Abstract: A paired basis swap risk and credit mitigation system and collateral minimization system. In swaps used to hedge forward contracts a system authority interposes itself and forms paired basis swaps with each of the paired swap participants and itself together with a Swaption to allow it to maintain a level book in the event of a default by any counterparty. In the event of a default the system authority has the ability to either terminate a swap and pay the non-defaulting counterparty an agreed upon termination payment, terminate the non-defaulting counterparty's swap and exercise the swaption to substitute a correlated swap with appropriate correlated termination payment; or substitute a new counterparty with an identical swap as the paired swap participant. Paired basis swap control through delivery can be enabled to continue the risk and credit mitigation benefits of the system.

Abstract: An agency payment system for transactions covered by a virtual market control entity between participants. The system determines all payments required to be made by each virtual market control entity participant on a given day. It nets all of each of the participant's required payments to be made with the payments received by the virtual market control entity on the previous day due to each participant to obtain a net cash movement, either from the virtual market control entity to the participant's account or from the participant's account to the virtual market control entity. It transfers between the participant's account and the virtual market control entity's account and each participant's account the net cash movements to the virtual market control entity's account. It then transfers between the virtual market control entity's account and each participant's account the net cash movements to the participant's account.

Abstract: An agency payment system for transactions covered by a virtual market control entity between participants. The system determines all payments required to be made by each virtual market control entity participant on a given day. It nets all of each of the participant's required payments to be made with the payments received by the virtual market control entity on the previous day due to each participant to obtain a net cash movement, either from the virtual market control entity to the participant's account or from the participant's account to the virtual market control entity. It transfers between the participant's account and the virtual market control entity's account and each participant's account the net cash movements to the virtual market control entity's account. It then transfers between the virtual market control entity's account and each participant's account the net cash movements to the participant's account.

Abstract: A paired basis swap risk and credit mitigation system and collateral minimization system. In swaps used to hedge forward contracts a system authority interposes itself and forms paired basis swaps with each of the paired swap participants and itself together with a Swaption to allow it to maintain a level book in the event of a default by any counterparty. In the event of a default the system authority has the ability to either terminate a swap and pay the non-defaulting counterparty an agreed upon termination payment, terminate the non-defaulting counterparty's swap and exercise the swaption to substitute a correlated swap with appropriate correlated termination payment; or substitute a new counterparty with an identical swap as the paired swap participant. Paired basis swap control through delivery can be enabled to continue the risk and credit mitigation benefits of the system.

Abstract: A paired basis swap risk and credit mitigation system and collateral minimization system. In swaps used to hedge forward contracts a system authority interposes itself and forms paired basis swaps with each of the paired swap participants and itself together with a Swaption to allow it to maintain a level book in the event of a default by any counterparty. In the event of a default the system authority has the ability to either terminate a swap and pay the non-defaulting counterparty an agreed upon termination payment, terminate the non-defaulting counterparty's swap and exercise the swaption to substitute a correlated swap with appropriate correlated termination payment; or substitute a new counterparty with an identical swap as the paired swap participant. Paired basis swap control through delivery can be enabled to continue the risk and credit mitigation benefits of the system.

Abstract: Enabling anonymous negotiations between counterparties via instant messaging protocols, without the need to use client based software, to occur on a fully anonymous basis, through the provision of counterparty credit intermediation and threading of conversations via a masking mechanism. In implementation, the instant message traffic is intermediated by an automated server-based interface which interprets requests for bids or offers and submits such offers to a defined distribution list. The interface then can direct negotiations on an anonymous and automated basis through directed responses and ultimately totally private instant messaging channels.

Abstract: A method of determining whether to allow a new trade of a contract in a system which determines the value of margin amounts supporting trading and evaluates the total value at risk in a portfolio of traded contracts. The system compares the value at risk in the portfolio to the value of margin amounts to calculate the excess available margin. After calculating the allowable notional trade volume, allowable notional trade quantity and the risk per unit of commodity for a new trade it determines whether the new trade has a value at risk which exceeds the excess available margin. It then approves or rejects the trade based upon a determination of whether the value at risk of the new trade exceeds the excess available margin. It also includes a second chance mechanism for rejected trades if the effect of the trade would be to increase the excess available margin of the portfolio.

Abstract: A method for managing, on a pooled basis, the credit risk coverage of contract performance by contracting parties. An aggregate maximum credit risk coverage for all contracts by each contracting party is established. Pools are defined into which contracts from various contracting parties may be aggregated. A credit risk coverage limit is defined for each of the pools. When a contract is entered into the credit risk coverage associated with that contract for each contracting party is calculated and it is determined whether that credit risk coverage plus the risk coverage associated with all other existing contracts of that contracting party are within the maximum credit risk coverage for that contracting party. That determination is then used to decide whether to accept the contract in the pool. The invention is particularly suited to the use with products and services which are illiquid or difficult to inventory, such as electrical power, forestry products and chemical products.

Abstract: A method for managing, on a pooled basis, the credit risk coverage of contract performance by contracting parties. An aggregate maximum credit risk coverage for all contracts by each contracting party is established. Pools are defined into which contracts from various contracting parties may be aggregated. A credit risk coverage limit is defined for each of the pools. When a contract is entered into the credit risk coverage associated with that contract for each contracting party is calculated and it is determined whether that credit risk coverage plus the risk coverage associated with all other existing contracts of that contracting party are within the maximum credit risk coverage for that contracting party. That determination is then used to decide whether to accept the contract in the pool. The invention is particularly suited to the use with products and services which are illiquid or difficult to inventory, such as electrical power, forestry products and chemical products.