TW473680B - Financial products having demand-based, adjustable returns, and trading exchange therefor - Google Patents

Description

473680 A7 ----__ B7 V. Description of the invention (1) Copyright notice of the work (Please read the precautions on the back before taking this page) The content of this file is protected by the copyright of the work. The applicant has no objection to the response to this patent document, as long as it appears in the U.S. Patent and Trademark Office (P τ〇) patent file or record or is published by the U.S. Patent and Trademark Office or a copy of a foreign or international agency. Otherwise the applicant will retain the right of legal prosecution. FIELD OF THE INVENTION The present invention relates to a demand-based transaction system and method. In particular, the present invention relates to a method and system for trading financial products with demand as a basis, and a system and method for determining this profit. Background of the Invention Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs With the rapid increase in usage and the recent popularity of the Internet, the security of online transactions based on electronic networks is receiving increasing attention. In the first issue of 1999, online transactions via the Internet were estimated to have reached 15% of all stock transactions. This volume has grown at a large annual growth rate of 50%. This growth rate is expected to continue to grow in the next few years, just like the growth of online users using online trading accounts. Online trading companies such as E-Trade Group, Charles Schwab, Ameritrade, etc., have all experienced significant increases in revenue from online trading activities. These companies currently provide Internet-based stock trading services. Compared with the services of traditional stockbrokers, these services not only provide the paper size applicable to the Chinese National Standard (CNS) A4 specification (210 X 297 mm)- 4-473680 A7

Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs. 5. Description of the invention (2) More convenience and reduced commissions that many retail customers have to pay. Many expected online transactions can also expand financial products other than equity interests, such as bonds, foreign exchange transactions, and transactions derived from financial instruments. _ Financial products such as stocks, bonds, foreign exchange trading contracts, futures trading and trading options, and contractual assets and liabilities, such as reinsurance amount contracts or interest rate swaps, all involve some degree of risk. This risk exists because these financial products are a multi-factor function, including the uncertainty of future events, such as the decision of the Federal Reserve Bank to increase the discount rate of $, the sudden increase in the price of common supplies, and changes in the Dow Jones Industrial Average. , Or # is an increase in investor dislike of investment risks. In order to make a better analysis of these risks, financial economists usually treat these real-world financial products as a combination of simple problems or hypothetical financial products. If a special situation occurs among all the wow results, these hypothetical financial products are generally designed to pay a unit of money, such as a dollar, to a businessman or investor. The possible results can be said to be in some "states", which are generally caused by the distribution of possible results (such as' the magnitude of the change in the Federal Reserve Bank ’s discount rate), and are caused by real-world events (for example, The decision to change the discount rate). In this hypothetical financial product, a set of states is chosen because these states are mutually exclusive 'and this set collectively covers or exhausts all possible outcomes in the event. By design, this arrangement inevitably makes sure that there must always be a state based on the outcome of the event. These hypothetical financial products (also Arrow-Debreu securities, state-of-the-art paper standards apply the Chinese National Standard (CNS) A4 specification (210 X 297 public love) -5- ^ -------- ^-I ------ line (Please read the notes on the back before filling this page) 473630 Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7____ V. Invention Description (3) Famous for securities or pure securities) is design To isolate and analyze complex risks becomes individual root causes, that is, risks that will occur in an individual state. This hypothetical financial product is useful because these profits from more complex securities, including real-world financial products, can be modeled as a linear combination of the profits of hypothetical financial products. References, for example, R · M e r t ο η, Continuous-Time Finance (1 990), p. 144. As a result, such hypothetical financial products are now often used to provide the cornerstones for analyzing more complex financial products. Over the past fifteen years, the growth of these derived transactions has also been considerable. According to the Federal Reserve Bank, the annual growth rate of foreign exchange transactions and the turnover rate derived from interest rates have climbed upwards by a percentage of 20%. Companies, financial institutions, farmers, and even government agencies have participated in this derived market. Generally, they better manage portfolios of assets and debt securities, avoid safeguard measures taken due to financial market risks, and reduce The cost of small capital, etc. At the same time, financial managers often use derived transactions to hedge risks and bear economic impact, such as the risk of interest rate fluctuations, the risk of foreign exchange transaction rates, the conversion of cash into securities or securities into cash, and spot securities. Transactions, etc. These derivative transactions are also traded on the trading market, such as trading on the Chicago Board of Trade futures selection contract, and two or more derivative buyers and sellers on the over-the-counter or over-the-counter market. In these major transactions that manipulate derivative trading, orders are usually placed either by electronic transmission or by using individual brokers to bargain in the trading market. These individual brokers will usually average or take a hedge later. The paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -6- I ------ I ----- ^- ------- (Please read the notes on the back before filling out this page) 4736 A7 B7 printed by the Consumer Cooperatives of the Intellectual Property Bureau of Sichuan Ministry of Economic Affairs V. Invention Description (4) Transaction methods to protect their own Portfolio of securities to meet risk and profit criteria. Hedge trading is customarily done by buying and selling derivative securities or contracts (for example, futures selection contracts), or similar derivatives (for example, futures that mature in different months). For derivatives that are traded in the over-the-counter market, brokers or traders are accustomed to finding a balance point for asset adjustments in the hands of buyers and sellers based on guidelines and profit standards for risk management in buying and selling. Broadly speaking, the two methods currently used for derivatives in trading are: (1) buying and selling order matching, and (2) summing and capital markets. Buy and sell order matching is based on models such as the Chicago Department of Commerce or the Chicago Mercantile Exchange and some new online trading models. In the method of matching buy and sell orders, the entire transaction dominates the transaction activities of the buyer and seller, so that the "bid" party (buyer) can be matched with the "bid" party (seller). The two parties can make purchases and purchases through online order matching, or conclude transactions through the stock exchange market. Generally speaking, the transaction itself does not have any market risks and can cover the cost of the process it sells to the stockbroker. In order to avoid losses, individual stockbrokers buy into the spot, sell futures ’or buy futures, sell out of stock, so that a spot transaction does not suffer losses due to future price fluctuations. Establish a derivative trading operation in a matching capital market, such as a bank or an intermediary company, capitalize it, and create a trading market by maintaining a derivative portfolio of securities and the underlying position. This market maker usually changes its portfolio of securities for safe-haven transactions on a dynamic basis when market conditions change. Generally speaking, this paper size applies to China National Standard (CNS) A4 (210 X 297 mm) II ------ IIIII · 1111111 ^ · 11111111 3; (Please read the precautions on the back before filling this page) 473680 A7 _____ B7 Printed by the Consumers' Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs V. Invention Description (5) The market consortium will try to make up for the transaction costs and the economic scale caused by the safe-haven exchange of securities to compensate Spending on these jobs. If the market maker is at high market risk, buyers and sellers will also face the risk of bankruptcy. In addition, in theory, the operation of the capital market can be realized in a large regional network. In fact, derivative transactions are usually completed by telephone today. Usually, transaction processing is very troublesome. You must go through the front-end transaction to the back-end processing and settlement. There are many manual steps involved in the transaction process. Theoretically-if transaction costs are ignored (as described below)-it is derived from the terminology of game theory. It is assumed that in the absence of transaction costs, the opposite is actually the nature of the zero sum of the derivative market. The Scholes price model can be established. On the underlying securities, it can exactly reduce the arbitrage in a short period of time. Participating in the market model, by always adjusting the risks in hand. On the contrary, when the total stocks and the company's expected net profit and other changes are "external" factors, this zero-sum characteristic cannot be immediately absent. Trading is a so-called "zero-sum In the case of travel, one party in the transaction gains, and the losses are compensated. In fact, in fact, this first makes the well-known Black-by matching the financial status of compensation through derivatives such as trading options, in order to use market risk . This is the so-called "fieldless buyer and seller, using a complex portfolio of securities to value the market to reduce the market or the market price because, like interest rates, these factors are hedged to the market, so the stock market And in many cases, the profits of a traditional derivative industry are mostly based on the ownership of derivative basis. Set. The stock price is given to the holder on a certain day by the underlying securities, assets, liabilities, or a stock option. This paper is applicable to the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -8-Please read the back Note: Please fill in 1f again to bind this page. Binding 473680 A7 _______________ B7 V. Invention Description (6) (Please read the notes on the back before filling this page). You have the right to choose stocks at a specific transaction price. This price Not the same as the original stock price. In non-financial derivative examples, such as reinsurance contracts, the price is determined by the loss experience of the underlying balance sheet of the insured claim. The price of traditional derivative products is usually determined by the supply and demand of derivatives, based on the underlying securities (it is usually determined by supply and demand itself, such as in the case of insurance, the insured event is an insurance or reinsurance contract). At present, the cost of trading derivative securities (on-market or storefront transactions) and the risk of insurance transfer are higher because of the following reasons, including: (1) credit risk: a party to a derivative (or insurance contract) transaction It is generally assumed that there is a risk of bankruptcy over the life of the derivative (or insurance) contract. Deposit requirements, credit monitoring, and other contractual tools are customarily used to manage derivatives and insure the credit risk of the other party, although these costs can be high. Printed by the Consumer Property Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs (2) Restricted requirements: Regulatory bodies such as the Federal Reserve Bank, the Currency Audit Department, the Commodity Futures Trade Commission, and international groups that promulgate regulations that affect global monetary and financial center banks (For example, Basu committee guidelines) Generally require that institutions dealing with derivatives meet capital requirements and maintain a risk management system. These requirements are taken into consideration by increasing the cost of capital and setting up some restrictions on access to derivative transactions, and therefore increase the cost of derivative transactions to the operator and the end user. In the United States, the regulations of state insurance also impose some requirements on the operation of insurance companies, especially on the two lines of property-accident insurance. The capital requirements can be increased due to the requirements of insurance companies to retain possible future losses, and Regardless of 9-This paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) 4736 Sichuan A7 ___ B7 5. Description of the invention (7) and the factor of interest rate discount. (Please read the notes on the back before filling this page) (3) Liquidity of assets: Derivative traders generally avoid exposure during the entire term of a derivative contract. Effective hedging usually involves the existence of active or liquid markets for the underlying securities and their derivatives throughout the term of the derivative contract. Especially in the event of financial market shocks and instability, markets that normally circulate do not exist to support a well-functioning derivative market. (4) Transaction costs: Dynamic derivative hedging usually requires the parent-exchanges that are drawn continuously over the entire period of the derivatives in the market to avoid or reduce the management risk of a portfolio of derivative transactions or derivative securities. This usually represents the difference between the price paid to the buy / sell between each hedging transaction. This difference is compared with the theoretically no need to pay the difference or similar costs. It may add a lot more to the price of the derivative securities at the beginning. . Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs (5) Settlement and calculation costs: transfers, electronic appointment trading, settlement and calculation-derived transactions. The cost of transactions may be large, and sometimes requires analytical capabilities and a database Software systems, and personnel knowledge of such transactions. Although one of the many goals in the securities processing industry is to achieve the "consistent operation" of derivative transactions, many derivative parties continue to use electronic and manual trading processes. The methods of these transactions are not integrated or automated. This also increases this cost. (6) Event risk: Most traders understand the efficient derivative hedging transaction to obtain the market, and the market circulation and continuous change of the borrowing format are not necessary, and there is no sudden huge change. When in the period of financial crisis and market imbalance, it is not unusual for the underlying securities price to fluctuate by 50% or more within a few hours. This crisis appears -10- This paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7-__—____ B7 V. Description of the invention (8) And the event risk caused by market imbalance is customarily broken down into derivative prices by traders. This risk increases the cost of derivatives and exceeds the theoretical price calculated in the derivative price model. These costs are usually spread across all spin-off users. (7) Model risk: It may be very difficult to evaluate the price of derivative contracts, especially those that involve interest rates or have features that allow one party to determine the lifetime of the derivative (for example, the United States option, during any period of the contract term, Allow one party to recognize the value of the derivative). Derivative traders generally add a margin or equity to the derivative price to ensure that the precautionary price model may not properly reflect the costs caused by market factors or other conditions during the contract period. In addition, managing guidelines risks may require companies to maintain additional capital to support a derivative transaction, where model risk is an important factor. Model risk is also a big factor in a well-known example, such as, for example, the loss of Joe Jett / Kidder Peabody in 194, because its sophisticated security risk management system provides an incorrect or incomplete Information. (8) Asymmetric information: Derivative traders and market makers are accustomed to seek out a counterparty to protect themselves from the counterparty with dominant information. The bid-sell transaction will share the derivative costs, so a security interest is usually generated as a result of the transaction between the trader and the counterparty with the dominant information. This security equity may lead to some non-profit transactions. Traditional insurance markets also suffer from costs caused by asymmetric information. In the two lines of property-accident insurance, the direct underwriters of insurance almost always have an advantage over the reinsurance record — — — — — — — — — — — — IIIIIII ^^ 1111111 ^^ (Please read the notes on the back before filling in this page) This paper size applies to China National Standard (CNS) A4 (210 X 297 mm) -11- Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 B7 V. Description of the invention (9) Information. This is just like the situation in the capital market where reinsurers generally add the price of unfavorable information to their reinsurance guarantee equity. '(9) Incomplete markets: Traditional capital and insurance markets are usually considered incomplete in terms of occasional requests with limited amplitude. For example, the market may not actively offer opportunities to deal with all risks. Safe-haven investment, because the opportunity for safe-haven investment is to look for yourself. As a result, participants generally either take inefficient risks or use sub-optimal tools for transfers or hedge investments to combat risks. For example, some investors want to hedge their investments due to inflation, which has led to the insurance of some government-linked inflation bonds with coupons and capital, which are related to the level of the consumer price index (CPI) . This provides some level of insurance against inflation risks. However, holders of such bonds often make assumptions about future real interest rates and interest rates on par. An imperfect correlation between infrequent requests (in this case, bonds associated with inflation) and infrequent events (inflation) leads to what traders call "basic risk". This risk in today's market is There is no way to be completely protected or able to be avoided. At present, transaction costs still cannot be ignored in the traditional insurance and reinsurance markets. In recent years, considerable efforts have been devoted to attempts to stabilize insurance risks, such as the disaster risk of property-accident insurance. The traditional insurance and reinsurance markets are, in many respects, very much like capital forex trading banks' and suffer from many of the same shortages and bear the same costs for many operations. Generally speaking, the risk exists naturally with the transfer of the contract. The paper size of the counterparty's credit is subject to the Chinese National Standard (CNS) A4 (210 X 297 mm) -12- I I -------- IIIII — I t ·! 1! 11- * 5 ^ (Please read the notes on the back before filling out this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 4736 7 A7 B7 V. Description of the invention (10) Monitored and complex risk management systems are used and maintained. The degree of capitalization of insurance portfolios used to support assets and liabilities may leave the equilibrium point at any given time because of constant prices, asymmetric information and fees, and restrictions on established rules. In short, despite the market shock caused by the Lloyds crisis in late 80s and early 90s, there can be a trend that has prevailed for decades in the insurance and reinsurance markets, which is that it is very easy to operate based on the same market functions the trend of. Therefore, a driving force behind all contributions to derivative and insurance contract fees is the necessity and urgent need for risk management in a continuous, circulating, and information fair market through dynamic hedge investments or occasional request responses. Come. Hedged investments are used by derivative traders to reduce their exposure to excessive market risk when transaction fees are used to cover their capital and ongoing operations; and effective hedging investments have gained liquidity. In a recent patent case, in an electronic order matching system (US Patent Case Nos. 5 8, 5 4 5 and 2 6 6), the problem of liquidity in financial markets has been pointed out. The basic technology for improving the liquidity disclosed in this content is to increase the participation and trading volume in the system and solicit the advice of traders on the preference of a certain type of securities trading price and quantity combination. However, these techniques have some disadvantages. First of all, these technologies provide the operation of matching buy and sell orders and limited registration, which may and can be effectively applied to the traditional “brick and stucco” exchange mode. However, their electronic technology implementation was mainly used to save transportation and telecommunication liaison fees. The change in the market structure foundation has not been taken into account, but this may be very important for electronic networks. The paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm): 13- " ^- ------ ^ --------- ^ (Please read the notes on the back before filling this page)

