Method for creating and pricing options

摘要

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.

主权项

1. A method of option creation for an asset that has a value that varies over time, comprising the steps of:
(a) viewing on a computer screen connected to a computer a graphical display that shows the values of the asset over time; (b) entering into the computer a selection of asset values in a future time period by drawing a zone on the graphical display, wherein said zone is located in an area of the display that corresponds to asset values in a future time period and wherein the asset values and time period encompassed by said zone represent a proposed option on the asset; (c) receiving a price quote for the proposed option computed using the asset values and time period entered into the computer by drawing the zone; and (d) specifying a stake for said option.