, have no way to directly hedge against the pain caused by prolonged work stops. Retailers do not have a way to protect themselves against macroeconomic shocks in the global market that could affect the availability of stock items. Individuals have no way of protecting themselves against government decisions, such as wars, economic embargoes or legislation, which could significantly impact their lives.

Iowa Electronic Markets, which is operated by the faculty of the University of Iowa Tippie College of Business in order to fulfill a teaching and research mission, has made a limited effort to address these shortcomings. IEM is a real-money, small-scale futures exchange where contract payouts are dependent on economic and political factors such as elections. The IEM is an exchange that trades real money futures contracts. It is determined by economic and political indicators, as well as financial events. These markets allow participants to invest their own money, purchase and sell listed contracts and take on the risk of both earning and losing money.

The IEM’s sole purpose is to teach and conduct research. The IEM is a great teaching tool that allows participants to learn about the financial markets first hand. They are more likely to become informed because they have an extra incentive. This could be a race in politics, earnings per share, stock returns, or exchange rates between foreign currencies and dollars. The IEM markets are a research project that provides insights into the market and traders’ behavior. Students, faculty and staff from colleges and universities around the world are eligible to participate in IEM. IEM political markets can also be accessed by non-academics.

The IEM is run as a non-profit enterprise. The IEM is not charged any commissions or transaction fees, and its method of issuing and paying out contracts on the market ensures it does not make financial gains or losses. The IEM falls under the jurisdiction of the Commodity Futures Trading Commission, but it is neither regulated nor registered by the CFTC, or any other regulatory body.

As noted above, traders can access the market via the World Wide Web.

While the IEM offers a few contracts that are different from traditional commodity futures, the majority of the system is still based on the conventional futures trading principle. IEM is a traditional method of risk hedging, similar to insurance. It offers a limited number of contracts, incomplete markets, and therefore limits the opportunities for risk management.

Therefore, the current risk hedging methods available, including IEM fail to meet potential needs of all parties, including:

There is a need to create a platform and system that brings buyers and vendors together and allows them to execute a wide range of hedge instruments. A platform of this kind has not yet been created in the world due to a number of previously insurmountable obstacles.

Despite existing brick-and-mortar futures markets, a need exists for additional futures to accommodate the wide variety of risk management requirements. Liquidity is vital to the futures markets, as described in the Prior Art section. CME and other traditional futures markets require a certain minimum volume of trading before they can sanction or administer the trading a security. “Without a high minimum trading volume the market will not be able to break even.

The present invention aims to address the deficiencies of prior art by providing a system for risk hedging and contract trading that allows prospective traders to transact in real-time with near-instantaneous speed. This can be done 24 hours a day, seven days a week, without the need of an intermediary.

The present invention also aims to provide and enable markets for the trading of risk hedging agreements pertaining to an almost unlimited range of events.

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