47363U Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economy Α7 Β7 V. Description of Invention (11). Second, the technology disclosed in this content costs the burden of putting a lot of information on the trader (for example, advice to the trader on the overall price and quantity combination preferences), and proposes the correct price after a transaction is completed The uncertainty seems to improve liquidity. Finally, these electronic buying and selling order matching systems consider a traditional pairing of buyers and sellers, that is, the actual holding of securities is often converted and settled after the parties confirm the matching. In other words, the technology disclosed in this content for the electronic buying and selling order matching system is indeed elaborate on the basic question of how to find the optimization of the bid-sale matching array process. Derivative-related patents, such as U.S. Patent No. 4,903,201, describe an electronic modification that is currently used for public auction transactions or order-matching exchanges of futures. Another recent patent, U.S. Patent No. 5,806,04.8, relates to products that provide open-end mutual fund derivative securities that enhance liquidity and improve information and affect price effectiveness. However, this patent does not take into account that an electronic derivative transaction requires traditional hedging investments or a simulated portfolio to analyze financial derivative transactions. Similarly, U.S. Patent Case No. 5, 7 94, 2 0 7 suggests an electronic device that can match the buyer's bid and the seller's sale, but does not explain the nature of the economic price equilibrium point obtained through this market transaction process. . Summary of the Invention The present invention is directed to a person who has a risk-averse investment for market participants or invests in a contingent right (accidental compensation) related to a major economic event, and reduces the paper size to the Chinese National Standard (CNS) A4 specification (210 X 297 (Mm) -14- (Please read the precautions on the back before filling out this page) • Installation ------ 1— Order · — — — — — — I- Printed by the Consumer Cooperative of Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 ----—___ B7 V. Description of the Invention (12) The system and method of the transaction of paternity cost, and its financial products. This requirement is based on their expenditure, or profit, on the outcome of an observation event with more than one outcome. These requirements are incidental to expenditures and incomes' and are dependent on the outcome of an observation event with more than one outcome. Even if investors and traders do not invest or trade in contingent related events ’, this generally does not mean that investors and traders are indifferent to these economically significant events. Users who intend to use this preferred and other embodiment are generally investors in public bodies, such as financial institutions including banks, investment banks, original insurance companies and reinsurers, and company accounting tellers. Users can include individuals and any individual who needs a risk allocation service. When used in this description, the terms "user", "trader", "investor," are used interchangeably to describe any institution that wants to trade or invest in a contingent or other financial product that has the above description , Individual or individual. These contingent rights attached to an event have a trading term so that the profit of each limited state can be completed, these states include one result or a collection of results in the event, and observe this The event is based on this or other time period with rights. In the present invention, these contingent profits, during the trading period, the distribution of the total amount of investment in each state will be adjusted. The profit payable for each state is between Each relevant transaction period will be followed by an end. In a preferred embodiment, the total investment amount minus the transaction cost of a transaction is equal to the sum of the expenditures. In other words, theoretically, it is established when a particular transaction period And all contingent rights attached to a particular event, basically like this paper scale Use Chinese National Standard (CNS) A4 specification (210 X 297 mm) -15 _ — — — — — — — — — — — 1 1111111 ^! — — — — — — (Please read the notes on the back first (Fill in this page again) 473680 A7 _B7 V. Description of the invention (13) is the same as the traditional derivative market. (Please read the notes on the back before filling this page) The process of making profits in the present invention is based on demand. Basic, and essentially nothing to do with supply. In contrast, the traditional market sets prices through the buy / sell interaction of supply-demand transactions. In the present invention, demand-based or entitlement functions Profits set profit to successful money-making investments' set losses to unsuccessful money-losing investments. Therefore, in a preferred embodiment, the profits of these successful money-making investments are injected by all investments at every designated observation event State, all, and the total amount of money to make a decision. Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs when used in this description, the term "contingent rights" has a meaning It is customarily attributed to securities, trading, insurance, and economic communities. "Contingent rights" therefore include, for example, stocks, bonds and other securities, derivative securities, insurance contracts and reinsurance contracts, and any other Financial products and tools. , Contracts, assets, or liabilities, the price of which depends on or reflects the economic risks that arise from events in the real world. These events may be financial-related events, such as changes in interest rates, or events not related to finance, such as changes in weather, electricity demand, and fluctuations in real estate prices. Contingent rights also include all economic or financial interest rates, whether they are traded or not, whether they have or reflect potential risks or because of uncertainty about events in the future world. Examples of contingent economic or financial interest rates that have not been traded in traditional markets include financial products that change as the company's income fluctuates or real estate prices change and leases change. The term “contingent rights” is used in this description to include Arrow-Debreu's various hypothetical financial products, and any risky assets, contracts, or products that can apply Chinese National Standards (CNS) at -16-paper scale A4 specifications (210 X 297 mm) 4? 36 ^ υ A7 B7 Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs. 5. Description of the invention (14) A hypothetical combination of financial products or investment portfolio. The purpose of this note is that investing in or trading a contingent right is an act of putting a sum of money whose price unit is determined by the contingent right into a risk that has a profit that depends on the outcome of a major economic event. The result is potential in the contingent rights attached to this event. "Hedged securities" (which can be used interchangeably with "hedged investments") also have the meaning of belonging to a common group of securities, trading, insurance, and economics. This includes a security or contract whose price depends on factors such as the price of the underlying securities, the index, assets, and liabilities, or characteristics of the underlying security, such as interest rates or conversion to other securities. Derivative securities are an example of the above-mentioned contingent rights. Financial characteristics such as S & P 500 or options to buy and sell futures contracts on stock price indexes are extremely popular financial derivatives for trading. The exchange of interest rates is an example of an OTC derivative. It is an agreement between buyers and sellers based on potential factors of cash flow, such as the London Interbank Loan Interest Rate which quotes a large amount of foreign currency circulation in London every day. Just like buying-trading futures and options, over-the-counter agreements may change in price due to some underlying factors or due to underlying factors. Derivatives can also be traded in consumer goods, insurance events, and other events such as weather. In this description, the function of calculating and distributing profits to contingent rights is called the function of demand redistribution (DRF). The function of demand redistribution is a demand-based event that involves the redistribution of profits to investments in each state. After the results of the observed events have been known, the successful investment compensation to the unsuccessful investment loss On (Applicable to China National Standard (CNS) A4 specifications (210 X 297 public love) in transaction or delivery paper size) Γ 交 7- '-------------------- II Order! I II --- (Please read the notes on the back before filling out this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 ---- B7 V. Description of the invention (15) After changing the cost). Since an adjustable profit based on the type of the total amount invested is an important point of the invention, the use of a demand redistribution function to supplement contingent rights will be referred to as demand-based adjustable profit (DBAR). For a group of DBAR contingent trading systems, the better features (the requirements for belonging to the same group of events) include the following: (1) The distribution of an entire state is open to investment, not as traditional The market has only a single price; (2) the profit is adjustable and is determined mathematically based on the total amount of investment available to invest in each state. (3) It is best not to reduce the total amount of investment (as described below) 'Provide a market with a commitment to provide liquidity in the state distribution, and (4) Information can be used in the time distribution across the state, especially Is information that is included in the total amount of investment distributed across all states (commonly referred to as a "limit order increase"). Other results of the preferred embodiment of the present invention include (1) reducing order matching in the market or by bidding and selling this type of transaction; (2) reducing the use of market matchmakers to manage and handle dynamic hedge investments and The need for risk management; and (3) more avoidance. Opportunities for risk investment and insurance for major economic events (ie, “completion” in more markets). The other preferred embodiments of the present invention are able to reconcile the realisation and loss of a trader's profit before knowing all of the criteria before ending these contingent rights. This is accomplished by arranging periods of several transactions, each with its own set of final profits. Profit or loss can be realized or “locked in” at the end of each trading session, as opposed to waiting for the basic paper size to apply the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -18- --- ---- I ----- install · ----- II Order ---. Line (Please read the notes on the back before filling this page) 473680 A7 __B7 V. Description of Invention (16) The final result in the contingent event is the same. This locked-in phenomenon can be achieved by investing in safe-haven investments in consecutive periods when profits change, or adjusting hedge-investments in different periods. In this way, the time / profit or loss can be realized on a gradual development basis (limited only to the frequency and length of the time period), so that traders can achieve the same, or compared with the traditional market can use, there are More transactions and the frequency of hedge investments. If desired, issuers such as company names, investment companies, insurers, or other financial brokers can create a security with a similar method of contingent use as D B A R in the present invention. For example, a company can issue a bond with a profit associated with investment risk. The issuer can solicit the transaction and calculate this profit based on the total number of contingent investments corresponding to the status of each stage or insurance risk. In a preferred embodiment of the present invention, changes in profits invested in one state will affect the distribution of a group of contingent profits in the same state in other states. Therefore, the profit of a trader will not only depend on the actual results of the real world and observation of events, but also on the order of other traders ------------------------- ------- line (please read the notes on the back before writing this page) The improper direction of printed dot-shaped grids and rigorous views on the market by the Intellectual Property Bureau of the Ministry of Economic Affairs, the Consumer Cooperatives, and R-funds in the market A and the market, the order B, and the market distribution and application of D D. R. The profitability of the order A. The order B is the same as that of D, which has more reasons below. Biography.的 发 发 R} By the choice of funds, this field A will be voted for. The city of B is easy to change due to the lack of D. The trade fair will reduce the risk of the risk. Run Ying Yi will provide funds to support the brigade to the support of the transfer, and the state of affairs will be used for survival. Each person who has changed the risk to avoid the need for more than one can avoid the existence of all the people in the middle, and only build their own cable to build the office, and explore the state {On the paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 (Mm) -19- Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473630 A7 _ B7 V. Description of the invention (17) The high cost of the market structure of the market matchmaker can therefore be reduced. Therefore, with the market completed by the system and method of the present invention, electronic operations in a wide range of networks are particularly tried, such as the Internet. In this preferred embodiment, the present invention reduces the derivative transaction costs that would occur in traditional markets due to active hedging transactions and order matching. A preferred embodiment of the present invention provides a transaction or entitlement system, which is constructed on the basis of DBAR theory, in which the total amount of each state invested in a group of DBAR or entitlements is made by unsuccessful investments In accordance with the limited rules, after deducting the transaction cost of the transaction, it is reallocated to the successful investment. In particular, the operator of this system or transaction provides a ground and electronic basis for the entity that is used to guide the trading of the transaction, collects and integrates the investment, calculates the profits derived from this investment, minus the system's operation of the transaction. After the expenses, then the funds of the unsuccessful investment are allocated to the successful investment profits. In these preferred embodiments, where the loss of the unsuccessful investment is invested with the funds of the successful investment, the profit of all transactions is related, and the trader invests in each item, assuming that the risk opportunity Will produce results. Contingent rights to a group of D B A R that depend on a particular event, all traders become buyers and sellers of each other, thus leading to an interoperability of interest rates. In addition, in this preferred embodiment of the present invention, the planned profit, which is prevalent at the time of investment, may not be the same as the final expenditure or the profit after the outcome of the related event. In contrast, a large number of traditional derivative markets operate within an internal "bank" system. In this system, the market matchmaker usually has a buyer and seller who apply the Chinese paper standard (CNS) A4 specification (210 X 297 mm) to this paper. -20- — — — — — — — — — — — — · 1111111 ^ — — — — — — — — (Please read the notes on the back before filling this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 B7 V. Description of the invention (18) The function of measures, They usually pay a price for investors to buy or sell. If a particular investor buys or sells at this price, the final profit of this investor is based on this price, and it is easy to get this price compared with the price that investors later bought and sold, and compared with the previous transaction price, we will get Investor profits. When the market matchmaker has been unable to make up for the order to buy or sell, or wants to maintain a certain level of risk on the expected profit, this will usually encounter some changing market risk (and in some cases, credit risk). In a traditional derivative market, market matchmakers who match buy and sell orders generally rely on actual benefits, bid-sale allocation, a large capital base, and hedge investments (risk management) to expose The chance of bankruptcy caused by market risks is minimized. Each parent EBay system usually has only one counterparty—the market matchmaker, the exchange rate, or the counterparty to the transaction (for example, derivatives of OTC transactions in this case). On the contrary, because a DBAR or entitlement market may operate on the principle of injecting unsuccessful investment funds into the profits of successful investments, the exchange itself is used to reduce the risk of loss and thus reduce its risk. Need to go to the market to buy and sell hedged investments. In the preferred embodiment of the D B A R of the present invention, dynamic hedging transactions or bid-sell cross-type transactions are generally not required, and the probability of bankruptcy of exchange rates or market matchmakers will be reduced to almost zero. Such a system would take the risk of the bankruptcy of the exchange or market matchmaker and all traders in the system. The entire system provides a high degree of self-hedging investment and actually reduces the risk of market failure due to market risk. A DBAR or the right exchange may be available at the same time ---------------------- ^ --------- ^ (Please read the note on the back first Please fill in this page again for this matter) This paper size is applicable to China National Standard (CNS) A4 (210 X 297 mm) -21-473680 A7 B7 printed by the Employees' Cooperative of Intellectual Property Bureau of the Ministry of Economic Affairs "Self settlement" and lower-level organizations that need a bit of settlement (such as clearers, administrators, current / current bank account numbers, and people who transfer and register). A derivative trading system or exchange structure based on the DBA or contingent principle provides more advantages than many derivative markets currently managed by the internal banking principle. The difference between the present invention and the gambling system under the electronic or gambling distribution method is described in the aforementioned techniques (i.e., U.S. Patent Nos. 5,873,782 and 5,749,785). In a betting system or a game of luck, gamblers will basically be indifferent to the results that occur (assuming that the gambler does not own a casino or racetrack or raise horses, etc.). The difference between a game of luck and an economically significant event in the financial market is well known and understood. In summary, the present invention provides systems and methods for guiding demand-based transactions. A preferred embodiment of the invention that provides a method for guiding demand-based transactions includes the following steps: (a) establishing a number of defined states and a number of predetermined termination criteria, each of which defines a state It is at least consistent with the possible outcome of an important economic event; (b) accepting the investment of several traders' monetary units in this limited state; and (c) allocating expenditures to each investment. This allocation step responds to the total amount of money units invested in a defined state, the relative proportion invested in each defined state, and the identification of a defined state when all termination conditions are fulfilled. Another preferred embodiment of the present invention that provides a method for guiding demand-based transactions includes steps of establishment, acceptance, and distribution. This paper size applies to China National Standard (CNS) A4 (210 X 297 mm) --------------------— Order --- — — — — — (Please read the precautions on the back before filling out this page) 473680 Printed by the Consumers ’Cooperative of Intellectual Property Bureau of the Ministry of Economic Affairs Α7 Β7 V. Description of the Invention (2) The steps of establishment include the establishment of several limited states and Several predetermined termination criteria. Each defined state 'when each terminated standard is fulfilled' is consistent with a possible state of a selected financial product. This step of acceptance includes the investment of a unit of money in a limited state by several parents, and the step of allocation includes allocating expenditure to each investment. This allocation step responds to the total amount of money units invested in a limited state, the relative proportion of investment in each limited state, and the identification of a limited state when all termination conditions are fulfilled. A preferred embodiment of a method of guiding demand-based transactions in the present invention, in which the expenditure from each state to each investment is fulfilled at all termination conditions without a probability of occurring equal to zero 'and the expenditure is made to all The sum of investments will not be greater than the total amount of money units invested in a limited state. In the latter preferred embodiment, 'the sum of expenditures to all investments is equal to the total amount of money units invested to a limited state' minus a fee. 0 A preferred embodiment of a method for directing demand-based transactions The investment of at least one money unit indicates a set of limited states, and an investment return is expected from the set of limited states indicated thereby. In these preferred embodiments, this allocation step is more responsive to the expected return on investment from the set of states indicated by the indication. In another preferred embodiment of a method for guiding demand-based transactions, the method further includes the step of capital calculations at risk by the investment of at least one trader in at least one unit of money. In this paper size, the Chinese National Standard (CNS) A4 specification (210 X 297 mm) is applicable. _-------------- ^ ------- — — — — til ---- I · Line (Please read the notes on the back before filling this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 Α7 ----- Β7 V. Description of the Invention (21) An alternative preferred embodiment The steps of calculating the capital in the risk state include the use of the method of the capital in the risk state and the price in the risk state. Experimental Method. In a preferred embodiment of one of the methods based on demand, the method further includes the step of calculating the credit capital at risk by the investment of at least one trader in at least one monetary unit. . In an alternative and further preferred embodiment, the steps of calculating credit capital in a risk state include the use of credit capital in a risk state, a method of price in a risk state, and Monte Carlo statistics of credit capital in a risk state Test simulation experiment method, or credit data under risk state simulation experiment method. In a preferred embodiment of the method for directing demand-based transactions in the present invention, at least one investment in money is a multi-state investment that is assigned to a limited set of states. In a further preferred embodiment, an investment designated to an expected profit multi-state has a profit that is responsive to a specified set of defined states, and the distribution step is further responsive to the expected profit. In a further preferred embodiment, each of the expected profits is responsive to a sub-set of a specified set of defined states. In an alternative, preferred embodiment, this expected profit is roughly consistent with the expected profit from a limited set of states from a previously detailed investment vehicle, such as a particular purchase option. Comparison of one method of guiding demand-based transactions in the present invention ----------- II ---- I --- order ------- I (Please read the back first Please note this page and fill in this page) This paper size is applicable to China National Standard (CNS) A4 (210 X 297 mm) -24-473680 A7 ______ B7 V. Description of Invention (22) (Please read the precautions on the back before (Fill in this page) The preferred embodiment 'This distribution step includes the following steps (a) calculating the number of money units required for the multi-state investment of the specified expected profit, and (b) allocating the number of money units for the multi-state investment, It is assigned to a set of a limited number of states to know the expected profit. In a further preferred embodiment, 'this allocation step includes a step of solving a set of simultaneous equations related to the transaction volume and unit dollar expenditure and the allocation of expenditures; and the calculation step and the allocation step are related to the solution step. Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economics A preferred embodiment of a method for guiding demand-based transactions in the present invention. This solution step includes the steps of iterative calculation of fixed points. In a further preferred embodiment, the step of the fixed-point iterative calculation includes the following steps: (a) selecting an equation of the above-mentioned set of simultaneous equations, the equation having one and at least one independent variable; (b) specifying an arbitrary Up to each independent variable of the selected equation; (c) Calculate the independent variable in the selected equation and respond to the 指定 currently assigned to each independent variable; (d) specify the calculation of this independent variable such that each independent variable Variables; (e) designate one of the equations in the set of simultaneous equations as the selected equation; and (f) continuously perform this step of finding 此, this specifying the step of calculating 値, and the step of specifying the equation until The straight convergence of each variable. In the present invention, a preferred embodiment for measuring the state probability in a demand-based transaction method includes the following steps: (a) executing a state with a number of limits and a number of predetermined termination criteria A demand-based trading method, in which the unit of money invested by each of the many traders will be at least in a restricted state. -25- This paper size applies the Chinese National Standard (CNS) A4 specification ( 210 X 297 mm) 473630 Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7 V. A state of invention description (23) is accepted, and at least one of these limited states will be at least one of a major economic event The possible results are consistent; (b) the number of monetary units relative to the monitoring investment in each limited state; (c) for the monitoring step, it is estimated that a selected limited state will become this limited after completing all termination criteria Chance of state. Based on demand. Another preferred embodiment of a state-based transaction method for measuring the probability of a state includes steps of execution, monitoring, and estimation. This execution step includes the steps of executing a demand-based trading method with several limited states and several predetermined termination criteria, in which the unit of money invested by each of the many traders will at least be One of the restricted states is accepted; and each of the restricted states, when each termination standard is fulfilled, corresponds to a possible state of a selected financial product. This monitoring step includes monitoring the number of investments relative to a monetary unit in each of the defined states. Compared with the monitoring step, this estimation step includes estimating the probability that a selected restricted state will become the restricted state after completing all termination criteria. In the present invention, a preferred embodiment for improving liquidity in a demand-based transaction method includes implementing a demand-based approach with a number of defined states and a number of predetermined termination criteria. The steps of the basic trading method, in which a unit of money invested by each of the many traders will be accepted in at least one of the restricted states, and any unit of money invested shall not be taken after acceptance Back: Every limited state corresponds to at least one of the possible economic events. Used in a demand-based trading method --II ---- — — — — —-I --- I I I Order! I! — — · (Please read the notes on the back before copying this page) This paper size applies to China National Standard (CNS) A4 (210 X 297 mm) · 26-473680 Employee Consumer Cooperatives, Intellectual Property Bureau, Ministry of Economic Affairs Print A7 B7 V. Description of the invention (24) A further preferred embodiment for improving liquidity, including steps for safe-haven investment. The steps of this safe-haven investment include the safe-haven investment made by the trader's previous investment of money units, which investment is made by creating a new investment of money-units to one or more restricted states with no previous investment. An additional preferred embodiment for improving liquidity in a demand-based transaction method includes executing a demand-based transaction with a number of defined states and a number of predetermined termination criteria The steps of the method in which a unit of money invested by each of the many traders will be accepted in at least one of the limited states, and any unit of money invested cannot be retrieved after being accepted, and Each of the defined states is in accordance with a possible state of a selected financial product when each final standard is fulfilled. A further preferred embodiment for improving liquidity in a demand-based trading method includes steps for safe-haven investments. The steps of this safe-haven investment include the safe-haven investment made by the trader's previous monetary unit's investment. This investment is made by creating a new monetary unit of investment to one or more restricted states that have not previously invested. A preferred embodiment of a method for guiding quasi-continuous demand-based transactions includes the following steps: (a) establishing a number of defined states and a number of predetermined termination criteria, each of which is at least related to The possible outcomes of an event are consistent; (b) guide a number of trading cycles, each of which includes, within a previously defined trading period and before fulfilling all termination criteria, 'by each of the many traders There is a money list for investment in at least one limited state ----------- II ----------------- ^ (Please read the note on the back first Please fill in this page again for this matter) This paper size is applicable to the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -27-473680 A7 B7 printed by the Consumers' Cooperative of Intellectual Property Bureau of the Ministry of Economic Affairs 5. Description of invention (25) digits; And (c) allocating expenditure to each investment. The steps of this allocation are the total amount of money units invested in a defined state during each transaction period; the relative proportions invested in each defined state during each transaction period; and when all termination conditions are fulfilled 'Restricted state recognition and so on. In a further preferred embodiment that guides a method in a quasi-continuous demand-based transaction, this previously defined transaction period is continuous and there is no overlap. The preferred embodiment of the system of the present invention relates to the use of electronic technologies such as computers, computerized databases, and telecommunications systems to assist in guiding the method of demand-based transactions of the present invention. A preferred embodiment of a system for guiding demand-based transactions in the present invention, this step includes (a) prior to fulfilling all termination criteria, to accept acceptance by a large number of traders in at least a restricted state The instruments of a unit of money invested by a state, each state of which will correspond to at least one possible outcome of an economic major event; (b) an instrument used to allocate expenditures to each investment. This allocation step responds to the total amount of money units invested in a defined state, the relative proportion of investments invested in each of the defined states, and the identification of a 'fixed state' when all termination conditions are fulfilled. . Another preferred embodiment of a system for directing demand-based transactions in the present invention includes (a) 'Before all termination criteria are fulfilled,' is used to accept one of a number of states in at least one of a number of traders The instrument of a unit of money for state investment, each state of which will correspond to a possible state of a selected financial product, when the paper size of each final specimen applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) ) -28- Packing -------- Order --------- Line (Please read the notes on the back before filling this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 — ______B7 V. Description of the invention (26) When the performance is expected; (b) A tool used to allocate expenditures to each investment. This allocation step responds to the total amount of money units invested in a limited state, the relative proportion of investment in each limited state, and the identification of a limited state when all termination conditions are fulfilled. A preferred embodiment of the demand-based trading device in the present invention includes (a) an interface processor for contacting a number of traders and market information systems; (b) an interface processor for connecting with a plurality of traders and a market information system; A demand-based transaction processor linked to the transaction status database. This demand-based transaction processor maintains the transaction status database and process, reflects the market data system and one of many traders 'demand-based transactions' and reflects the transaction status database and demand-based transactions. . In a further preferred embodiment of the demand-based transaction device in the present invention, maintaining the transaction status database includes (a) establishing a standard with contingent rights in a limited number of states, a number of predetermined termination criteria, and At least one trading period, each of which has a defined status that is consistent with at least one possible outcome of a major economic event; (b) response to demand-based transactions, recorded by one of many traders, Investment in a unit of money in at least one of a number of restricted states; (c) response to the total number of units of money invested in a number of restricted states during each transaction period and investment in The response of the relative monetary unit of each of the many limited states to the final profit is calculated at the end of each trading period; and (d) identification of the limited state after the fulfillment of all termination standards and its response The response of the final profit determines one of its many traders ---- I ----- Order--I --- -II (Please read the precautions on the back before transcripting this page) This paper size is applicable to China National Standard (CNS) A4 (210 X 297 mm) _ 29-473680 Printed by A7, Employees ’Cooperative of Intellectual Property Bureau, Ministry of Economic Affairs B7 V. Description of the invention (27) Trader's expenditure; and processing this demand-based transaction includes accepting at least one of a number of limited states during the trading period, and a unit of money of one of the many traders. investment. j. In a further alternative preferred embodiment of the demand-based transaction device of the present invention, maintaining the transaction status database includes (a) establishing a number of limited status or rights, and several predetermined terminations. Standards, and at least one trading period, each of which defines a state that is at least consistent with a possible occurrence of a selected financial product when each final standard is fulfilled; (b) a response to a demand-based transaction, Record the investment of one unit of money by one of the many traders, at least in one of the many restricted states; (c) the total number of units of money invested in the plurality of restricted states during each transaction period Response and response to the relative monetary unit invested in each of a number of limited states during each trading period, calculating the final profit at the end of each trading period; and (d) for all termination criteria The identification of the limited status after the performance and the response to this final profit determine its many transactions The expenditure of a trader; and process this demand-based transactions include transactions during the receiving state in a number of defining at least one state is defined by the monetary unit of a trader in many traders investment. In a further preferred embodiment of the demand-based trading device of the present invention, maintaining the transaction status database includes calculating an estimate of profit; processing this demand-based transaction includes providing an estimate of this profit; Response to demand-based transactions. This paper size applies to China National Standard (CNS) A4 (210 X 297 mm) -30- --- Illlllllll · 1111111 ^ 11111--I (Please read the precautions on the back before filling this page) Intellectual Property of the Ministry of Economic Affairs Printed by the Bureau ’s Consumer Cooperatives 473600 A7 _____ B7 V. Description of the Invention (28) In a further preferred embodiment of the demand-based trading device of the present invention, maintaining the transaction status database includes calculating risk estimates. ; Processing this demand-based transaction includes providing an estimate of this risk, and response to demand-based transactions. In a further preferred embodiment of the demand-based transaction device of the present invention, the demand-based transaction includes a multi-state investment 'which specifies a set of expected expenditure allocations and their constituent states; and maintenance The transaction status database includes a collection of units of money allocated to this constituent state to create this expected expenditure allocation, a response to this multi-state investment. An object of the present invention is to provide systems and methods to support and help the structure of a market for contingent rights related to observable economic events. In addition to the above, it includes one or more of the following advantages: :. 1 · Ready to use electronic computing and network technology to assist and support; 2 · Reduce or eliminate the need to match buy / sell methods to create a derivative market; 3 · Reduce or eliminate derivative intermediaries that match buy / sell methods Demand 4 · Used in demand-based or contingent calculations of profit with rights and consistent calculations; 5 · Increased liquidity; 6 · Disperse the credit risk of the interrelationships of multiple counterparties through multiple derivatives This paper applies to China National Standard (CNS) A4 Specification (210 X 297 mm) -31-— — — — — — — — — — — —.  IIIIIII -1111111- (Please read the notes on the back before filling out this page) 473680 A7 __B7 V. Description of the Invention (29) 7 · By reducing the number of potential asking methods and investment requirements linked to contingent rights in the past, Improve the ability to scale. (Please read the precautions on the back before filling out this page) 8 · Increased price transparency; 9 · Improved efficiency of information collection function; 1 ◦ Reduction of event risk, such as the risk of a crash in a discontinuous market event; 1 1 · Combine the opportunity of circulating bids to the market; and 1 2 · Reduce the motivation of traders for strategic behavior. A further object of the present invention is to provide a system and method for contingent electronic transactions related to observable major economic events, which include one or more of the following advantages: 1. Reduce transaction costs, including with derivatives Settlement and calculation costs related to transaction and insurance requirements; 2 · Reduce reliance on complex valuation models and derivative risk management for transactions; Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 3 · Reduce one transaction or Market makers need to manage market risk through hedging transactions; 4 · Increase the correct and real-time information of traders in contingent transactions, including information about the total amount of investment in all major economic events, and include different Information on time slots; 5. Reduce the credit risk arising from the exposure of the exchange; 6 • Increase the validity of the information on credit risk and market risk assumed by contingent traders. -32- This paper size is in accordance with China National Standard (CNS) A4 (210 X 297 mm) 473680 A7 __ B7 V. Description of the invention (30) 7. Increase the effectiveness of information on profit margins of transactions and investments that can be instantly displayed after profit adjustments within a trading period; 8. Reduce the need for derivative agencies or exchanges to match buy / sell; and 9. Increasing the ability to customize D B A R spending to allow traditional financial products and their derivatives to respond. Part of the additional objects and advantages of the present invention are listed in the following description, and part of the description is very obvious, or can be obtained through the practice of the present invention. The object and advantages of the present invention can also be understood and obtained through some tools, systems, methods, and steps listed in the scope of patent application in the appendix. Brief description of the figures The following drawings are combined with the description and are a part of the description, and illustrate the embodiments of the present invention in a diagrammatic manner, and are used together with the description to explain the principle of the invention. FIG. 1 is a schematic diagram of various forms of a preferred embodiment of a D B A R trader client and a D B A R or a right to trade auxiliary telecommunications in the present invention. Fig. 2 is a schematic diagram of a central controller of a preferred embodiment of a DBA or entitlement transaction network structure in the present invention. Figure 3 is an essential description of the transaction process in a preferred embodiment of a DBA R contingent transaction. Figure 4 depicts a preferred implementation of a D B A R or entitled transaction. The paper size applies the Chinese National Standard (CNS) A4 (210 X 297 mm) (Please read the precautions on the back before filling this page)

