Abstract: Methods and systems are provided for operating a contracts exchange without conventional counterparty risk measures used by existing futures exchanges such as collateral, margin accounts, position limits, price change limits and regular settlement times. Traders on the contracts exchange hold substantially, or exclusively, cash and/or liquid exchange-traded assets or liabilities. Traders maintain transparent balance sheets which can be made available to third parties. A trader holding assets or liabilities that are illiquid or approaching illiquidity should demonstrate diligence in divesting such holdings. The trader's holdings are marked to their fair market value using acceptable accounting standards. Traders may also be required to obtain and maintain surety guarantees.

Abstract: A method of determining transaction prices on an electronic trading floor, or exchange, requires every participating trader to maintain a bid for each share being traded on the exchange except for those shares held by the trader. Bids are maintained in an electronic database, but not disclosed to traders. When a trader desires to liquidate a share, whether asset or liability, the method enables the trader to liquidate at the most favorable bid. Trading is thus accomplished on the electronic floor without using any offers and without disclosing bids.

Abstract: A contracts exchange system includes a liquid contracts exchange, traders trading on the exchange, a securities exchange listing shares of the trader, thereby enabling access to the capital markets, and a surety guaranteeing obligations of the trader. Methods are provided for transferring risk to the capital markets, for operating a liquid contracts exchange, for paying obligations under an exchange traded contract, for calculating sureties, for auditing traders, detecting errors, mistakes or fraud in a trader's financial statements, for assuring compliance by a trader, for estimating a franchise value of a trader, for making a contract tradable on an exchange, and for managing traders in the contract exchange system.

Abstract: A liquid insurance contract (LIC) comprises a security which is traded or tradable and which has cash flows to the issuer based upon a liability whose exact value is unknown at the time of issuance.

Abstract: Methods and systems are provided for operating a contracts exchange without conventional counterparty risk measures used by existing futures exchanges such as collateral, margin accounts, position limits, price change limits and regular settlement times. Traders on the contracts exchange hold substantially, or exclusively, cash and/or liquid exchange-traded assets or liabilities. Traders maintain transparent balance sheets which can be made available to third parties. A trader holding assets or liabilities that are illiquid or approaching illiquidity should demonstrate diligence in divesting such holdings. The trader's holdings are marked to their fair market value using acceptable accounting standards. Traders may also be required to obtain and maintain surety guarantees.

Abstract: A liquid insurance contract (LIC) comprises a security which is traded or tradable and which has cash flows to the issuer based upon a liability whose exact value is unknown at the time of issuance.

Abstract: A liquid insurance contract (LIC) comprises a security which is traded or tradable and which has cash flows to the issuer based upon a liability whose exact value is unknown at the time of issuance.