-· · I I I I I I I Order · I I I I Hei / · Printed by the Consumer Cooperative of Intellectual Property Bureau of the Ministry of Economic Affairs -33- 473680 A7 _________ _ B7 V. Description of the invention (31) The data storage device. Figure 5 is a flowchart illustrating the processing of a preferred embodiment of a DBAR or entitlement transaction in the execution of a DBAR range derivative investment. Figure 6 is an example of a preferred embodiment of a DBAR or entitlement exchange Η TML interface web page. Figure 7 is a schematic diagram of the market data flow of a preferred embodiment of a D B A R or rights trading network structure in the present invention. Figure 8 is an example of the effect on a group of D B A R or the liquidity that it has the right to imply. Figure 9a is a key illustration of a traditional interest rate exchange process. Figure 9b shows an example of the relationship between D B A R or a rightful investor. Figure 9c is a chart of each investor's d B A R contingent credit rating and earnings transactions illustrated by an example. Figure 10 is a schematic diagram of a feedback process used in a preferred embodiment of a DBA or entitlement transaction. Explanation of symbols 100 Central controller 110 Communication link 111 (wheel) Hub 120 Regulator demodulator 13 0 Ethernet This paper size applies to China National Standard (CNS) A4 specification (210 X 297 mm) -34-(Please (Please read the notes on the back before filling this page) • Binding-Order--Printed by the Employees' Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 4736 Chuan A7 B7 Description (32) 14 0 Internet 15 0 Wireless device 160 Workstation 170 Macintosh computer 180 Laptop 19 0 Rare road / customer network device 200 Personal digital handheld device 2 10 Application server 2 3 0 Object demand intermediary 2 4 0 Transaction server 260 Data storage device 261 Trader and account database 262 Market profit database 2 6 3. Market assets. Data database 264 Event data database 265 Risk database 266 Transaction data Library 2 6 7 Contingent terms and conditions database 270 Market data feeder 300 Event selection 305 State definition 3 10 Trading period 311 Trading start date 3 13 Trading end date (please first Read the notes on the reverse side and fill out this page) · IIII! I order — — — — — — — — ^ This paper size is applicable to China National Standard (CNS) A4 (210 X 297 mm) -35-Ministry of Economy Wisdom Printed by the Consumer Affairs Cooperative of the Property Bureau 473660 A7 B7 V. Description of the invention (33) 3 2 0 Transaction period 321 Transaction start date 323 Transaction end date 3 3 0 Transaction period 331 Transaction start date 3 3 3 Transaction end date 3 4 0 Trading period 341 Trading start date 3 4 3 Trading end date 3 5 0 Observation period 3 6 0 Step process 370 Display 501 Description 503 Display 504 Investment key 5 0 5 Historical data piece 506 Analysis piece 5 0 7 1 Day profit key 600 Real time data feeder 610 Historical data feeder 620 Business behavior data feeder 630 Step process 7 0 1 A party accepting reciprocal credit 7 0 2 Payment to the counterparty of the transaction -------- — —-- II -------- ^ --- II--II, (Please read the precautions on the back before filling this page) This paper size is applicable to China National Standard (CNS) A4 (210 X 297 mm) -36- A7

473680 V. Description of the invention (34) Detailed description of the preferred embodiment The detailed description of the preferred embodiment is classified into seven parts. The first section provides a summary of a transaction or investment in a group; D B A R or a system and method with rights. The second section details some of the important features of trading or investing in the entire set of DBA or contingent systems and methods. The third part of the detailed description of this preferred embodiment provides a detailed description of the two preferred entities in the present invention. Investing in the entire group of DBARs may have the right, and investing in this DBAR or a combination of rights is a detailed description. . The fourth section discusses the risk used to calculate the concomitant investment in D B A R with a contingent group and a set of risks. In the fifth part of the detailed description, the relationship between liquidity and price / quantity in the preferred embodiments of the system and method of the present invention is proposed. Part VI proposes a detailed description accompanying the figures in this note. In the last part of the detailed description, some of the more specific advantages of the system and method of the present invention are discussed. Specifically, the detailed description of this preferred embodiment is categorized as follows: 1. Large network: used for DBAR or rightful exchange and market 1. 1.1 exchange design 1. 2. market operation 1. 3. network-assisted 2. DBAR Contingent features 2.1 DBAR or entitlement representation --------- II-- 1 ---- ---- til ------- ^ (Please read the precautions on the back before (Fill in this page) Printed by the Employees 'Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs This paper is printed to the Chinese National Standard (CNS) A4 (210 X 297 mm) -37- 473630 Printed by the Employees' Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7- -------- 1 -------- V. Description of the invention (35) 2.2 Units of investment and expenditure 2.3 Standard demand redistribution function 2.4 Calculating the total investment has obtained the expected expenditure '2.5 A standard DRF (demand redistribution function) example 2.6 interest rate considerations 2.7 profit and profit 2.8 calculation when the investment amount is large 3. Examples of DBAR or entitlement types 3.1 DBAR field derivatives 3.2 DBAR portfolio 4. Risk calculations in the types of DBAR or entitlements 4.1 Market risk 4.1.1 in 4.1.2 Determination of capital in a state of risk using a Monte Carlo statistical test simulation experiment method 4.1-2 Determination of capital in a state of risk using a previous data simulation experiment method 4.2 Credit risk 4.2.1 Credit in a state of risk Determination of capital 4.2.2 Use of Monte Carlo statistical test simulation experiment method to determine credit capital in a risk state / 4.2.3 Use previous data simulation experiment method to determine credit capital in a risk state. Please read the precautions on the back before filling in this Page} Install i II I I--Order! This paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 public love) 38 ----- 47360 & 0 A7 __________ B7 V. Description of the invention (36) 5 · Relationship between circulation and price / quantity 6 · Detailed description of figures 7 · Advantages of the preferred embodiment (please read the notes on the back before filling out this page) 8. Technical appendixes In this description, for clarity, specific terms will be used, including the comparison of the present invention Description of the preferred embodiment. However, this invention is not intended to limit the terms used, and it is important to understand that each specific term includes all equivalent terms. 1 Outline: Used for DBAR or rightful exchange and market 1.1 Exchange Design This section describes the better method for constructing DBA R or having rights and designing a transaction for this DBA R or having rights. The design of this transaction is important to a contingent investment in accordance with the present invention. The preferred embodiment in such a system includes a process for establishing a limited state and distributing profits as described below. Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs (a) Establishing a limited state: In a preferred implementation, for example, the distribution of the possible outcomes of an observable event is divided into several regions or states. In a preferred embodiment, a state usually occurs because the states are mutually and collectively exclusive. Traders in this embodiment invest in a particular outcome in a state of choice in which they expect to receive benefits. This kind of investment allows traders to use the representation of these states and the possible results of these major economic real-world events to make this paper. The standard for China paper (CNS) A4 (210 X 297 mm) is applicable. _ 39-473680 A7 __ B7 V. Description of the invention (37) (Please read the precautions on the back before filling this page) Hedge investment. In a preferred embodiment of the D B AR or contingent type, 'Unsuccessful transactions or investments invest funds into successful transactions or investments. In this embodiment, these states are best defined for a given contingent right as the basis for mutual exclusion and the allocation of grade probability in these states, that is, the probability of all uncertain outcomes being equal to one. This method under. For example, a state corresponding to a stock's closing price can be established to support a group of DBARs or have the right to divide the possible closing price in a stock into several regions on a given future date. This future stock price distribution is divided into several limited states in this way, forming a probability distribution in which each state is mutually exclusive, and the sum of the closing probability of the stock is given in each of the limited states in each of the given states. The fixed date is equal to one. Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs. In a preferred embodiment, traders can invest in several selected states at the same time in a given distribution, without having to immediately disperse their investment to the selection. To invest in every limited state. Investors can therefore place several investments in response to an expected profit distribution from a group of contingent rights. This may be done in a preferred embodiment of DBAR or a right exchange. By using an undetermined account number of several states of investment, when the benefit adjustment is reflected in the total number of investments in a trading period, it is Master and redistribute periodically. At the end of a given transaction period ‘based on the distribution of the final sum of investments across states’ A multi-state investment can be redistributed to obtain the expected distribution of expenditures. Therefore, in such a preferred embodiment, 'the sum of the investment allocated to each selected state' and this relative return 'are at the time of final settlement, this paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 (Public Love) -40- 473660 A7 _ B7 V. Summary of Invention (38). The following example 3 · 1.2 is an example of multi-state investment using such an undefined account. (Please read the notes on the back before filling out this page) (b) Distribution of benefits: According to the invention D B A R or a preferred embodiment of the right, the profit of each state is marked. In such a preferred embodiment, although the total amount of a given transaction is fixed, the profit is adjustable. Determining the profit of a particular state may be a simple function of the total amount of an investment in this state and the total amount of a group of contingent investments in all limited states. However, in alternative preferred embodiments, some methods of determining profit may be provided including factors other than the total investment. For example, in a group of DBAR contingent rights, where unsuccessful investment funds invest back into successful investments, this profit can be based on the relative total number of investments in each state, and at the same time with the nature of the results, such as the magnitude of changes in the underlying security price, For distribution. An example in section 3.2 below illustrates an embodiment of such a portfolio of securities. 1.2 Market Operations Printed by the Consumer Property Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs (a) Termination criteria: In a preferred embodiment of a method of the present invention, the profits invested in several states are invested after the predetermined termination criteria are fulfilled Will be assigned. In the preferred embodiment, these criteria include the expiration of a "transaction period" and the determination of the outcome of related events after an "observation period". During this trading period, traders invest their money in a state of limited choice to produce the desired profit, such as the closing price of I BM on June 6, 1999, from 1 20 to 1 2 5 This paper size is in accordance with Chinese National Standard (CNS) A4 (210 X 297 mm) _ 41-473680 Printed by A7 ____B7___ of the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs V. Status between invention description (39). In a preferred embodiment, all participants know the duration of the transaction period; profit is related to the total investment change of each state during the transaction period; and profit, when the transaction period ends, according to the investment in all states The total amount and the relative investment amount in each state are allocated. This observation period can be provided as a period of time during which the contingent rights are observed and the relevant results are determined to be used to distribute profits. In a preferred embodiment, no transactions occur during this observation period. The expiration date, or when the set of D B A R or rights used for this description, expires when the D B A R or right has the right to terminate the performance of the standard. In a preferred embodiment, this expiration date is a date after or after the relevant event. This expiration date is similar to the expiration characteristics of the famous traditional futures and options. One of the future dates, the expiration date, is used as a reference to the expiration date and the price of the underlying financial product, the futures and the option price. The day of the decision. A defined contingent duration in this note is the time remaining from the date of any given reference to the date on which it expires. A transaction start date ("TSD") and a transaction end date ("TED") used in this description are the beginning and end of a time ("transaction time") during which a trader can A group of DBARs may have the right to invest. Therefore, during the time when D B A R may have the right to open for investment or trading, that is, the difference between D S D and T E D, can be regarded as the parent period. In a preferred embodiment, a given paper size applies the Chinese National Standard (CNS) A4 (210 X 297 mm) 42 (Please read the precautions on the back before filling this page) · IIIIIII Order ·! I ----- ^ 473630 A7 B7 V. Description of the Invention (4〇) The expiration date can have one or more trading periods, open continuously. For example J such as ‘T E D — the transaction period can be completely consistent with the T S D of the continuous transaction period, and as in other examples, the transaction periods can overlap. -The duration of a contingent right, the number of times employed during a given event transaction, and the length and time of the transaction period can be arranged in several ways to maximize the transaction volume or obtain other aims. In the preferred embodiment, at least one transaction period will occur-that is, beginning and ending-before the identification of the relevant outcome. In other words, in the preferred embodiment, it is easiest to temporarily define this claim right before the event during the transaction. But this is not necessarily the case, because the result of an event may not be known at a certain time, and therefore the transaction ends (or the beginning of the event) with the occurrence of the event, but before the result is known. A near-continuous or "quasi-continuous" market can be made available for the same event by creating multiple trading periods, each with its own closing profit. Traders can invest during consecutive trading periods when profits change. In this way, profits and losses can be perceived at least as frequently as current derivatives markets. This is how derivative traders can now make hedge investments in options, futures, and other derivative transactions. In a preferred embodiment of the present invention, a trader may have a way to perceive profit and at different frequencies, including more frequently than daily. (b) Market effectiveness and fairness: The market price reflects, from everything else, the distribution of information available to participants in the market for the trading part. In most markets, some participants will get more information than others. In internal banks or traditional markets, market matchmakers apply the Chinese National Standard (CNS) A4 specification (210 X 297 mm) from the paper size (please read the precautions on the back before filling this page) i · 111111 丨Order-!! 1! Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs -43- 4736 SHAN A7 B7 V. Description of the Invention (41) The counterparty with multiple information protects themselves by the scattered purchase / sale. (Please read the notes on the back before filling out this page.) In the preferred embodiment of DBAR or a market with rights, there may not be market makers who need to protect themselves. Nevertheless, it is necessary to apply some operating methods in this market to avoid the potential manipulation of a group of D B AR or contingent results or the coping of several results. Such a function is to introduce a random element about the end of a trading period. Another way to reduce the possibility of the market being operated and its minimum impact is to introduce a random element to the duration of the observation period. For example, a D B A R may have the right to set an average closing price against a market during a randomly determined period of time to counter the closing price of the market on a particular day. In addition, in the preferred embodiment, incentives can be used to bring in bonds and the trader can invest early in the trading period. For example, a pair invested earlier in a successful state. D R F allocated to a higher benefit can be used. In the preferred embodiment, earlier investments may be valuable because they can increase liquidity and increase more meaningful single price information during a transaction. Printed by (c) Credit Risk of Consumer Cooperatives in the Intellectual Property Bureau of the Ministry of Economic Affairs: In the preferred embodiment of the DBAR or entitlement market, the trader or transaction is actually protected from the primary market risk through the basic principle of system operation- Inject unsuccessful funds into successful investments. In this preferred embodiment, this is assigned to each market participant. If, for example, in a group of D B A R contingent rights, it is allowed to invest as a source of funding, it will be unlikely to raise funds for unsuccessful investments and allocate them to successful investments. -44- This paper size is in accordance with Chinese National Standard (CNS) A4 (210 X 297 mm) Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs 4736 ^ 0 A7 ---------— B7____ V. Invention Explanation (42) In almost all cases, there is a non-zero probability of default or credit risk for a given set of DBAR contingent transactions. This credit risk is of course omnipresent for all financial transactions with credit. One way to illustrate this risk is that a group of D B A R may have the right ‘not allow investment to be used as a source of funding, which is a preferred embodiment of the system and method of the present invention. In other preferred embodiments, a trader in a DBAR exchange may be allowed to use restricted funding methods' conditions on earnings monitoring, including in this DBAR system and specifically in a group of contingent rights, a transaction The calculation of credit party risk shocks at all levels. These risk management calculations are generally easier to track and transparent than those performed in traditional derivative markets to monitor counterparty credit risk and analyze credit risk managers. An important feature of the preferred embodiment of the present invention is its ability to provide decentralized credit risk for all investments in a group of DBA or contingent traders. In these embodiments, a trader invests under the usual distribution of a state (if its unit is defined for the entire group) if a given state is considered to have occurred and expects to receive a return on benefits. In the preferred embodiment, all traders, through their investments in a group of DBARs, may have the right to place the money of these investments in a central exchange or intermediary. During each transaction period, this profit is paid by Loss from successful investment to successful investment. In this embodiment, a given trader treats all other traders as the other party in the exchange, which has an interactive effect on the credit risk of both parties and the other party. This paper size applies to China National Standard (CNS) A4 (210 X 297 mm) · 45-^ -------- ^ --------- ^ (Please read the precautions on the back first (Fill in this page again) 473680 A7

V. Description of the Invention (43) Therefore, each trader assumes that the credit risk is a counterparty's portfolio rather than a single counterparty. In the present invention, in the preferred embodiment in which D B AR has contingent rights and exchanges, four main advantages are proposed in managing the credit risk attached to the financing source by means of investment. First, D B A R may have the right to limit a limited liability investment in a preferred form. Restricted debt investment has the meaning for investors that they lose the most of their total investment. With this relationship, the characteristics of restricted liabilities are similar to those of long-term options in traditional markets. In contrast, the position of short-term options in traditional markets represents a potentially unrestricted debt investment, as the downward trend that appears may be prepared to exceed this option and is theoretically unlimited. It is important that one of the groups D B A R in the present invention has the right to be able to easily respond to the short-term option status of profits in a traditional market while maintaining a limited liability characteristic. This set of D B A R contingent and limited liability characteristics is a very direct consequence of the nature of the demand side of the field. More specifically, in the preferred embodiment, it does not have the status of a sales department or a short-term option in a traditional market, even if a trader may have the status of a short-term option in a traditional market. Profit profile. Second, in a preferred embodiment, a group of DBAR or entitled traders should have a counterparty's portfolio as described above. As a result, there will be a spread of credit risk so that the sum of the credit risk borne by any one trader, on average (with a few exceptions), is less than if it appeared to a single counterparty In Traditional City (Please read the notes on the back before filling this page) i ---- I 1 Order ·! 111! * 5 ^ Printed by the Employees' Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs This paper is printed in accordance with China National Standard (CNS) A4 (210 X 297 mm) -46- 4736〇 A7 B7 V. Description of Invention (44) The field is very common. In other words, in a preferred embodiment of the system and method of the present invention, 'each trader can take advantage of this well-known effect of risk diversification in a portfolio. Third 'In the preferred embodiment of the present invention, the entire distribution of margin loans, and the total amount of funding sources and credit risks that exist in a group of DBAR or have the right to invest, can be calculated at any time and A set of contingent rights is displayed to the trader at any time prior to the fulfillment of all termination criteria. As a result, traders themselves have access to important information about credit risk. This information is not available in traditional markets. Fourth, in a preferred embodiment where D B A R or the right is exchanged, it provides more information about the possible distribution of results than traditional markets. Therefore, just like the D B A R or by-products with the right to trade according to the preferred embodiment, traders have more information about the distribution of real-world events that may occur in the future, so that they can use them more efficiently to manage risk. For many traders, a more significant part of credit risk is likely to be triggered by market risk. Therefore, in the preferred embodiment of the present invention, this ability to control or provide market risk information through exchange or other means should have a positive feedback effect on the management of credit risk. A set of D B A R or entitlement simple examples with the following hypotheses illustrates these characteristics. This example makes use of the following basic assumptions: Call for a limited set of states (with pre-determined termination criteria): (i) the stock price rises within a month; (ii) the stock price blinks within a month ; And this paper size applies Chinese National Standard (CNS) A4 specification (210 X 297 mm) _ _ ------------- Shang ----- Order ·! I ---- line (Please read the notes on the back before filling this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473660 A7 B7 V. Description of the invention (45) • Already $ 1 0 0 investment increased here値 status, as well as $ 9 5 investment in this blink status. If a trader subsequently invests $ 1 in this increase, and if the stock actually increases this month, the trader will be allocated a $ 1 · 9406 (two 196/101) outlay-a $. 9 4 0 6 plus the benefit of the original $ 1 investment (for simplicity, ignore a transaction fee). If a trader wants to “sell” an investment in this increased state as soon as possible before the end of the trading period, it has two options. He can sell to a third party, who may need to bid and sell online using a two-way order. Alternatively, using the method in the preferred embodiment of the present invention, a trader can invest in a blinking state, and this investment is proportional to the total amount of the "new" investment already invested in this state but not counted by the trader. In this example, in order to be able to fully invest in this risk-increasing state, the trader can invest $ .9.5 (95/100) in the blinking state. Therefore, in any possible outcome, the trader will receive a payout of $ 1.595, that is, if the stock goes up, the trader will receive 196.95 / 101 = $ 1.95 if the stock Derogatory traders will receive (196 · 95/95 · 95) * · 95 = $ 1 · 9 5 ° 1 · 3 Network-assisted market or exchange for a group of DBAR or entitlement markets according to the present invention, not Designed to build a market that drives the other party or matches orders. The buyer's bid and the seller's sale are not necessarily "intersecting." As this paper size applies Chinese National Standard (CNS) A4 specification (210 X 297 mm) -------- 1111-¾ ^ -------- Order --- — — — — — — (Please read the precautions on the back before filling out this page) -48- 473680 A7 __________ B7 V. Description of the invention (46) (Please read the precautions on the back before filling out this page) For the result of an internet without order interaction, The preferred embodiment of the present invention is particularly capable of complying with large electronic networks, for example, assisting on a wide network or the Internet. A preferred electronic network-based embodiment of the transaction method according to the present invention includes one or more of the following features: (a) User account: D B A R or an entitlement investment account is established electronically. (b) Interest rate and margin account: The trader's account is maintained electronically to record the interest rate paid to the trader in the open D B AR or contingent balance, and borrows the trader's balance from the margin lending rate. Interest is usually paid to a group of D B AR or contingent outstanding investment balances until the end of standard performance. Before these loans are outstanding, interest is usually charged on the outstanding investment balance. For some contingent rights, the interest on the balance of the transaction may be attributed to the closing interest during a transaction. Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs (c) Suspended accounts: These accounts are specifically related to the investments that the trader has made during the transaction, in the same event in several states at the same time. Multi-state traders are those who invest money in several states. If any state occurs, a profit will be distributed to the trader at the closing profit based on the state that actually occurred. A trader can, of course, suspend or divide this multi-state investment into several separate, single-state investments, although this approach may require the trader to constantly level his portfolio of single-state investments when profit adjustments are made throughout the trading period. The investment is made when the total amount of each state changes. Multi-state trading can respond to whatever a trader wants. -49- This paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) 473680 A7 B7 5. Invention description (47) (Please read first (Notes on the reverse side are reproduced on this page.) For example, a trader may want to invest in a security under contingent rights in all states by more than a given amount or price, for example, if a given stock price exceeds 10 in the future 0 case. Traders may also want to receive the same expenditure regardless of what happens from these states. There are contingent rights to a group of DBARs, and there may also be many states in the results where the stock price exceeds 1 0 0 (for example, greater than 1 0 0 and less than or equal to 1 0 1; greater than 1 0 1 and less than or equal to 1 2 2, etc. Wait). In order to use a single-state investment to respond to a multi-state investment, a trader may need to continuously re-balance its single-state investment portfolio, so that the sum of the investments in the selected multi-state is distributed among all states in proportion To the sum of these already existing investments. Suspended accounts can be used so that exchanges, not traders, are obliged to re-balance the portfolio of single-state investments, so at the end of the re-trading period, the total amount of multi-state investments is distributed to the composition In the state, it has been used to respond to the expected expenditure distribution of traders. The following example questions 3 · 1 · 2 illustrate the use of a suspended account when investing in multiple states. Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs (d) m e ,: Each trader can have an account that can be authenticated using the certified data. (e) Data security .: Security protection on the Internet or with the right to trade ’can be protected using strong public forms and private passwords. (f) Real-time market data server: Real-time market data can be used to provide recurring calculations of profits and to confirm results that occur during the observation period. (g) Genki measurement tool server: regular calculation of market profit -50- This paper size applies to China National Standard (CNS) A4 specification (210 X 297 public love) 473630 Printed by the Consumers' Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs System A7 B7 V. Description of Invention (48) will increase the effectiveness of market functions. Information on coupons, dividends, market interest rates, spot prices, and other market information can be used to calculate the opening profit that begins during the trading period and confirm observable events during the observation period. Complex simulation methods may be contingent on some DBA Rs, in order to measure the expected profit at least at the beginning of a trading period. (h) Real-time risk management server: In order to calculate how much margin a trader needs, the expected profit of each trader should always be calculated. The calculation of "price at risk" in traditional markets involves the calculation of troublesome matrices and Monte Carlo statistical test simulation experiments. Due to the existence of each state information in the expected profit, the risk calculation in the preferred embodiment of the present invention is relatively simple. Generally, this information cannot be used in traditional capital and insurance markets. (i) Market data storage: A DBAR may have the right to exchange, and a by-product of its operation according to the present invention can generate valuable data. This information cannot be used for traditional capital and insurance markets. In a preferred embodiment of the present invention, in a market event, investments can be raised in a range of results, such as having a 30-year United States between 6.10% and 6.20%. Treasury bonds will end at a specific time. Investments distributed throughout this state will produce data that reflects traders' expectations of the distribution of possible outcomes throughout. The network aids described in this article can be used to capture, store, and retrieve this data. (j) Market evaluation server: A preferred embodiment of the method of the present invention includes the ability to improve market efficiency on an uninterrupted basis. This can be done immediately, for example, by applying the Chinese National Standard (CNS) A4 specification (210 X 297 mm) to a set of DBAR or pre-booked paper sizes -51----------- --- Equipped · --II --- Order! --I --- line (Please read the notes on the back before filling out this page) 4736 ㈣ A7 B7 V. Comparison of profits of the period of (49) and actual real results. If investors have reasonable expectations, D B A R or entitlement profits will, on average, reflect the expectations of traders, and these expectations will themselves be sold at an average price. In the preferred embodiment, the effective measurement is an investment that is prepared for a limited state and the distribution of the entire possible result, which can then be used in statistical time series analysis with the actual result. The network assistance of the present invention may therefore include an analysis server for performing these analyses, for continuously improving the efficiency of the market. 2 DBAR Contingent Features A group of DBARs contingent on an observable event may have one or more of the following features: (1) A very thoroughly defined set represents the true guest world associated with an observable event Results that appear. In the preferred embodiment, these events are economically significant events. These possible outcomes are usually event-related units of measure, for example, an event with an economic interest rate may be S & P 5 0 0 — closing index after a month, and this possible outcome may be a month Possible index within the entire region. In a preferred embodiment, these states are defined in accordance with one or more of the possible results that may occur in the entire region, so that a range of possible states that define the state of an event is formed A countable and discrete number, and very thorough across the range of possible outcomes. For example, in a preferred embodiment, the possible results of S & P 5 0 0 may range from zero to (Please read the precautions on the back before filling this page). Installation ------- -Order --------- Printed by the Consumers' Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs, the paper size is applicable to China National Standard (CNS) A4 (210 X 297 mm)

473630 V. Description of the invention (50) Infinite (theoretically), and a limited state may be those exponents 値 greater than 1 0 0 and less than or equal to 1 1 0 0. In such a preferred embodiment, exactly one state occurs when the related event becomes known. (2) The ability of a trader to open a transaction in a specified state during one or more trading periods for each event. In a preferred embodiment, a group of D B AR may have the right to seal individual requirements to define the unit or price that this transaction can accept. These commissions can be US dollars, barrels of oil, how many shares of stock, or any other unit or combination of units that can be accepted by traders and exchanges. (3) An accepted decision that is used to determine which state or several states in the result of the event has occurred. In a preferred embodiment, a group of DBARs may have the right to define the results of related events. tool. For example, the S & P 500 index's closing level in a predetermined day may be the result of an observation, and this result can determine the occurrence of a limited state. If the closing price on that day is 1050, this decision will allow this decision to take place between 100 and 1100. (4) This leads to a description of the total DRF of each trader's transaction in each state, throughout the distribution of states' when this distribution exists at the end of each trading period, and for each investment in each state Calculate the expenditure in the case where each state occurs. In a preferred embodiment, it is completed so that the total amount of expenditure does not exceed the total investment of all investors in all states. This DRF can be used to show that each state of expenditure should occur during each transaction period. Therefore, the information provided in this paper applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -53-— — — — — — — — · 1111111 ^ · 1111111 · (Please read the notes on the back before filling out this page) Printed by the Consumer Cooperatives, Bureau of Intellectual Property, Ministry of Economic Affairs

47363U A7 B7 V. Description of the invention (51) Give traders the overall level of interest rates in each state. (5) The payment to the trader for successful stocking is based on the total amount of all successful investments minus transaction costs and the fulfillment of the status of compliance with the scope of possible events at ___ all termination standards is extended to "or It is a "state distribution". Each DBAR or right has a distribution in the state of association. This distribution is generally defined as an economic event, which is defined by the investment of a person who has a benefit or risk reduction (haven investment). For example, it can be based on the price of stocks, bonds, and futures exchange rates. It can also use statistics on the daily necessities index (for example, monthly reports of computer price fluctuations), disaster losses, and weather patterns for a specific geographic location. , And he can measure or observe the occurrence or any other event, the person is not indifferent even if there is no transaction in the event. 2 · 1 DBAR or right notation In order to help DBAR or have the right to enter a description , The following symbols will be used in this description: Printed distribution of employees' cooperatives in the Intellectual Property Bureau of the Ministry of Economic Affairs " Is the transaction with interest rates, and foreign and economic property-any where the transaction represents a given set of DBAR or the number of entitled traders η represents a matrix with m rows and n columns, where in rows i, j Column element α: is the total amount that trader i has invested in state j. When state ί occurs, there will be an expected benefit Π represents a matrix with η rows and η columns, where π ij is when j -54 -Please read the precautions on the back before filling in M. The paper size on this page applies to China National Standard (CNS) A4 (210 X 297 public love) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 4736 ㈣ A7 ----- B7 V. Description of the invention (52) When the state occurs, the unit expenditure of the investment in the state i ("unit expenditure, ') R represents a matrix with η rows and n columns, where r ^ is when the j · state occurs, The unit benefit that should be invested in state i, that is, r, ′ ^^ 1 (“unit interest”) P represents a matrix with m rows and η columns, where pu is the transaction that should be given when the j state occurs Spending by person 1, That is, P is equal to the matrix product A * Π P *, ′ represents the j-th column of the matrix P, j = 1, ..., η, which contains the expenditure payable to each investment when state j occurs

Pi, * represents the i-th row of the matrix P, i = 1, ..., m, which contains the expenditure s 1 paid to trader 1, where i = 1, ..., πί, indicating that a state represents an observable event of The range of possible results T, where 1 2 1, ..., m, represents the total amount of transactions that occur in the expected state i T represents the total transaction amount under the entire state distribution, that is, τ = Στι f (A, X) represents the transaction cost of exchange, it may depend on the entire distribution of the amount of money stored in all state transactions and other factors, X ', some of which will be explained below. For the sake of brevity, the remaining part of this note is 'except for the special emphasis'. This transaction fee is assumed to be in accordance with the Chinese National Standard (CNS) A4 specification (210 X 297 public love) at this paper size. -55- ----- -------- ^ -----: --- I ^ --------- f, (Please read the notes on the back before filling this page) 4736 智慧 Intellectual Property of the Ministry of Economic Affairs Printed by the Consumer Cooperative of the Bureau A7 B7 V. Description of the invention (53) A fixed proportion of the total amount in all states C p represents the interest rate charged on the margin loan cr represents the interest rate paid to the transaction balance t represents the acceptance from the transaction or investment When the time comes to fulfill all the termination standards of a DBAR or right group, it is usually expressed in years or fractions. X stands for DRF or other information that transaction fees can rely on, such as specific information for investors or traders, including, for example, transaction size and Time In a preferred embodiment, the DRF is a calculation with the total amount of transactions under a state distribution, a statement of transaction costs, and the conditions for each state occurring. entire Under state distribution expenses to the function of each trader or investment. The sign of this DRF is: P-DRFUJUJhXIs ^ s ^ A * Π (A, f (A, X), X) (DRF) In other words, these m bets are in this η state, as shown by matrix A It shows that the trader will receive an expenditure represented by the matrix P. When state 1 occurs, the transaction fee f and other factors X are also taken into account. The expenditure confirmed in the matrix P can be expressed as (a)-the expenditure of the US-Iranian unit of the transaction in each state when it occurs in each state, represented by the matrix Π, multiplied by (b) to confirm this. Matrix A of the total amount of trades or investments made by the trader in each state. The following indications can be used in a preferred embodiment to indicate that expenditures must not exceed the total amount of the investment. The paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm). 56 _ ----- -------- Shang ------- I order! -^ Line (please read the precautions on the back before filling this page) 473630 A7 B7 V. Description of the invention (54) Expenses, no matter what happens: for ″ = 1, .. ,, η (DRF restrictions) Among them This 1 represents a matrix whose dimension is as shown below. The superscript τ represents a standard transpose symbol. P *, ^ is the j-th column of the matrix ρ, which means that when state j occurs, every trader should be dealt with. Of expenditure. Therefore, in the preferred embodiment, unsuccessfully invested funds are injected into successful investments. In addition, there are no credit-related risks discussed below, and in this preferred embodiment there will be no risk that expenditures exceed the total amount of investment in the distribution of states, regardless of the occurrence of any state. In short, a preferred embodiment of the D B AR or contingent group in the present invention is an autonomous financing fund, that is, in any state, the expenditure plus transaction costs will not exceed the input (ie the total investment). DRF may depend on other factors such as the total investment and the state in which the investment is completed. For example, an expenditure may be affected by an event that is potentially in the middle of two days (for example, a change in the price of a security during the two days) and the amplitude of the observed result changes. As another example, DRF may allocate higher expenditures to traders who started investing earlier in the trading period than traders who invested later in the trading period, thus providing an incentive to increase liquidity during the trading period. Another is that DRF may be allocated to investors who invest more money in a given state, and spend more than investors who invest a small amount of money in the same state, so provide another to improve circulation during the transaction Sexual incentives. This paper size applies to China National Standard (CNS) A4 specification (210 X 297 mm) (Please read the precautions on the back before filling out this page)-Install -----II Order-------- Economy Printed by the Ministry of Intellectual Property Bureau Employee Consumer Cooperatives-57- Printed by the Ministry of Economic Affairs Intellectual Property Bureau Employee Consumer Cooperatives 473680 A7 _ B7 V. Description of Invention (55) In any event, a DRF has many possible functions in the form that can be used . For the sake of illustration, a very common form of DRF is when the transaction volume A is not redistributed in any state, that is, each trader will get back his transaction amount in any state in the event Below, as shown by the following symbols: P = A if s = Si, for i = 1,, n This general DRF is not useful for the allocation and exchange risk of hedging investments. For the occurrence of a meaningful risk exchange, a preferred embodiment of DRF should affect the reallocation of a meaningful amount of investment across the distribution of states when at least one state occurs. Discussed below in the DBAR of the present invention or a standard DRF of the right group, these investments are in a state where the money that has not occurred is a complete implementation of a fully reallocated state (minus a transaction fee) for a better implementation example. This invention is not limited to a standard DRF, many other types of DRF can also be used and may be better able to assist DBA R or a group of rights. For example, another preferred embodiment of DRF allocates half of the investment amount to the state where it occurs and refunds the remainder of the total investment amount to the state where it did not occur. In other preferred embodiments, DRF may assign some percentages to states that occur, and assign other percentages to one or more states that are "close" or "near" with these zero-spend zero-occurrence states. Other DRF will be very apparent to those familiar with the review reviews in this description and the exercises in the present invention. This paper size applies to China National Standard (CNS) A4 (210 X 297 mm): 58 ^ " " " " -------------------- -^ --— — — — — — — (Please read the notes on the back before filling out this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 _ B7 V. Description of Invention (56) 2 · 2 Investment and Units of expenditure The units of investment and expenditure in the system and method of the present invention may be units of currency, the number of daily necessities, the number of shares of common stock, the total number of exchange transactions, or other units representing economic prices. Therefore, there are no restrictions on the currency or money (for example, US dollars) in which investments or expenditures are applicable, or the expenditure incurred by DRF must be consistent with the unit of investment. Preferably, the unit of the same price is used to indicate the price of each investment, the total amount of all investments in DBA R or the right, and the amount of investment in each state. For example, a trader may invest in a group of D B A R or shares of common stock, and an appropriate D R F may distribute the expenditure to the trader in yen or barrels of oil. In addition, the total amount of transactions and expenses may be combined in the same unit, such as a combination of daily necessities, currency, and shares. In a preferred embodiment, the trader does not need to physically store or obtain the transfer of the unit of value, and can rely on D B A R or have the right to exchange. In order to promote efficient transactions and transactions of expenditures, conversions between units are made. For example, a D B AR may have the right to be defined in such a way that the investment or expenditure is done with more ounces of gold. Traders can also deposit currencies for exchange, such as US dollars, and this exchange can be used to convert the total amount of investment funds into the correct unit, that is, gold, which is used to invest in a given state or obtain an expenditure. In this description, one dollar is usually used as a unit of investment and expenditure. This invention is not intended to limit investment or expenditure units. ^ -------- til —----- ^ (please read the notes on the back before filling out this page) The paper size applies to Chinese national standards ( CNS) A4 specification (210 X 297 mm) -59- If i printed 473680 A7 __ B7 by the Intellectual Property Bureau of the Ministry of Economic Affairs, V. 5. Description of the invention (57) In the situation, in order to distribute profits to each investment, this exchange It is best to convert the number of each investment, so that the investment in a set of DBAR or entitlements totals into a single price unit (eg, yuan). The following example question 3 Factory 1 · 2 0 shows that a group of DBAR may have the right to invest and spend in units of common shares. 2.3 Standard demand redistribution function A preferred embodiment of DRF can be used to make a group of DBARs have the right to become a "standard" DRF. A standard DRF is a DRF with the following characteristics: When a given state 1 occurs, investors who have already invested in that state receive an expenditure / investment unit equal to (a) the total amount of transactions in all states minus Transaction costs divided by (b) the total amount of investment incurred. A standard DRF can use a transaction fee, T, which can be a fixed percentage of the switchboard overrun amount, although there may be other transaction fees. Traders who invest in a state that does not occur receive zero payouts. Utilize the symbol of progress above: that is, when state i occurs, the unit expenditure invested in state i 其他 〇 other, that is, if / Q, when state j occurs, the unit expenditure invested in state i is zero in a standard In a preferred embodiment of the DRF, a unit expenditure matrix Π as defined above is a diagonal line with each item equal to 7Γ, ^. This paper size applies the Chinese National Standard (CNS) A4 (210 X 297 mm) -60-

Please read the notes on the back first and then fill in 1 I Binding II II 473680 Α7 _______ Β7 Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 5. Description of the invention (58) When 1 2 j 'matrix along the diagonal , And all other terms are zero when not on the diagonal. For example, in a preferred embodiment, when η == 5, the unit expenditure matrix Π is: [T ^ Λ Ί Γ 1 '— 0 0 0 0 — 0 0 0 0 Ά Ά τ Λ 1 0 — 000 0 — 000 Τ2 Τ2 τ 1 0 0 — 00 * (!-/) = 0 0 — 00 Ά Τ, eight Λ τ 1 0 0 — 0 0 0 0 — 0 Τ4 0 0 0 0 — 0 0 0 0 — L '· L τ5 \ For this standard DRF embodiment, the unit expenditure matrix is the total investment amount minus transaction costs, multiplied by a reciprocal that contains the total number of investments in each state on the diagonal, and the other terms are Diagonal matrix of zeros. With the total number of investments of all m traders across all η states, and the total number of investments invested in state i, T i, both are functions of matrix A, which contains each trader already in each state The amount of investment: Τ = \ τ ^ Α ^ \ η where B η (i) is an n-dimensional column vector with the i-th row 1 and other zeros. Therefore, in the case of η = 5, the above-mentioned standard DRF has a unit expenditure matrix, which is a function of the transaction amount across the state and transaction costs: This paper size applies the Chinese National Standard (CNS) A4 specification ( 210 X 297 mm) -61-(Please read the notes on the back before filling out this page)-* Installation ----------- Order ----- 473680 A7 B7 V. Description of the invention (59)% ⑴ 0 0 0 0 0 1 0 1 0 0 0 4 (5) ”It can generalize numbers in any state. The actual expenditure matrix, for a set of DBARs or rights-limited price units (for example, yuan) is the product of m X η total transaction matrix A and η X η unit expenditure matrix Π, as defined above: (Please read first Note on the back, please fill in this page again.) (CDRF) Printed by the Intellectual Property Bureau of the Ministry of Economic Affairs, Consumer Consumption Cooperative P = ^ * Π (Λ /) This provides the above expenditure matrix as the total transaction amount included in matrix A and the unit element expenditure matrix The product of Π is itself a function of matrix A, that is, transaction cost f. This formula is labeled C D R F for "standard demand redistribution function". I am complimented that, in this preferred embodiment, any change in matrix A will generally have an impact on the expenditure of any given trader, both of which are directly affected by CDRF due to changes in the total investment Via matrix A, and the change in unit expenditure, that is, an indirect effect because the unit expenditure matrix Π itself is a function of a transaction total matrix a. 2 · 4 Calculate the total investment to obtain the expected expenditure. The paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 public love) -62- 473630 Α7 Β7 5. Description of the invention (60) (Please read the back Note: Please fill in this page again.) In the preferred embodiment of the DBAR or the right group of the present invention, some traders expect that during a transaction period, there will be an expenditure when a given state occurs, and the investment in some states , As described above in the CDRF expression. The other is that a trader may have a preference for an expected expenditure allocation when a state occurs. This expenditure allocation can be represented by P ^, which is a row corresponding to trader I in the expenditure matrix P. Such a trader may want to know how much investment is required to obtain this expenditure allocation relative to a given state or states. In a preferred embodiment, the amount of this investment across the CDRF state distribution, and given an expenditure distribution, the derivative of the CDRF expression can be used to calculate the transaction volume matrix a: A = P ^ U (Ajy) (CDRF2) where the superscript -1 of the unit expenditure matrix represents an inverse matrix. The printed CDRF 2 of the Employees' Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs does not provide a clear answer to the transaction volume matrix A 'Because the unit expenditure matrix Π itself is a function of the transaction volume matrix. CDRF 2 usually involves the use of mathematical analysis to solve m linear equations simultaneously. For example, consider a given state, a parent who wants to To know the amount, α, you should come to the transaction to get an expected expenditure ρ. Use the “forward” expression to calculate the transaction amount. As described in the above CDRF, the expenditure can be obtained as follows: α 1 paper Dimensions are applicable to China National Standard (CNS) A4 specifications (210 X 297 male jade) ΓββΤ -------- 473680 A7---____ V. Description of the invention (61) Please read the note on the back first Please fill in this page again) This means that a given row and column of the matrix equation c D R F is after α has been traded in state i (assuming there are no transaction fees). This expression is a quadratic formula in the transaction amount α and can be solved by the following positive quadratic root: a — jp-T) + ^^ r) 2 + 4 * p * Ti (CDRF3) 2 2 · 5 An example of a standard DRF A simplified example shows that there is a set of DBAR contingent rights, which are limited to two states (for example, states "1" and "2"), of which four traders invest in Use of CDRF. In the example, the following conditions are assumed: (1) the transaction cost f is equal to zero; (2) the investment and expenditure are in yuan; (3) trader 1 has invested $ 5 in state 1 and $ 1 0 in state 2; and (4 ) Trader 2 invests only in state 1 $ 7. Under the current investment situation, the transaction volume matrix A has 4 rows and 2 columns, and the expenditure matrix Π has 2 rows and 2 columns, which are defined as follows: Printed by the Intellectual Property Bureau Employee Consumer Cooperatives of the Ministry of Economic Affairs Π 100 0 0 5 7 0 0 11120 22 This paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -64-473680 Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economy A7 B7 V. Description of the invention (62) Expenditure matrix P, when When each state occurs, each trader's expenditure in yuan is the product of the transaction volume matrix A and the expenditure matrix Π:-" 9.167 22 '^ 12.833 0 The first line of the expenditure matrix P is equivalent to based on trader 1 Invested and expenditures per unit expenditure matrix. When State 1 occurs, Trader 1 will receive a payment of $ 9 · 1 6 7 and a payment of $ 2 2 when State 2 occurs. Similarly, when state 1 occurs, trader 2 will receive a payment of $ 1 2 · 8 3 3 and an expenditure of $ 0 when state 2 occurs (because trader 2 does not invest in state 2). In this example description, Trader 3 and Trader 4 have an outlay of $ 0 because there is no investment at all. Consistent with the above-mentioned expression "DRF Limiting Conditions", the total expenditure payable when one of the two states occurs is less than or equal to the total investment amount. In other words, C D R F in this example is a self-raised fund so that the total expenditure plus transaction costs (assuming zero here) will not exceed the total investment amount regardless of which state occurs. This can be indicated by the following symbols: z lTm * Ptl = 22 < lrm * A * ln = 22 lTm * R2 = 22 < lTm * A * ln = 22 Continuing the original example, now suppose that traders 3 and 4 each want To this paper size, the Chinese National Standard (CNS) A4 specification (210 X 297 mm) is applicable. · 65 · ---------- 11-¾ ^ -----— II Order · —I!- --- (Please read the notes on the back before filling this page) 473680 A7 _____B7____ V. Description of Invention (63) Make an investment to generate an expected expenditure distribution. For example, suppose Trader 3 wants to get a $ 2 payout when state 1 happens, and wants to get a $ 4 payout when state 2 happens; Trader 4 'want to get one when state 1 happens $ 5 payout, and a $ 0 payout when state 2 occurs. Expressed in CDRF: Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs

= II pv PC In a preferred embodiment and in this example, the completion of the expenditure is based on the end of the bit expenditure matrix Π (A, f (, the given hypothesis of the number of transactions (a) is done for each transaction as described above) Investment, and (b, given the distribution of the number of transactions, it is recorded in an account that is used to determine one more suspension, in order to determine the appropriate allocation, 2 in, for example: the number of investments A, so it is also based on a single A )), When they exist during the trading period. For this example, now at the end of the further period, traders 1 and 2 have been) when they exist. The expected expenditure distribution of traders 3 and 4 at the end of the trading period has been heavy The state invests into each state and the distribution of expected expenditures for each trader is allocated. Account can be used to obtain C D R F 5 10 ~ Pu Ρι / Γ_1 7 〇 = Ρ2 ， ι Ρ2,2 ^ (5 + 7 + a3l + q

* (5 + 10 + 7 ten 0 + α31 + α41 + α32 + α42) The solution of the above formula will generate the funds that must be invested in Father-in-Law 3 and State 1 and State 2 (please read the precautions on the back before filling in this Page) installed ----- ^ ---- order --------- line: 4, l) 0 1 cont 'd below (10 + 0 + α32 + α42) 4 in contingent rights Corresponding to the status, they can get the expected paper size of this paper to apply Chinese National Standard (CNS) A4 (210 X 297 mm) -66-473680 A7 ---------_ V. Description of the invention ( 64) $ out allocation. This solution completes this total investment at the same time so that traders 1 and 2 will be able to decide what their expenditures will be in either state. This solution can use a computer program to calculate the investment of each trader in each state in order to obtain the expected expenditure to obtain the investment amount. In a preferred embodiment, the computer program iterates this process until the calculated investment amount converges, that is, the amount that the traders 3 and 4 must invest in the calculation process, each time iterative calculation, it will not Change again. This method is the so-called fixed-point iteration method and is described in detail in the technical appendix. The following chart contains a computer code listing of two functions written by Microsoft in Microsoft Vhual Basic, which can be used to complete the iterative calculation. In this example, a set of DBARs with a standard demand allocation function or the total right to invest the last Assignment: Figure 1: Visual Basic computer coding instructions for CDRF2 (please read the precautions on the back before filling this page)-«------------ Order -------- Wisdom of the Ministry of Economics Printed on the paper by the Consumers ’Cooperative of the Property Bureau Applies to Chinese National Standard (CNS) A4 (210 X 297 mm) -67-473660 A7 B7 V. Description of the invention (65) Printed by the Consumers’ Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs

Function aliocatctradesiA ^ mat, P_mat) As Variant Dim Affinal Dim trades As Long Dim states As Long trades = P_matRows.Count states = PjTiatColumns.Count ReDim A__fmal (l To trades, 1 To states) ReDim statcdem (l To states) Dim i As Long Dim totaldemand As Double Dim total desired As DoubleDim iterations As Long iterations = 10 For i = 1 To trades For j = 1 To states statedem (j) = A__mat (i, j) + statedem (j) A_final (i, j) = A__mat (i, j) Nextj Next i For i = 1 To states totaldemand = totaldemand + statedem (i) Next i For i = 1 To iterations For j = 1 To trades For z = 1 To states If A_mat (j , z) = 0 Then totaldemand = totaldemand-A_fmal (j, z) statedcm (z) = statedcm (z)-A_final (j, z) tempalloc = A_fmal (j, z) A_final (j, z) = stateall (totaldcmand , P_mat (j, z), statedcm (z)) totaldemand = A_final (j, z) + totaldemand statedem (z) = A_final (j, z) + statcdem (z) ----------- --Installation --------- Order --------- * 5 ^ (Please read the precautions on the back before writing this page) This paper size applies to Chinese national standards ( CNS) A4 specification (210 X 297 mm) -68- 473660 A7 __B7 V. Description of the invention (66)

End If Nextz Ncxtj Next i allocatetrades = Affinal End Function Function statea! L (totdemex, despaystate, totstateex) Dim soli As Double soli = (-(tbtdcmex-dcspaystate) + ((totdemex-despaystate) Λ 2 + 4 ♦ despaystate * totstateex ) Λ 0.5) / 2 stateall = soli End Function (Please read the precautions on the back before writing this page) This example involves two states and four traders. Using computer coding as shown in Figure 1, one is generated as follows Investment amount matrix A: 5 10 7 0 j = 1.1574 1.6852 2.8935 0 The unit expenditure matrix π can be calculated from the above A and is equal to the expenditure matrix P printed by 1.728 00 2.3736 obtained from the Employee Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs. Is the product of A and Π and is equal to: 8.64 23.7361 '12.0961 0 P = 2 4 5 0 This paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -69- 473680

V. Description of the invention (67) (Please read the precautions on the back side before filling out this page) 値 It must be noted that the sum of each column of P in the above formula is equal to 2 7 · 7 3 6 1 is equal to (yuan) The total investment, so as expected in the example, this DBAR contingent group is self-funded. This distribution is said to be balanced because Traders 1 and 2's investment amounts are not disordered 'and Traders 3 and 4 as described above receive their expected expenditures when each state occurs. 2 · 6 Interest rate considerations Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs When investing in a group of DBARs or having the right, a trader will usually have an outstanding account balance during the investment period and may have unsettled funds from the exchange Loan or margin balance of the account. Traders will usually be paid interest on the balance of the outstanding account investment and usually pay interest on the outstanding loan or profit. In the preferred embodiment, although in the alternative preferred embodiment these items can be processed outside the expenditure structure, for example, by debit or credit account, the balance of the transaction interest and the interest on the margin loan The impact can be quite noticeable. Therefore, if part / 5 of a monetary unit's yuan transaction is transacted in cash, and the other part is paid a deposit, then when state i occurs in the event, the unit expenditure π i can be expressed by the following formula: 巧 = _ (丄: () * Γ + household * (0 * (1-A) * (S)% of which the last two items do not indicate the investment of each unit in the time tb. The paper standard is applicable to the Chinese National Standards (CNS) A4 specifications (210 X 297 mm) _ 70-473630 Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7 V. Description of the invention (68) The balance of the balance and the investment of each unit of the loan at time t 1 Borrowing. 2,7 Profits and Benefits In a set of DBARs or a preferred embodiment with rights that have a standard DRF, the interest representing the percentage benefit of each unit of investment is closely related to the expenditure. This benefit is also related to the investment The concept of financial interest, which is familiar to the user, is closely related. For example, if an investor buys a stock of $ 100 and sells it for $ 110, the investor sells a stock with a price of $ 10. % Benefits (and a $ 1 1 0 payout) In a preferred set of DBARs or rights with a standard DRF, the unit benefit r: when state 1 occurs' can be expressed by the following formula: a-/) * r -_ ^ __ when state 1 occurs Η 7; = _ι Others, when state 1 does not occur In this embodiment, the 'benefit of each unit investment in a state occurs is an amount invested in this state, this investment amount all other As a function of the state and exchange costs. For a state that does not occur, its unit benefit is 100%, that is, when a state occurs, the entire investment amount can be expected to receive a benefit, but when a state does not occur, the entire investment The amount will be forfeited. The 100% interest in this event is the benefit of "money is gone" with the expiration of the traditional option. The paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 public love). 71----- ----- I --- ^ ---- I! Til —! — — (Please read the notes on the back before filling in this page) 4736〇0 A7 B7 V. Description of Invention (69) I have the same idea. When a traditional option expires without money, the margin is reduced to zero, and the entire amount of money invested in the option is lost. For the purposes of this description, an expenditure is defined as the sum of the unit investment benefits in a given state, multiplied by the amount already invested in that state. For a group of DBARs that may occur with respect to all n possible states, the sum of all expenditures Ps can be expressed by the following formula: In a preferred embodiment of a standard DRF, this is in state i The sum of the expenditures incurred at the time of occurrence can be obtained by substituting the unit benefits of any state into the above formula: (Please read the precautions on the back before filling this page) ps 0-/) * TTi-Ti); ^. + χ (-ι + ι) * Γ; = 〇-/) * ^ Ti Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs Therefore, in this preferred embodiment, for any given state , The total expenditure paid to all traders is equal to one minus the payment of the parent fee for the exchange (in this example, it is expressed as a percentage of the total investment amount across all states), multiplied by The total amount of investment in a set of DBAR or entitlements. This means that in the preferred embodiment of a set of DBARs or right holders, and assuming no other credit or similar risks, for a currency exchange, (1) in any given state, the probability of exchange losses is zero. (2) For the occurrence of any given state, this exchange is obtained; 72 paper sizes are applicable to China National Standard (CNS) A4 (210 X 297 mm) A7

V. Description of the invention (70) The Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs prints an exchange rate fee without bearing any risk; (3) Expenditure discusses a function of an indefinite demand, that is, the amount of investment; and (4) Transaction or exchange fees may be a simple function of total investment. Other transaction costs can be used to help. For example, transaction costs may have a fixed component for some levels of investment aggregates, and when this level is exceeded, a sliding or fixed percentage is applied to the investment amount. Other methods of determining transaction costs, from this description or based on the exercises in the present invention, will be apparent to those skilled in the art. In a preferred embodiment, the distribution of investment amounts in different states means a common estimate of the probability of occurrence of each state by all traders. In a set of DB AR or contingent preferred embodiments with a standard DRF, the expected benefit E (r,) of an investment in state i (as opposed to the actual event occurrence) can benefit with the following probability The weighted sum is expressed as: take, + (卜 仏) * (-= α -1 where 〇1 is implicit in A (which contains all the investments in the DBAR or the rights state) the probability of state i occurring. r, substituting into the above formula, we get: Ε (η) = ς ^ ——— ^ —— 1 The paper size is applicable to China National Standard (CNS) A4 (210 X 297 mm) -73------ --------- Installation ---- Ordering! II --- Line (Please read the precautions on the back before filling this page) 4736〇0 A7 ___ B7 V. Description of the invention (71) For an efficient market, the expected benefit E (r :) across all states is equal to the transaction costs at the time of the transaction, that is, on average, the benefits earned by all traders will not exceed the transaction costs. Therefore, for A DBAR may have the right to use a standard] 3 RF in an efficient market 'where E (ri) is equal to the transaction cost of the transaction, a f, hidden The probability of occurrence of state i contained in A is calculated: (Please read the precautions on the back before filling this page) Therefore, the implied probability is the ratio of the amount in this state. This relationship allows for a standard DRF The probability of this state. In this set of DBAR contingent rights, the amount of investment in a given state is divided by the total trader who invests in all states. In the DBAR or contingent group (), it is possible to calculate the economics of this trader's participation at any time. The information on interest rates printed by the Ministry of Intellectual Property Bureau's consumer cooperatives for a trader usually includes the unit benefits of each state state, as well as the implicit state probability. One advantage of this R exchange is the relationship between these quantities in the world In the embodiment, if the trader knows one of the terms, for example, the amount of investment implicit in one state of A, the DBA of each invention. In a preferred other two terms can occur with this state as follows: The relationship between the unit interests of the probability that can occur immediately can be expressed as qi = ¥ ^) ---- Order --------- The standard of paper size of the paper applies the Chinese National Standard (CNS) A4 (210 X 297 mm) _ 74-473630 Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 __B7___ — V. Description of the invention (72) According to the formula derived above, the probability that the interest is the implicit state can be invested The distribution of the amount, τ, is calculated for all states i = 1, ..., η. In traditional markets, transaction amounts (limit order books) distributed across states are not readily available. In addition, “in the traditional market”, there is no such calculation and use of market interest or price, that is, the price of supply and demand balance, any precise investment amount or mathematical calculation of limit order books. More precisely, in the traditional market, professional managers and market matchmakers usually have a privilege to get the distribution of bids and sales, or limit order books, and often use this privileged information to set the basis The balance of supply and demand judged by market matchers at any period of time in the market 2. 8 When the investment amount is large Calculated in a set of DBAR using a standard DRF or a preferred embodiment with rights, when the amount is large When the amount of investment is distributed across states, in order to generate the expected expenditure allocation, it may be possible to perform an approximate investment distribution calculation. A trader who considers the amount of investment α in state i, when state i occurs, the expenditure P has been obtained in the above formula: \ Ti ^ a) If α follows the total investment amount of state i and the investment in all states If the total amount is small in comparison, adding α to state i will not affect the ratio of the total investment amount in all states to the total investment amount in state i. In (Please read the notes on the back before «. 'Write this page) i ·!-Order ·! ! 1 · This paper size is in accordance with Chinese National Standard (CNS) A4 (210 X 297 mm) -75- 473680 Printed by the Consumers' Cooperative of Intellectual Property Bureau of the Ministry of Economic Affairs Α7 Β7 V. Description of Invention (73) In this case, T 七 a T τι ^ α τι Therefore, in the preferred embodiment, its approximate 値 is acceptable, and the expenditure for state i can be expressed as:

Under these conditions, the investment required to generate expenditure P is:

a Today * P = P These expressions indicate in the preferred embodiment that the amount of investment required to produce an expected expenditure is approximately equal to the ratio of the total investment in state i to the total investment in all states , Multiply by expected expenditure. This is equivalent to the implied probability multiplied by the expected expenditure. Applying this approximation to the expression of C D R F 2 above, we get the following:

ν4 «P * Π_1 = P * Q where Q is a matrix of η χ η, which is equal to the inverse of the unit expenditure matrix Π, and its diagonal 値 is Q :, i = 1, ..., η. This formula provides a gold sieve but it is easier to calculate the CDRF 2 solution. The paper size applies the Chinese National Standard (CNS) A4 specification (210 χ 297 mm) -_ -------- 1- --- Installation ---- 1--Order ------- II line 丨 (Please read the precautions on the back before filling this page) 473680 A7 B7 V. Description of the invention (74) (Please read the back Note that this page should be filled out again.) It is implicitly assumed in the formula that the amount invested by the trader will have no effect on the existence of the unit expenditure or the probability of being implied. This linear rather than quadratic approximate solution 'will sometimes be used in the following example, where it can be assumed that the total investment amount is very large compared to the investment of any other trader. Consumer Cooperatives Print 3 Examples of DBAR or Entitled Types 3.1 DBAR Domain Derivatives A DBAR domain derivative (DBARRD) is a type of DBAR or entitlement that is assisted by a standard DRF as described above. In a DBAR RD, a range of possible outcomes associated with an economically significant observable event is distinguished into several defined states. In a preferred embodiment, these states are defined as regions where results may be discontinued, so that the distribution of the entire state covers all possible outcomes--that is, states are fully depleted. In addition, in a D B A R R D, the states are preferably limited so as to be mutually exclusive, that is, all states are limited to only one state will occur. If states are restricted to be mutually exclusive and fully depleted, these states form the basis of a probability distribution that defines the area where the discontinuity occurs. Defining states in this way has the advantages described below, including the trader's investment across states, which can be easily converted into the implied probability of representing the common valuation of traders with respect to the possibility of each state occurring The advantages. The system and method of the present invention can also be applied to determine different states. At this paper size, the Chinese National Standard (CNS) A4 specification (210 X 297 mm) is applied. Tjy " " 473630 A7 B7 V. Description of the Invention (75) (Please (Read the notes on the back before filling out this page) The planned DBARRD profit for the beginning of a trading period. This decision can, but need not, be made by exchange. In a set of preferred embodiments of DBAR or rights, the distribution of the investment amount at the end of each trading time determines the profit of each state, and the amount of investment in each state is a trader's preference and each Function for state probability evaluation. Therefore, it is often necessary to make some assumptions to determine the beginning of a trading period, the initial or planned profit for each state. A diagram is provided to further explain the operation of D B A R R D. In the following description, it is assumed that the risks of all traders are neutral, so that the implied probability of a state is equal to the actual probability, and all traders, the definition of a contingent event, the evaluation of possible events, and the possible results It's all the same. For the convenience of this description, the event that forms the basis of contingent rights is replaced by a closing price of the securities at a future time, such as a common stock; and the status of some possible outcomes representing the closing price class. In terms of the range of securities closing prices, they are defined as different, mutually exclusive, and fully exhausted from others. In this illustration, the following symbols are used: r represents a period of time during which a trader makes an investment decision. The Ministry of Economic Affairs Intellectual Property Bureau employee consumer cooperative prints a given time Θ represents the corresponding or contingent The time when the right expires V ^ represents the price of the underlying securities V at time r. Represents the price of the underlying securities at time Θ Z (Γ.,) Represents the price of a unit 到期 at the time Θ expires, and the current time at the time r is estimated 値- 78- This paper size is in accordance with China National Standard (CNS) A4 (210 X 297 mm) 473680 Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7 V. Description of the invention (76) D (τ, θ) represents between Between time τ and 0, the dividend or coupon payable σ t represents the variability of the natural logarithm of the annual profit of the underlying security dz represents the change in the standard normal

The trader makes a choice at a representative time 7: in an open trading period, so that time r is immediately after D S D in the current trading period. In this illustration and in the embodiment of the present invention, the final closing price V β of the contingent-limited state is constructed by distinguishing all possible areas of the price from the mutually exclusive and fully depleted state. Into. This technique is similar to constructing a discontinuous countable chart. The end point of each condition can be chosen to be equidistant or non-equidistant, in order to reflect the possibility that the results in the distribution will appear near the average outside the reduced extreme results. State can also be defined in other ways in the art. A lower endpoint can be included and a higher endpoint can be excluded, and vice versa. In any event, in the preferred embodiment, the state is limited (as described below) so that the investment attracted to a set of contingent events is maximized, because the amount of investment is completely determined with each limited state Relevant profit: The process of defining states, such as stock prices, can be performed by assuming logarithmic normalization, using statistical measurement techniques based on continuous time-based data and market data across regions from option prices, and using other statistical Distribution, or according to other processes known in the art or from this description or according to this paper standard Chinese National Standard (CNS) A4 (210 X 297 mm) --- I ---------Shang ----- ： ---- Order · -------- Line (please read the precautions on the back before writing this page) 473680 -σ1! 2 * (θ-τ)) | c 0 -r * dz A7 B7 V. Description of the invention (77) This is accomplished by the practice of the present invention. For example, in order to determine the price of options among many derivative traders, it is quite common to estimate variable parameters by using economic measurement techniques such as G A R C Η. Using these parameters, such as between time r and Θ, and known dividends or coupons, this D B A R R D account status can be defined. A log-normalized distribution choice is shown in this illustration because it is usually used by derivative traders as an assumption for the purpose of estimating the distribution of options and other derivative securities prices. Therefore, for the purpose of this description, it is assumed that all traders agree that the distribution of the basis of the state of the securities is log-normalized, so that: KD {r, 0) Z {τ, θ) Z {τ, θ) where " ~ "In the above formula, the left-hand side represents the last closing price of the security price at the time Θ will be known. The inverse of the expression of d ζ and region segmentation produces the following formula: -------------- install -------- order ------- --Line (Please read the notes on the back before filling this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs dz = In κ Ι \ σ ^ 4θ-τ] ZO (τ, θ) ZO (τ, θ) ^ Vi + x) ^ cdf (dzM) -cdf (dz) (1- /) where cdf (d ζ) is a progressive standard normal function -80- This paper scale applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) 473680 Α7 B7 V. Description of the invention (78) The assumptions and calculations reflected in the above formula can also be used to calculate symbolicity for a given set of DBARs or the beginning of a rightful trading period Profit (open profit) ri. In a preferred embodiment / the calculated open profit is based on an estimate of the best chance of the exchange rate required under the state limit, and therefore can provide a good profit indicator to the trader who is trading . Of course, the open profit need not be provided at all, and the amount invested during the trading period from beginning to end allows the calculation of the true expected profit at any time during the trading period. The following DBAR scope derivatives and other contingent examples are used to illustrate their operations, use them to connect with economically significant events involving potential or unknown risks, the advantages of DBAR or the right to exchange, and more Specifically, the system and method of the present invention. Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs (please read the notes on the back before filling out this page). In each example, a state is restricted to include the scope of possible economically significant events (for example, a stock price). A curved bracket "" or "" indicates a strict inequality (for example, "greater than" or "less than"), while a square bracket "[" or "]" indicates a weak inequality. For the sake of simplicity, unless otherwise noted, the following examples assume that the exchange fee f is zero. Example 3 · 1 · 1: DBAR or rights-based common stock underlying securities: Microsoft common stock ("MSFT") Date: August 18, 1999 Spot price: 8 5 Market movement: 50% per year Paper size applies Chinese National Standard (CNS) A4 (210 X 297 mm) _ 81-4736d0 A7 B7 V. Description of invention (79) Transaction start date: August 18, 1999. The market is open for trading. Date: August 18, 1999, Market Closing Expiry Date: August 19, 1999 Event: MSFT's Closing Price on the Expiry Date Transaction Period: One Day to TED Duration: One Day Bonus Payable on Expiry Date: Short-term inter-bank interest rate from zero to expiry date: 5.5% (actual days / 360 days per year) Current factor to expiry date: 0.9 9 9 8 4 7 Investment and expenditure unit: US dollars ("USD") in In this example 3.1, the pre-determined termination criterion is that during the trading period and when the Microsoft common stock market closes on August 18, 1999, the investment is in one contingent right. If all traders agree that the distribution of closing prices is a log-normalized distribution with 50% variability, then an "snapshot" of the distribution of investment amounts and profits for a billion-dollar investment would be easy The calculated chart is as follows: The paper size applies to the Chinese National Standard (CNS) A4 (210 X 297 mm) -82 · (Please read the precautions on the back before filling this page); · 1111111 Order · —1 — — — — — — Consumption Cooperation of Employees of Intellectual Property Bureau of the Ministry of Economic Affairs, printed by 473660 A7 B7 V. Description of Invention (80) Printed by the Consumer Cooperative of Employees of Intellectual Property Bureau of Ministry of Economic Affairs, Table 3.1.1-1 Investment (thousands) If the state occurs, the profit per unit (0,80) 1,046.58 94.55 (80,80.5] 870.67 113.85 (80.5,81] 1,411.35 69.85 (81,81.5) 2,157.85 45.34 (81.5,82) 3,115.03 31.1 (82 , 82.5] 4,250.18 22.53 (82.5,83) 5,486.44 17.23 (83,83.5) 6,707.18 13.91 (83.5,84) 7,772.68 11.87 (84,84.5] 8,546.50 10.7 (84.5,85) '8,924.7 1 10.2 (85,85.5) 8,858.85 10.29 ( 85.5,8 6] 8,366.06 10.95 (86,86.5] 7,523.13 12.29 (86.5,87) 6,447.26 14.51 (87,87.5) 5,270.01 17.98 (87.5,88) 4,112.05 23.31 (88,88.5) 3,065.21 31.62 (88.5,89) 2,184.5 44.78 (89,89.5 ] 1,489.58 66.13 Pack ----- r --- Order --------- line < Please read the precautions on the back before filling this page) This paper size applies to China National Standard (CNS) A4 (210 X 297 mm) -83- A7 Explanation (81) 11 ^ 5,90] (90, 〇972.56 1,421.61 101.82 69.34 In order to comply with a group of DBAR or a preferred embodiment with the right 'pair The amount of investment for any given state is related to the reciprocal of the unit profit for that state. In the preferred embodiment of D B A R or the right group, the trader may not invest and invest in one or more states. In the preferred embodiment, 'in order to generate a distribution of expected expenditures across states, it may be possible to allow traders to effectively invest in a set, sub-set, or combination of states. In particular, a trader may be interested in the distribution of response expenditures typically in the traditional market, such as spending corresponding to a long position stock situation, a short futures situation, or a long hedge option. If in Example 3 · 1 · 1 a trader thinks of extreme results in MSFT stocks, then the trader appears at the end of each of the distributions of the results. A trader may decide to invest $ 1 0 0,0〇 ( Please read the notes on the back before filling out this page.) The Consumer Cooperatives printed by the Intellectual Property Bureau of the Ministry of Economic Affairs may say that the state of $ 〇 $ 1 8 6 to $ 8 3 (ie (〇, 8 3)) 00 10,000 if the price exceeds $ 86 · 50 to hedge its possible investment in the state. For example, 0 at the price from, another investment state (ie (the trader may want to invest further, no matter which state actually occurs in these ranges) (When the state is within the range) When the pre-determined termination conditions are fulfilled, the same expenditure will be made. In Example 3 · 1 · 1 'a multi-state group of efficient single-state investments in each multi-state born in any Once the investment that generates a phase state is within the scope of i · II IIIII order -11 !!-* 5 ^ The scale is applicable to China National Standard (CNS) A4 (210 X 297 public love) -84 473660 A7 B7 V. Note (82) One of the numbers is invested in each state, in a proportion proportional to the investment before this state. For example, if the profit provided by Table 3 · 1 · 1 represents the last proposed at the end of the trading period Profit, each multi-state investment can be allocated on a proportional or proportional basis, based on the investment in the constituent state, and the relative amount at the end of the transaction, to the constituent state. In this way, more Multiple transactions are allocated to states with a large amount of investment and less to states with a small amount of investment. Other expected expenditure distributions across states can be achieved by allocating the amount of investment in the constituent states in different ways. Generated in order to obtain the allocation of a trader's expected expenditure. For example, a trader can choose the size of the expenditure and how these expenditures are allocated when the state occurs, and let the multiple state distribution method of the DBAR exchange decide (1) on each particular The amount of investment that makes up the state; (2) determines the state of the upcoming investment, and (3) The total amount to be invested will be invested into each state after the decision is made. The following other examples demonstrate how these choices can be assisted. Since, in the preferred embodiment, the last proposed profit has to wait until the end of a given transaction period It will be appreciated that in this preferred embodiment, a previous multi-state investment is periodically redistributed to its constituent states (and profits) at the amount invested in each state. Ends during the trading period When the transaction is stopped and the proposed profit is completed 'In the preferred embodiment, all multi-state investments are subject to a final redistribution. In the preferred embodiment, a suspended account is used to record and Reallocate the investment in multiple states at the end of the transaction and at the end of the transaction (please read the precautions on the back before filling out this page). Standards are applicable to China National Standard (CNS) A4 specifications (210 X 297 mm) • 85- 473680 A7 B7 V. Description of the invention (83) With reference to the previous description, it is assumed Multiple multi-state traders in the MSFT stock range (0, 83] and (86 · 5, ⑺), Table 3 · 1 · 1-2 indicates that each $ 10,000 multi-state investment can be based on the better The embodiment is assigned to individual states within each range, in order to obtain an equal payout for each multiple state range, regardless of which range the state occurs in. Especially in this description, the investment in multiple states is proportional to the amount of the previous investment in each state, and the multiple state investment is in the range of (0, 8 3] to (8 6 .5, ⑺) as expected, slightly lower. In order to show that the distribution in the example has reached its goal of giving the trader the expected expenditure, consider the two expenditures in the range (0, 8 3]. If the state (8 0 · 5, 8 1] occurs, Expenditure is the investment in this state ($ 7 · 6 9 6) multiplied by one plus the profit per unit if the state occurs, or (1 + 6 9 · 9 1) * 7 · 6 9 6 = $ 543. 40 . Therefore, in this description, the trader receives the same expenditure regardless of which of the multiple states occurs. For example, under the same assumptions, if the price of the stock is exactly in this range, all the conditions for termination are determined. Upon fulfillment, in the state [8 6 · 5, 8 7] you will receive an expenditure of $ 39 9. 8 0. In this description, each constituent state is in [8 6 · 5, 8], regardless of Which state occurs, you will receive a payment of $ 399. 80. This paper Zhang scale is applicable to China National Standard (CNS) A4 specification (210 X 297 mm) (Please read the precautions on the back before filling out this page) Order i IIIIII !!!-Printed by the Consumers' Cooperative of Intellectual Property Bureau of the Ministry of Economic Affairs -86- 473660 A7 B7 V. Description of the invention (84) Printed by the Consumers' Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs Table 3.1. Bu 2 The amount of the parent in the state (thousands) If the state occurs, each unit of profit has multiple states Allocation (thousands) (0,80) 1 052.29 94.22 5.707 (80,80.5) 875.42 113.46 4.748 (80.5,81) 1,419.05 69.61 7.696 (81,81.5) 2,169.61 45.18 1 1.767 (81.5,82) 3,132.02 30.99 16.987 (82,82.5 ] 4.273.35 22.45 23.177 (82.5,83) 5,516.36 17.16 29.918 (83,83.5) 6.707.18 13.94 (83.5,84) 7.772.68 11.89 (84,84.5) 8,546.50 10.72 (84.5,85) 8,924.71 10.23 (85,85.5 ] 8,858.85 10.31 (85.5,86) 8,366.06 10.98 (86,86.5) 7,523.13 12.32 (86.5,87) 6,473.09 14.48 25.828 (87,87.5) 5,291.12 17.94 21.111 (87.5,88) 4,128.52 23.27 16.473 (88,88.5) 3,077.49 31.56 12.279 ( 88.5,89] 2,193,25 44.69 8.751 (89,89.5) 1,495.55 66.00 5.967 ------------- ^ ----- r --- ^ --------- line: (Please read first Note on the back, please fill in this page again) This paper size is applicable to Chinese National Standard (CNS) A4 (210 X 297 mm) -87- 473680 A7 B7 (89.5,90) 976.46 101.62 3.896 (90, ~) 1,427,31 69.20 5.695 V. Description of the invention (85) ------------- Install --- (Please read the precautions on the back before filling out this page) Example 3 · 1 · 2: Status of active mines Investment i-line · Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs If there are several multi-state investments in a group of DBARs or rights, in a preferred embodiment, an iterative process can be used to allocate Investment in their multiple states into their individual constituent states. In a preferred embodiment, the goal is to allocate each multi-state investment to reflect changes in the investment amount during the trading period, and at the end of the trading period, make a final allocation so that each multi-state investment is generated Expected expenditure by individual traders. In the preferred embodiment, the process of allocating multiple state investments can be repeated because the allocation is based on transaction amounts that are distributed across states at any point in time. As a result, in the preferred embodiment, the allocation of a given transaction amount will result in the allocation of a particular multi-state investment. When other multi-state investments are allocated, the distribution of the amount of investment across a limited state may change, so that any previously allocated multi-state investments must be re-allocated. In a preferred embodiment, each multi-state allocation is re-executed, so that after a series of iterative calculations, after all approaching multi-state investments, both the amount of the investment and the state of the combination in the multi-state investment , After each successive successive iteration of the calculation, it does not change and obtains a convergent 値. In a preferred embodiment, when a convergence margin is obtained, subsequent iterative calculations and redistribution in multi-state investments will not change the distribution of any multi-state investments, and the distribution of the entire investment amount across states Will remain stable. As above, a moderate ruled paper 21 / V standard A4 S) AN (C quasi standard bidder 88 473630 printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7 i, invention code (86) computer code described in Table 1 or Familiar with the correlation code in this technique can be used to assist this iterative calculation step. A simple example demonstrates that in a preferred embodiment, an iterative calculation step can be used. For the sake of this example, 'in a better In the embodiment, the following assumptions are made: (i) there are four limited states in the DBAR or entitlement group; (ii) before any multi-state investment allocation, $ 1 0 0 has been invested in each state, So that the unit profit of each of the four states is 3; (i 1 1) for each expectation of each of the constituent states invested in a multiple state, no matter which state actually occurs, 'provides the same expenditure; And (1v) has invested in multiple states such as: ------------- install -------- order --------- line (please first (Read the notes on the back and fill in this page) Table 3.1.2-1 Investment State 1 State 2 State 3 State 4 Investment Amount $ 1001 XX 0 0 100 1002 X 0 XX 50 1003 XX 0 0 120 1004 XXX 0 160 1005 XXX 0 180 1006 0 0 XX 210 1007 XXX 0 80 1008 X 0 XX 950 1009 XXX 0 1000 1010 XX 0 X 500 1011 X 0 0 X 250 This paper size applies to China National Standard (CNS) A4 (210 X 297 mm) _ 89 _ 4736 0

iO A7 B7 Hair: Product Description (87)

1017-^ ----

1016 X X

X

X 1018 ------ 1019 1020 1021 1022

X

X

X

X

X

X

X

X

X

X

X

X

X

X 120 1000 200 250 300 100 Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 400 where “X” in each state represents a constituent state of a multi-state investment transaction. Therefore, as shown in Table 3 · 1 · 2 _ i, the transaction code 1 0 0 1 in line ^ is a multi-state investment of $ 1 0 0 which will be allocated to states 丨 and 2 'in the second line Transaction code 丨 002 is another multi-state investment of $ 50 that will be allocated to states 1, 3, and 4; and so on. Applying to the multi-state investment described in the above example, the above iterative steps and the practical application of the computer code in Table 1, the following allocations are obtained: This paper size applies to the Chinese National Standard (CNS) A4 specification (210 X 297 meals) ) .G〇- I ---- installation ------- order ---- I ---- line (Please read the precautions on the back before writing this page) 473680 A7 B7 V. Invention Explanation (88) Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs 3.1.2-2 Investment Number Status 1 ($) Status 2 ($) Status 3 ($) ___— Status 1001 73.8396 26.1604 0 〇 ___ 1002 26.66782 0 12.53362 10.79856 1003 88.60752 31.39248 0 〇_- 1004 87.70597 31.07308 41.22096 0 1005 98.66921 34.95721 46.37358 0 1006 0 0 112.8081 97.19185 1007 43.85298 15.53654 20.61048 0 1008 506.6886 0 238.1387 205.1726 1 009 548.1623 19.6 10 1960 1020 1020 73.8396 26.1604 0 0 1013 340.1383 0 159.8617 0 1014 0 466.6488 0 533.3512 1015 0 73.06859 96.93141 0 1016 0 55.99785 0 64.00215 1017 680.2766 0 319.7 234 0 1018 0 0 107.4363 92.56367 1019 137.0406 48.55168 64.40774 0 1020 170.5306 60.41675 0 69.05268 1021 0 28.82243 38.23529 32.94229 — — — — — — — — I 111 · IIIIIII. ^ 1111111 ， (Please read the notes on the back before filling in this page ) This paper size applies to China National Standard (CNS) A4 (210 X 297 mm) -91.473680 B7 A7 L, Description of Invention (89) 1022 213.3426 0 100.2689 86.38848 In the table: 3 · 1 · 2 _ 2, Each row represents the allocation between each of the constituent states of the multi-state investment. Enter into the opposite row of Table 3. 丨. 2 _ i 'in Table 3 · 1 · 2 — 2 in the first line of the transaction code 1001' where $ 73 · 8396 of the $ 100 has been allocated to state 1 and the rest to state 2. From the multi-state allocation obtained from the above results, it can be seen that the expenditure allocated to the parent is expected by the parent-one that is, the expected expenditure in the example, regardless of the composition of the given multi-state investment Which of the states occurs is the same. Based on the reaction table 3 · 1 · 2 — 2 and the total amount invested and assuming that the non-use of the transaction is zero, the unit profit for each state is: State 1 State 2 State 3 State 4 Profit per investment 1.2292 5.2921 3.743 1 4.5052 Consider In this example, the investment No. 10 2 2 illustrates the unity of expenditure when the investment is completed in one state (that is, states 1, 3, and 4). If state 1 occurs, the total payout to the trader is the unit profit of state 1-1 · 2 2 9 2-multiplied by the transaction amount in state 10 2 2 state 1-$ 213 · 3426-plus the initial The transaction-$ 213.3426. This is equal to 1.2292 * 213. 3426 + 213. 3426-S475. 58. If state 3 occurs, its expenditure is equal to 3 · 7 4 3 1 * This paper size applies the Chinese National Standard (CNS) A4 (210 χ 297 mm) (Please read the precautions on the back before filling out this page) i ·! Order IIIII — — — — — — — —- Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs 473630 Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 ____B7___ V. Description of the invention (9〇) 100. 2689 + 100. 2689- $ 475. 58. Finally, if state 4 occurs, its payout is equal to 4 · 5 0 5 2 * 86 · 38848 + 86. 38848 = $ 475. 58. Therefore, in this example problem, a preferred embodiment of a multi-state allocation has affected the distribution among the composition states, so that (1) the expected expenditure distribution is reached in this example problem, that is, the expenditure to composition states are the same No matter which constituent state occurs, and (2) the further allocation of multiple multi-state investments will not change the relative investment amount across all state investments. Example 3. 1.3: Interactive price distribution Hypothesis about a group of DBAR or entitlement transactions with similar distributions. For example, it can be used to calculate the investment amount of each unit at the beginning of each transaction period. Profit ("open profit"). For a variety of reasons, the amount of money invested in each state may not reflect these assumptions used to calculate open profits. For example, an investor may infer that the profit distribution derived from experience on the horizontal axis of time may be different from the assumption that there is no case usually used in the option price. Rather than a log-normal distribution, many investors expect a positive return on their investment rather than a negative number (perhaps they prefer the news). In Example 3 · 1 · 1, for example, if a trader invests more in a state than $ 85 in MSFT common stock, the state's profit below $ 8 5 may be higher than the state's profit above $ 8 5 a lot of. In addition, the price of the option of the transaction indicates that the price distribution is significantly different from the standard paper size applicable to the Chinese National Standard (CNS) A4 (210 X 297 mm) · 93-(Please read the precautions on the back before filling this page) Install -------- order --------- line 473680 Α7 ----------- B7 V. Description of the invention (91) Same as the theoretical logarithmic normal distribution or Similar theoretical distributions are well known to derivative traders. The so-called volatile deflection or “smile curve” of money shortage is that the options trading is more volatile than placing options closer to money. This shows that traders usually expect a higher frequency distribution of prices or focus on final observations rather than predictions based on a log-normal distribution. Roughly, this effect is not uniform. For example, the probability of a large number of low-cost results is higher than the extremely high results. As a result, in the present invention, a group of D B A R may have the right, state investment in these areas may be more common, and the result that profits eventually appear in these areas is lower. For example, using the information that may occur from the basic DBAR from Example 3.1.1, the following profits are prevalent because of the investor ’s expectations of profit distributions, which occur more frequently than those predicted by the log-normal distribution, and therefore Is skewed to lower possible profits. In a statistical way, this distribution shows a higher degree of kurtosis and is negatively tilted compared to the distribution illustrated in Example 3 · 1 · 1 and is reflected in Table 3.1 · 1.1 · 1. — — — — — — — — — — 1 — — — — — — II ^ · 11111111 (Please read the notes on the back before filling out this page) Printed on paper scales applicable to Chinese national standards (CNS) A4 specifications (210 X 297 public love) -94-473660 A7 B7 V. Description of the invention (92)

Table 3.1.3-1: DBAR showing negative slope and small steepness profit distribution Printed by the Intellectual Property Office of the Ministry of Economic Affairs Employee Consumer Cooperatives or entitled to state investment (thousands) If the state occurs, the profit per unit ( 0,80] 3,150 30.746 (80,80.5) 1,500 65.667 (80.5,81) 1,600 61.5 (81,81.5) 1,750 56.143 (81.5,82) 2,100 46.619 (82,82.5] 2,550 38.216 (82.5,83) 3,150 30.746 (83 , 83.5] 3,250 29.769 (83.5,84) 3,050 31.787 (84,84.5) 8,800 10.363 (84.5,85) 14,300 5.993 (85,85.5) 10,950 8.132 (85.5,86) 1 1,300 7.85 (86,86.5) 10,150 8.852 (86.5 , 87] 11,400 7.772 (87,87.5) 4,550 20.978 (87.5,88) 1,350 73.074 (88,88.5] 1,250 79.0 (88.5,89) 1,150 85.957 ^ ------- It ----- I-- -^ (Please read the precautions on the back before filling this page) This paper size is applicable to China National Standard (CNS) A4 (210 X 297 mm) ^ 95 _ A7 _____ B7 (89,89.5) 700 141.857 (89.5, 90] 650 152.846 (90,00] 1,350 73.074 4736 ㈣ V. Description of the invention (93) In Table 3 · 1 · 3-1, a compound distribution in the traditional market is Often common. Derivatives, actuaries, risk managers, and other traditional market participants often use sophisticated mathematical and analytical tools to estimate the statistical nature of the future distribution of risky market outcomes. These tools are often borrowed A collection of incomplete or unreliable data (for example, previous time series, option data). One advantage of the system and method of the present invention is that such analysis from previous data does not need to be very complicated and is based on any given A group of DBARs may have the right to allocate all the results, which can be obtained by traders and other interested parties at any time after each investment. Example 3 · 1 · 4: A state defined for the same profit in the present invention In the preferred embodiment, a group of DBARs with irregular or asymmetrically distributed intervals may have the right to define the state at the same time, for example, to make the transaction amount across states more liquid or singular. The state can be constituted by a proper estimate of the final distribution of the transaction amount to obtain the appropriate investment amount, and thus the profit of each state 'can be unitized as much as possible across the state distribution. The diagram below uses the degree of freedom from the events and trading periods in Example 3, 1 and 1 to define the state in order to promote the equalization of the amount of proper investment in each state. (Please read the notes on the back before filling out this page) • Install -------- Order ------ I--line. Printed by the Consumers' Cooperative of Intellectual Property Bureau of the Ministry of Economic Affairs This paper is suitable for China National Standard (CNS) A4 Specification (210 X 297 Meals) I 96-473660 A7 B7 V. Description of Invention (94) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs Table 3.1.4-1: Definition to get the cross-border status Appropriate singularity status State investment in state (thousands) If state occurs, profit per unit (0,8 1.403] 5,000 19 (81.403,82.181] 5,000 19 (82.181,82.71) 5,000 19 (82.71, 83.132] 5,000 19 (83.132,83.497) 5,000 19 (83.497,83.826) 5,000 19 (83.826,84.131) 5,000 19 (84.131,84.422) 5,000 19 (84.422,84.705) 5,000 19 (84.705,84.984) 5,000 19 (84.984,85.264 ] 5,000 19 (85.264,85.549] 5,000 19 (85.549,85.845] 5,000 19 (85.845,86.158] 5,000 19 (86.158,86.497) 5,000 19 (86.497,86.877) 5,000 19 (86.877,87.321) 5,000 19 (87.321,87.883) 5,000 19 (87.883,88.722) 5,000 19 (88.722, 〇〇) 5,000 19 (Please read the Please fill in this page again for the matters needing attention)-«· 1111111 ^ 11111111 -97- This paper size is applicable to China National Standard (CNS) A4 (210 X 297 mm) 4736〇 A7 ____B7 V. Description of the invention (95) The expectation is consistent with the assumption of the log-normal distribution that is often used, as it is reflected in this example, as shown in Table 3. ♦ 1 · 4 — 1 group of DBAR or entitlement investment activities, the other 2 0 in the table Each of these states will converge to the same investment amount. Of course, the actual transaction will be very possible. The profit that can generate the final market is separated from those initial choices for the convenience of using the log-normal distribution. Example 3 · 1 · 5: The state of one-by-one constitution of government bonds To an illustrated DBAR contingent group, the termination criteria and other relevant information based on the previously determined termination status of a US Treasury bond are set as follows: Basic bonds: US Treasury bonds ， 5 · 5% > 5/31/0 3 (Please read the notes on the back before filling in this page) Install LO 2 3 \ \ 6 5 The settlement period is 9 9 9 4 Hour K H 咅 Dongpan closing market 9 9/2/7 Maturity rights are available or ordered --------- Printed by the Consumers' Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs • Issue m Issue m times · P Easy · Easy · Two P ο Cross P Cross P Cross ο ο ο ο ο. · Nu ♦. The beginning of the 4 time divisions 9 9 \ 5 2/6 • The beginning of the 4 time periods m 9 9 \ 8 2/6 The cut-off time is 4 hours and the time is 9 9 \ 8 2/6 and the opening time is easy. The paper size is applicable to China National Standard (CNS) A4 (210 X 297 mm). 98-473660 A7 _B7__ V. Invention Note (96) The end of the next trading period: 6/2 9/9 9, 4: 00 ρ · m · Eastern Time (Please read the notes on the back before filling this page) Event: The price of the closing synthesis expires on request Time, quoted price in Bruberger Transaction time: One day from TED: Five days coupon: 5 · 5% Expenses: Calculated every six months Daily basis: Actual days / dividends payable on actual days Time: 6/3 0/9 9, 2.75 percent Interest rate on the repurchase agreement of the Ministry of Finance bonds: 4 · 0% (actual days / 3 6 0) Spot price: 9 9 · 8 1 2 5 Full price: 99 · 7857 Price variability: 4 · 7% Units of transactions and expenditures: Printed by the Consumer Consumption Cooperative of the Intellectual Property Bureau of the US Ministry of Economic Affairs 5.2 billion ο 5 ο $: 〇 求 C 求5 points and 2 points of the general standard: Easy to pay before payment -99- This paper size is applicable to China National Standard (CNS) A4 (210 X 297 mm) 4736〇 A7 B7 V. Description of the invention (97 ) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs. 3.1.5-1: DBAR in government bonds or state-owned investments. If the state occurs, the profit of each ($) unit (0,98) 139690.1635 356.04 (98,98.25) 293571.7323 168.89 (98.25,98.5) 733769.9011 66.97 (98.5,98.75) 1574439.456 30.68 (98.75,99) 2903405.925 16.18 (99,99.1) 1627613.865 29.64 (99.1,99.2) 1914626.631 25.05) (29.29.295) (99.3,99.4) 2464704.885 19.24 '(99.4,99.5) 2697585.072 17.49 (99.5,99.6) 2882744.385 16.30 (99.6,99.7) 3008078.286 15.58 (99.7,99.8) 3065194.576 15.27 (99.8,99.9) 3050276.034 15.35 (99.9,100) 2964602.039 15.82 ( 100,100.1] 2814300.657 16.72 (100.1,100.2) 2609637.195 18.11 (100.2,100.3) 2363883.036 20.10 (100.3,100.4) 2091890.519 22.84 (100.4,100.5) 1808629.526 26.58 ------------- I illli til —! (Please read the precautions on the reverse side before copying this page) The paper size is applicable to the Chinese National Standard (CNS) A4 (210 X 297 mm) -100- 4736 Fifth, the description of the invention (98) A7 B7 0 00.5, 1 00.75] 3326547.254 13.99 0 00.75,1 0 1] 1899755.409 25.25 001,101.251 941506.1374 51.97 001.25,101.51 405331.6207 122.05 (1 0 1.5, 〇〇) 219622.6373 226.09 (Please read the notes on the back before filling this page) This example 3 · 1 · 5 and Table 3 · 1 · 5 — 1 explain how the system and method of the present invention #enough to easily use the source of risk, whether from the requirements of stocks, bonds, or insurance. Table 3 · 1 · 5-1 also shows an irregularly spaced distribution of limited states-this situation is better at the middle of the distribution and worse at both ends-in order to increase the total investment in the final state. Example 3 · 1 · · 6: High-quality asset allocation-a single region of the Intellectual Property Bureau of the Ministry of Economic Affairs employee employee cooperatives prints the system and method of the present invention. One of the advantages is the construction of a DBAR or Ability to have the right group. For example, many index fund managers usually have a basic view of whether high-quality fixed income securities will be better than most equity indexes. This concept is usually controlled by the manager's model to allocate funds between most asset classes like fixed income securities, net assets or cash management. This example 3.1.6 illustrates the use of a preferred embodiment of the system and method of the present invention to make one asset class superior to the other in a real-world event and make a safe-haven investment. This is used in this example. The paper size applies to the Chinese National Standard (CNS) A4 specification (210x297 mm) for contingent rights. 101- 473680 Α7 _ Β7 Printed by the Intellectual Property Bureau Staff Consumer Cooperatives of the Ministry of Economic Affairs 5. The distribution of the investment explained and the calculated initial profit are based on the assumption that the level of the relevant asset class index is a normal distribution of the interconnected index with a hypothesis. By defining a set of D B A R or a common result that is entitled to two potential events, traders can express their views on the common changes in potential events when recorded by the interrelationship between events. In this example, the assumption of the normal distribution of the interconnected index means that the relationship between the two events is as follows: η νλτ Ρχ {τ, θ) \ -σ \! 2 * {θ-τ) ^ σι * ^ * άζι ζι ( τ ^ Υ ζιΜ) V; 1 Ώ% θγ Zn2 {τ, θ) Zn2 {τ, θ) g (dz ', dz2): h2 (Please read the notes on the back before filling this page) 〇-σ \ ΐ2 * (θ-τ) ^ ea2 * yfF: T * dz2 • exp (dzf -f dz \ -2 * p ^ dzx * dz2) 2 * (lV). The subscripts: and superscripts indicate that in two events G (dzi, dz 2) is a bivariate normal distribution with associated parameter p, and the other symbols are equivalent to the symbols used to describe derivatives of the DBAR range in the above formula. The following information includes indicators, trading periods, previously determined termination criteria, total investment, and monetary units used in this example 3 · 1 · 6: Asset Class 1: JP Morgan United States Government Bond Index ("JPMGBI ,," Asset Class 1 Price quoted at the time of observation: 2 5 0. 0 Asset class 1 variability: 5% Asset class 2: S & Ρ 5 0 0 Asset index ("equipment -------- order ---- ----- Line · This paper size applies Chinese National Standard (CNS) A4 specification (210 X 297 mm) _ 473660 A7 _B7__ V. Description of the invention (10C) SP 5 0 0 ,,) Asset level 2 is under observation Price proposed at the time: 1 4 1 0 Asset level 1 variability: 18% Correlation between asset levels: 0 · 5 Contingent rights expiry: 12/31/99 Transaction start date: 6/30/99 Current transaction Period start date: 7/1/9 9 Current transaction period end date: 7/3 0/9 9 Next transaction period starts: 8/2/9 9 Next transaction period ends: 8/3 1/9 9 Today Date: 7/12/99 End of the last trading period: 1 2/3 0/9 9 Total investment during the current trading period: $ 100 billion Transactions and expenses Unit: USD Table 3.1.6 shows a description of the state profit distribution in a limited state based on the common results based on this information. --II ---- I--I-· IIIIIII Order IIIIIII-(Please read the notes on the back before filling out this page) This paper size applies to China National Standard (CNS) A4 (210 X 297 mm)- 103- 473680 Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7 V. Description of the invention (101) Lane 3.1.6-1: S & P 5 00 and unit profit jointly completed by JPMGBI JPMGBI State (0,233) (233, 2371 (237, 241) (241, 244) (244, 246] [246, 2481 (248, 250] 252] [2 ^ 2, 255] (2bb, 257] (2b /, 259) 264] (264, 268 ] (268, 00) (0.11021 246 240 197 413 475 591 798 1167 1788 3039 3520 2330 11764 18518-(1102,1174) 240 167 110 197 205 230 281 373 538 841 1428 1753 7999 11764 (1174,1252) 197 110 61 99 94 98 110 135 180 259 407 448 1753 5207 (1252,1292) 413 197 99 145 130 128 136 157 197 269 398 407 1428 5813 (1292,1334) 475 205 94 130 113 106 108 120 144 189 269 259 841 3184 ( 1334,13771 591 230 98 128 106 95 93 99 115 144 197 180 538 1851 SP500 (1377,1421) 798 281 110 136 108 93 88 89 99 120 157 135 373 1 167 (142-1,1467) 1167 373 135 157 120 99 89 88 93 108 136 110 281 798 (1467,1515) 1851 538 180 197 144 115 99 93 95 106 128 98 230 591 (1515,15641 3184 841 259 269 189 189 144 120 108 106 113 130 94 205 475 (1564, 1614) 5813 1428 407 398 269 197 157 136 128 130 145 99 197 413 (1614, 1720) 5207 • 1753 44P 407 259 180 135 110 98 9A 99 61 11C 197 (1720 , 18341 11764 799S 175? 142f 841 538 373 281 23C 20 £ 197 11C 167 240 (1834, 〇〇) 18518 11764 233C 35? C 303f 1788 1167 798 591 47 £ 412 197 24C 246 In Table 3 · 1 · 6-1 In each cell, the unit profit is reflected by the row and column items reflecting the common state. For example, the status of an investment in a unit profit of JPMGBI at the closing expiry of 249 and SP500 closing at 1380 is · 8 8. Since the correlation between the two principal numbers is assumed to be 0.5 in this example, the probability that the two indices will change in the same direction is greater than the probability that the two indices will change in the opposite direction. In other words, as shown in Table 3 · 1 · 6-1, in the upper left and lower right corners of the table, the unit profit of the investment in the state-that is, an index changes in the same direction-reflects the more powerful The probability is lower than the lower left and upper right boxes in the table-that is, the two indices change in the opposite direction. As in the previous example and in the preferred embodiment, the profit shown at the 3 · 1 · 6-1 table can start at every trading period, based on a possible forecast of the closing profit during the trading period, to open the index Calculate the profit. These indicated or open profits can be regarded as a set of paper standards applicable to the Chinese National Standard (CNS) A4 specification (21〇X 297 Chu) -104---- — — — — — — —. IIIIIII Order 11! 111 · * ^ (Please read the notes on the back before filling out this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 _____ B7 V. Description of the invention (102) DBAR or a right to start the transaction Anchor. " Of course, 'actually, the transaction and the trader's expectations may cause some deviations from the instructions. Dad Example 3 · 1 · 7: The corporate bond credit risk DBAR or the right group may be sufficient when asked about credit events, such as One of many credit rating agencies (such as Standard and Poole, Moody's) changed some or all of the listed company's events. The index profit that originated from a credit event at the beginning of a group of DBA or contingent transactions can be easily constructed from the publicly available information of these credit rating agencies themselves. For example, Table 3.1.7-1 contains a hypothetical, indexed profit of a D B AR or contingent group based on a company's criteria and a Poll's credit assessment of a particular security that is about to change over a specific period. In this example, the status is defined using the criteria and the type of the Poll's credit evaluation, and the evaluation results range from A A A to D. Using the method of the present invention, this index profit is calculated using the frequency with which the previous data occurred in these limited states. & In this example, a 1% transaction fee is charged on investments that are aggregated in DBA R or a rights group. The amount is assumed to be $ 100 million. ------------- Installation · ------ ^ Order --------- Line (Please read the precautions on the back before writing this page) This paper size Applicable to China National Standard (CNS) A4 specification (210 X 297 mm) 105 473660 A7 B7 V. Description of the invention (103) Table 3.1.7-1: Credit DBAR with 1% transaction fee or the right to demonstrate the benefits The Consumer Property Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs prints the current rating of the new rating history. The status of the investment ($) indicates the return of the status. Α- ΑΑΑ 0.0016 160,000 617.75 Α- A Α + 0.0004 40,000 2474.00 Α- AA 0.0012 120,000 824.00 Α- AA- 0.003099 309,900 318.46 Α- A + 0.010897 1,089,700 89.85 Α- A 0.087574 8,757,400 10.30 Α- A- 0.772868 77,286,800 0.28 Α- BBB + 0.068979 6,897,900 13.35 Α- BBB 0.03199 3,19-98. Α- BB + 0.002299 229,900 429.62 Α- BB 0.004999 499,900 197.04 Α- BB- 0.002299 229,900 429.62 Α- B + 0.002699 269,900 365.80 Α- B 0.0004 40,000 2474.00 Α- B- 0.0004 40,000 2474.00 Α- CCC IE D 0.0008 8 0,000 1236.50 (Please read the notes on the back before filling this page) ^ ----------------- ^ In Table 3.1.7. All depleted state This paper size is in accordance with Chinese National Standard (CNS) A4 (210 X 297 mm) -106-473680 A7 __ B7 5. Description of the invention (104) The total probability is equal to 1. As described above in this description, in the preferred embodiment, the transaction fee from this state of unit profit affects each state. Actual trading is almost always expected to alter the indicative profit based on / explained from previous empirical data. This example 3 · 1 · 7 indicates how D B A R or the right group can be efficiently constructed by all traders or enterprises exposed to specific credit risk to make hedge investments in this risk. For example, in this example, assuming that a trader has apparently exposed the above-mentioned public debt of grade A, the trader may want to make a safe-haven investment in the event downgraded by the standard and the Poole assessment. For example, this trader may be particularly concerned about events that are downgraded to the issuer's implied 値 or classified as "D". This empirical probability suggests that for every dollar invested in this state, the expenditure would be approximately $ 1, 2 37. If this trader has a $ 100 million corporate bond issued by the company in its portfolio and the event has an expected recovery rate of .0.3, in order to make a hedge investment of $ 70 million in hidden risk, The trader's possible investment evaluation results are in a state near "D ,," in the example. In order to make a hedge investment for the entire investment at hidden risks, the amount in this state should be $ 70,00. 〇〇〇 / $ 1,237 or $ 56,589. This represents the basis point for approximately 5.66 traders in this corporate debt position (ie, $ 56,589 / S 100 »000» 000 = 0.0056), which Dasao represents a reasonable credit insurance against a reasonable cost of implied tadpoles. Actually investing in this group of DBARs may have the right to change the profits of events in time "D" grade, and may need to purchase additional insurance. (Please read the precautions on the back before filling out this page.) Packing ----- II--Order --- I --- 1 Printed on paper scales of the Intellectual Property Bureau Staff Consumer Cooperatives of the Ministry of Economic Affairs, China National Standards (CNS) A4 size (210 X 297 mm) -107- Ministry of Economic Affairs Printed by the Intellectual Property Bureau Staff Consumer Cooperative 473680 A7 _ B7 V. Description of the Invention (105) Example 3.1.8: Economic Statistics Another advantage of the system and method of the present invention is that they allow market participants to It is possible to make a safe-haven investment in the event during the event, which is not directly possible in traditional markets. For example, traders usually invest in inflation insurance by trading public debt futures, or there is Protect inflationary floating rate bonds. A set of DBARs can easily be constructed to allow traders to express expectations of statistical measures of uncertainty accumulation, such as inflation rates or other related variables. The following information describes this A set of requirements: Economic Statistics: US Non-Livestock Salary Book Announcement Date: 5/31/99 Previous Announcement Date: 4/3 0/9 9 Expiry Date: Announcement Date, 5/31/99 Transaction Start Date : 5/1/9 9 Start date of current trading period: 5/1 0/9 9 End date of current trading period: 5/14/99 Start date of next trading period: 8/2/9 9 Today's date: 5 / 11/9 9 Previous Announcement ·· 128,156 ('000') Source: Bureau of Labor Statistics Census Estimate: 1 3 0, 0 0 0 (+ 1 · 2%) Total investment during the current trading period: $ 100 billion transaction costs : 2% of the total investment during the transaction I — — — — — — — —. IIIIIII ^^ „1111111„ ^^ (Please read the precautions on the back before filling out this page) The paper size applies to Chinese National Standard (CNS) A4 Specifications (210 X 297 mm) -108- 473680 A7

7 R V. Description of the invention (106) Using the system and method of the present invention, the state can be defined and the indexed profit can be constructed from the economist's survey estimates of this index. These estimates can be expressed in absolute terms or as a percentage change from the previous observation in Table 3 · 1 · 8-1 as follows: Table 3.1.8-1: Non-Livestock Payroll Books with 2% Transaction Costs The benefits explained by Xi (please read the precautions on the back before filling out this page) ----------- Order --------- The Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economy printed on the status of the indicators Implied state probability of investment state profit% change in capital (thousands) [-100, -5] 100 979 0.001 (-5, -3] 200 489 0.002 (-3, -1) 400 244 0.004 (-1, -5 ] 500 195 0.005 (-.5,0) 1000 97 0.01 (0, .5) 2000 48 0.02 (.5, .7) 3000 31.66667 0.03 (.7, .8) 4000 23.5 0.04 (.8, .9) 5000 18.6 0.05 (.9, 1.0) 1 0000 8.8 0.1 (1.0, 1.1) 14000 6 0.14 (1.1, 1.2) 22000 3.454545 0.22 (1.2, 1.25) 1 8000 4.444444 0.18 (1.25, 1.3) 9000 9.888889 0.09 (1.3, 1.35 ] 6000 15.33333 0.06 (1.35, 1.40] 3000 31.66667 0.03 This paper size applies to China National Standard (CNS) A4 (210 X 297 mm) -109- 473680 A7 R7 V. Description of the invention (107) (1.40, 1.45) 200 489 0.002 (1.45,1.5) 600 162. 3333 0.006 (1.5,1.6) 400 244 0.004 (1.6,1.7) 100 979 0.001 (1.7,1.8) 80 1224 0.0008 (1.8,1.9) 59 1660.017 0.00059 (1.9,2.0) 59 1660.017 0.00059 (2.0,2.1) 59 1660.017 0.00059 (2.1,2.2) 59 1660.017 0.00059 (2.2,2.4) 59 1660.017 0.00059 (2.4,2.6) 59 1660.017 0.00059 (2.6,3.0) 59 1660.017 0.00059 (3.0, 〇〇) 7 1 3999 0.00007 (Please read the notes on the back first (Refill this page) Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economy To adjust profits. Example 3 · 1 · 9: Company events The company's actions and announcements are further examples of economically significant events. These are usually not hedged and insured in traditional markets, but according to the invention, they can be effectively The structure becomes DBAR or has right group. Examples of such corporate events are earnings announcements, which are generally quarterly for publicly traded companies. Many information services, such as IBES and -1 · 11 ----- Order ·! --- II. This paper size applies to China National Standard (CNS) A4 (210 X 297 mm) -110- 473680 A7 --__ B7 _ V. Description of the invention (108)

FirstCall et al. Currently make estimates by analysts and a census estimate before the quarterly earnings announcement. At the beginning of the transactions described below, these estimates may form the basis for the index's open profits. In this example, assume that the transaction fee is zero. Basic Securities: IB Μ Earnings Announcement Date: 7/2 1/99 Census Estimate: 0 · 8 7 9 / Share Expiry Date: Announcement Date, 7/21/99 First Trading Start Date: 4/1 9/9 9 First transaction deadline: 5/19/99 Current transaction period start date: 7/6/99 Current transaction period end date: 7/9/99 Next transaction period start date: 7/9/9 9 Next time Closing date of the trading period: 7/1 6/9 9 Total investment during the current trading period: $ 100 million (please read the notes on the back before filling out this page) Printed by the Intellectual Property Bureau Staff Consumer Cooperatives of the Ministry of Economic Affairs ΐ Paper standards apply China National Standard (CNS) A4 Specification (210 X 297 mm) -111- 473660 A7 B7 V. Invention Description (109) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 3.1.9-1: ΙΒΜ surplus announcement Investment in the state of the state of profit surplus (thousands) Implied state probability of unit profit (-°°, .5] 70 1,427.57 0.0007 (.5, .6) 360 276.78 0.0036 (.6, .65) 730 135.99 0.0073 (.65, .7) 1450 67.97 0.0145 (.7, .74) 2180 44.87 0.0218 (.74, .78) 3 630 26.55 0.0363 (.78 .8] 4360 21.94 0.0436 (.8, .82) 5 820 16.18 0.0582 (.82, .84) 7270 12.76 0.0727 (.84, .86) 8720 10.47 0.0872 (.86, .87) 1 0900 8.17 0.109 ( .87, .8 8] 18170 4.50 0.1817 (.8 8, .99) 8720 10.47 0.0872 (.89, .9) 7270 12.76 0.0727 (.9, .91) 5090 18.65 0.0509 (.91, .92) 3 630 26.55 0.0363 (.92, .93) 2910 33.36 0.0291 (.93, .95) 2180 44.87 0.0218 (.95, .97) 1450 67.97 0.0145 (.97, .99) 1310 75.34 0.0131 (.99,1.1) 1160 85.21 0.0116 ^ -------- ^ --------- (Please read the precautions on the back before overwriting this page) The paper size applies to China National Standard (CNS) A4 (210 χ 297 (Mm) -112-Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 V. Invention Description (110) A7 B7 (1.1,1.3) 1020 97.04 0.0102 (1.3,1.5) 730 135.99 0.0073 (1.5,1.7) 360 276.78 0.0036 (1.7,1.9) 220 453.55 0.0022 (1.9,2.1) 150 665.67 0.0015 (2.1,2.3) 70 1,427.57 0.0007 (2.3,2.5) 40 2,499.00 0.0004 (2.5, 〇〇) 30 3,332.33 0.0003 The state with the largest investment is in ( 0 · 8 7, 0 · 8 8] near the range, Census estimates consistent. Example 3 · 1 · 10: Real estate Another advantage of the system and method of the present invention is the ability to organize the right to circulate claims on illiquid basic assets such as real estate. As discussed previously, in order to function properly, traditional derivative markets usually utilize a circulating base market. In a group of D B A R contingent, it is usually necessary to indicate economically significant observable events in the real world. For example, a few years ago some financial institutions have tried to establish contingent rights associated with real estate. These efforts have not had a significant effect, apparently because of restrictions on the liquidity of underlying real property that is lurking. A set of DBA R in accordance with the present invention can be composed based on an observable event related to real estate. A set of relevant information about DBAR may be as follows: This paper size is applicable to China National Standard (CNS) A4 specification (210 X 297 mm)-"-113- ~ (Please read the precautions on the back before filling this page )

-I --- 1111 I order 11 I II I 473630 A7 B7 V. Description of the invention (111)

Real estate index: Collier ABR Manhattan office building lease Bloomberg stock market indicator · COLAMANR update frequency: monthly source · Collier ABR Co., Ltd. Announcement date: 7/31/99 Announcement date: 6 / 30/99 Last index: $ 45 · 39 / sq ft Census estimate: $ 4 5 · 50 0 Expiry date: Announcement date 7/31/99 Current transaction period start date: 6/3 0/9 9 Current transaction Period deadline: 7/7/99 Date of next transaction period: 7/7/9 9 Date of next transaction period ·· 7/1 4/9 9 In order to shorten the space, the total investment in various states in this example The limit status of the amount and the open index or stated profit result are not listed, but can be calculated or calculated by the method of Example 3 · 1. 1.1-3 • 1 · 9 of the present invention from the actual trader's The investment is showing. Example 3.1.11: A group of DBARs in the energy supply chain may have the right to use the methods and system components of the present invention to provide a large number of economically important events that cannot be traded in the supply chain of a specific industry. Tools for safe-haven investments. For this application, the paper size applies to the Chinese National Standard (CNS) A4 (210 X 297 mm) -114-(Please read the precautions on the back before filling this page) ------- Printed by the Consumer Property Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs Printed 473680 A7 One B7 V. An example of the invention description (112) is currently used in the United States Oil rig for petroleum products. Drilling rigs are quite sensitive to energy prices, and their totals have a tendency to adjust slowly to quantities. Therefore, a properly constructed D AR or right group based on the number of rigs may enable suppliers, manufacturers, and drillers to avoid exposure to instantaneous changes in energy prices and provide a valuable risk-sharing device. For example, a group of DBARs that rely on the number of rigs may be able to use the following information (eg, source of data, suspension conditions) to build according to the present invention: Asset index: Baker Hughes rig US total Brumberg stock market indicator: BAKETOT Update Frequency: Weekly Sources · Baker Hughes Co., Ltd. Announcement Date: 7/16/99 Last Announcement Date: 7/9/9 9 Expiry Date: 7/16/99 Transaction Start Date: 7/9 / 9 9 Transaction deadline: 7/15/99 Previous time: 5 7 0 Census estimate: 5 8 0 In order to shorten the space, in this example, the limited status of the total investment amount in various states and the open index or stated profit result It is not listed, but it can be calculated or calculated according to the example of the present invention. 3.1. This paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -115- --- ---- I ----------- II Order ---- II --- * 3 ^ (Please read the precautions on the back before filling out this page) Employees ’Cooperatives, Intellectual Property Bureau, Ministry of Economic Affairs Printing 473680 A7 _____ B7 V. Description of the invention (113) • 1 · 9 method, from the actual transaction Investment revealed. Example 3 · 1_ · 1 2: Mortgage prepayment risk Real estate mortgages constitute a bourgeoisie with tens of thousands of extremely large fixed incomes in the capital market. Mortgage markets are generally considered not only susceptible to interest rate risk, but borrowers will use options to refinance their mortgages, or to “pay upfront” the risk of their existing mortgages. The owner of a mortgage bond therefore bears the risk of being called out when the interest rate drops. Such risks cannot be directly hedged in the current market. However, according to the present invention, this risk can be used as a hedging investment or insurance with the structure of D B A R or a right group. This contingent group can, for example, be constructed based on the following information: Asset index: 30-year progressive monthly advance coupons under the F NM A agreement: 6. · 5% Update frequency: monthly Source: Brumberg Announcement Date: 8/1/99 Last Announcement Date: 7/1/99 Expiry Date: Announcement Date, 8/1/99 Current Trading Period Start Date: 7/1/99 Current Trading Period Ends Issue: 7/9/99 Previous: 3 0 3 Public Securities Association Prepayment Speed ("PSA")

Census estimate · 3 1 0 PSA The paper size is applicable to the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -116- -------- I ---- installation ----- Order the illllli line (please read the precautions on the back before filling this page) 4736 印 Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7 V. Description of the invention (114) In order to shorten the space, the total investment in various states in this example The limit status of the amount and the open index or stated profit result are not listed 'but can be calculated or calculated by the method of Example 3 · 1 · 1-3 .f .9 according to the present invention from the actual trader's The investment is showing. Example 3. 1. 13: Insurance loss policy D B A R or the right group can use the method and system composition of the present invention to provide insurance and reinsurance capabilities for property and disaster, life, health and other traditional insurance online. The following information provides DBAR contingent information that constitutes one of the huge property damage caused by the voice hurricane: Incident: More than 5 billion documents indexed to the east of PCS Source: Property Complaint Service (PCS) Frequency: Monthly announcement date: 1 0/1/9 9 Last index 値: No census estimate for this event: $ 100 billion (greater than 5 billion complaints) Expiry date: Announcement date, 10/1/99 Start date of trading period: 7/1/99 Trading period deadline: 9/3 0/9 9 In order to shorten the space, the limited status of the total investment amount and the open index or stated profit result in various states in this example are not listed ', but can be calculated or The method according to Example 3.1-3 • 1 · 9 according to the present invention appears from the investment of actual traders. This paper size applies to China National Standard (CNS) A4 specification (210 x 297 mm) -117 · ------- I ------------- Order ------ --1 (Please read the notes on the back before writing this page) 473680 Printed by A7 B7, Consumer Cooperatives, Intellectual Property Bureau, Ministry of Economic Affairs V. Invention Description (115) In the DBAR related to the property-accidental disaster, there may be In the more complex embodiment of the rights group, the frequency of appeals and the distribution of serious losses are assumed and the manoeuvre is completed in order to register the index profit under a limited state distribution. This can be done using a composite frequency-severe model, such as the Poisson-Pareto model, which predicts that the loss will be very large with a greater probability than the normal distribution. As mentioned earlier, in the preferred embodiment, market activity is expected to change the registered indicative profit, which acts as a level of information at the beginning of the transaction. Example 3. 1. 14: Conditional events As discussed above, the advantages of the system and method of the present invention are the ability to construct DBARs or rights related to economically significant events, and to have insurance and hedge investments There is a lot of interest, which is not easy to do in the traditional capital market and insurance market. Another 'suitable event' example occurs only when some related events have already occurred. For the sake of illustration, A and B represent two events. 々 • Double where Q represents the probability of a state, Q <A | B> represents the conditional probability of state A given a previously occurring state B, and q (Α Π B) represents the simultaneous occurrence of state A and state B Chance. For example, a set of DBARs may have the right to be constructed to combine elements of "key person" insurance with the stock price of the company managed by the key person. 118----------------------- ^ ----- IIII (Please read the notes on the back before filling out this page) Employees of the Intellectual Property Bureau of the Ministry of Economic Affairs Printed by the Consumer Cooperative 473630 A7-B7 V. The invention description (116) was completed. Many companies are managed by capital markets as indispensable or particularly important people, such as Warren Buffett of Berkshire, Berkshire Hathaway. The owners of Berkshire and Black Amnesty stocks do not have any insurance method for instant changes in Berkshire management, and they are also used for company actions such as receiving Berkshire, Black Amnesty or the death of Warren Buffet Or disability. A group of D B A R may have the right to be constructed according to the present invention, in which the limited status is the price of Berkshire and Black Amnesty under the condition that Warren Barfe leaves the management of the company. DBAR with other conditions may have the right to attract more investment, and can be constructed using the system and method of the present invention, as shown in the technique of this example. Example 3 · 1 · 1 5: Use of DBAR or the right of opportunity The system and method of guaranteeing the present invention can also be adopted by a financial intermediary or an issuer of securities such as public debt, common stock and preferred stocks, or issuers of other types of financial instruments. The process of creating new opportunities for hedging potential events through the establishment of new securities is considered to be a so-called “guarantee”. Examples of well-known guarantees include collateral and asset-backed guarantee markets, in which financial risk portfolios are progressive and then recombined to new sources of financial risk. The system and method of the present invention can be used in the process of guarantees by creating bonds and bond investment portfolios, whose individual or overall risks are combined with an associated or impressive DBA or rights group. In a preferred embodiment, a set of this paper size is applicable to the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -119- Packing ------- Order ------- (Please read the notes on the back before filling out this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 ________ B7 V. Description of the invention (117) DBAR may be associated with a bond, much like an option It is currently associated with public debt in order to create summonable and saleable public debt in traditional markets. This example illustrates how a set of DBA R contingent rights in accordance with the present invention can be combined with the issuance of a bond to share the risks associated with a future event identified to all bond owners. In this example, a bond is a public debt with an impressive D B A R or contingent fixed income that relies on the value of the hurricane's losses at some geographical location for some time. Issuer: Tokyo Fire and Maritime Underwriters: Goldman Sachs DBAR Incident: Total Loss of Level 4 Hurricane in Saffir-Simpson Location: Property Claims Service Northeast America Date : 7/1/99-1 1/1/99 Issue size: 500 million USD Issue date: 6/1/99 DBAR transaction period: 6/1 / 99—7 / 1/99 In this example, the insurer King James Sachs issued this bond, and the owner of the bond placed the principal of the bond over the entire risk of a distribution of the amount of losses caused by a Category 4 hurricane. The range of possible losses constitutes a limited state for D B A R or a group of rights. In a preferred embodiment, the insurer is responsible for providing the latest profit to the investment in various states. The paper size of the supervision letter applies to the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -120- — — — — — — — — — — — — — — — — — — II 11111111 (Please read the notes on the back before writing this page) Printed by the Consumers ’Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 B7 V. Description of the invention (118) Use risk to calculate and settle, and confirm the total amount of losses. When the event is decided and after the uncertainty is lifted, Goldman Sachs “drops” or collects the principal of the bond at risk from those unsuccessful investments and allocates this money to successful investments. The functions in this description include: (1) an insurance policy or agent that performs this function; and (2) — the group may have direct rights to bonds or issued DBARs (such as the above-mentioned catastrophe bonds). In order to reduce the length, In this example, the limited status of the total investment amount and the open index or the stated profit result in various states are not listed, but they can be calculated or calculated according to Example 3.1 of the present invention. 3.1-3.1. The 9 method appears from the investment of actual traders. Example 3 · 1 · 1 6: Foreign Derivatives Bonds and derivatives groups often use the term "foreign derivatives" to talk about prices that are related to derivatives from bonds, assets, financial products or sources of financial risk. More complex methods than traditional derivatives, such as futures, purchase options, and redeemable bonds. Examples of alien derivatives include the American trading option, the Asian trading option, the barrier trading option, the Bermuda trading option, the selector and composite trading option, the binary or digital trading option, the retrospective trading option , High and low automation and flexibility, and shouting buying and selling options. Many foreign derivatives are currently being traded. For example, the barrier to purchase option is the right to purchase a basic financial product, such as applying the Chinese National Standard (CNS) A4 specification (210x297 mm) to a paper size -121---- — — — — — — I I-- · 1111111 ^ · 1111111 · (Please read the notes on the back before filling out this page) 4736 Printed by the Consumer Cooperative of the Intellectual Property Bureau of Sichuan Economic Ministry A7 B7 V. Description of the invention (119) Foreign currency with specific exchange rate or price 'Quantity' but only if 'for example' the base exchange rate exceeds or does not exceed one or more defined exchange rates or "barriers". For example, a one-dollar purchase of Japanese yen staged a U.S. dollar / yen exchange rate, which has a knock-down price of 110 for three obstacles and a price that expires at three times, making the holder buy at one hundred and ten yen. It's only when the exchange rate is not lower than 105 at any point in the three months of the option. Another example of a more commonly traded foreign derivative is the Asian trading option, which relies on the average plutonium of the underlying bond over a period of time. So 'a level of foreign derivatives are usually extended as' path-dependent' derivatives, such as obstacles and Asian trading options' because their contingency depends not only on the price of the underlying financial product at a given date 'but also Reliance on the past price or state of the underlying financial product. The characteristics and characteristics of foreign derivatives are generally very complex in order to come up with a "model · significant source of risk, or based on these assumptions' or risk of causing significant errors in prices and hedge investments. Therefore, derivative transactions Investors and risk managers often use sophisticated analytical tools to trade, hedge investments, and manage the risks of foreign derivatives.

One of the advantages of the system and method of the present invention is the ability to establish D B AR or rights groups with the characteristics of alien derivatives. These foreign derivatives are more manageable and easier to understand than traditional foreign derivatives. For example, a trader can be interested in the yen / dollar exchange rate just over 9 5 in the next three months. A traditional barrier to buying and selling option, or an investment portfolio like this foreign buying and selling option, may be sufficient to estimate the source of this trader's interest rate risk. In contrast, a set of DBAR paper sizes are applicable to the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -122- ---- I --- I!-Packed ------- order- ------ line (Please read the notes on the back before filling this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 _-___ B7 V. Description of the invention (12) Contingent rights can be constructed Isolate this risk and provide relevant transparent opportunities for hedge investments. For barrier derivatives traders who call "virgin", or in this example, the first time the yen / dollar exchange rate is higher than 95 in the next three months, a risk of segregation is possible. The following description indicates how a set of DBARs might be structured to account for this risk. In this example, it is assumed that all traders in the contingent group agree that the underlying exchange rate is log-normally distributed. This contingent group explains how traders can invest in the state and expresses whether and when the future yen / dollar exchange rate will be higher than the barrier to buying and selling options in the next three months: Potential risks: yen / USD exchange rate today date: 9/15/99 expiry date: previous interest rate, as defined, between 9/1 6/99 to 12/16/99 trading period start date: 9/1 5/9 9 trading Period deadline: 9/1 6/9 9 Barriers: 9 5 Cash yen / USD exchange rate: 104 · 68 Prior yen / USD exchange rate: 103 · 268 Hypothetical (illustrated) market variability : 20 ° / 〇 accumulated transaction amount per year: 10 million US dollars This paper size applies Chinese National Standard (CNS) A4 specification (210 X 297 mm) -123------------- -Install -------- order --------- line (please read the precautions on the back before filling this page) 4736〇ϋ Α7 Β7, invention description (121) Intellectual Property Bureau of the Ministry of Economic Affairs Investment in employee consumption cooperatives printed on the state of the time within the year (thousands) If the state occurs profit per unit --- __—-— (0, .0051 229.7379 42.52786 J ---------- (· 〇〇5, · 〇ιι 848.9024 10.77992 -------------- &quot; (· 〇1, .0151 813.8007 11.28802 (.015, .021 663.2165 14.07803 ----—; ~ tA ___— ^ (.02, .0251 536.3282 17.6453 (• 025, ..031 440.5172 21.70059 (.03, .0351 ^- -------------------- (-035, .04) (-04, .045) 368.4647 26.13964 313.3813 30.91 270.4207 35.97942 (.045, .051 236.2651 41.32534- J _________ (.05, .0751 850.2595 10.76112 (.075, .1 1 540.0654 17.51627 (.1, .1251 381.3604 25.22191 (.125, .151 287.6032 33.77013 (.15, .175) 226.8385 43.08423 (.175, .2 ] 184.8238 53.10558 (.2, .225) 154.3511 63.78734 (.225, .25] 131.4217 75.09094 Did Not Hit Barriers 2522.242 2.964727 ------------- install -----: --- —Order · -------- Line (Please read the notes on the back before copying this page) This paper size is applicable to China National Standard (CNS) A4 (210 X 297 mm) -124- 473680 A7 B7 V. Description of Invention (122) (Please read the notes on the back before filling out this page) • Like other examples, and In preferred embodiments, the actual transaction amount of the transaction may be generated and the different margins for each state and calculated assuming described profits. Example 3 · 1 · 1 7: The market economy of the Ministry of Intellectual Property Bureau of the Ministry of Intellectual Property Bureau of the Ministry of Intellectual Property Bureau of the Ministry of Market Economy, the investment and capital budget choices faced by economic companies (such as , Future demand for semiconductors), large capital investments (for example, semiconductor manufacturing capacity) and timeliness (for example, a decision to invest immediately in a factory, or a delay in making a decision). Many economists who have studied making decisions under such uncertainty have learned that this choice involves what they call a "real option." This characteristic states that, for example, in the face of uncertainty and changes in information, the choice to invest in goods or services or factories now, or to make a decision after a certain period of time, usually assumes something similar to investing in options Traders on the stock market generally face the risk of buying and selling basic assets in the capital market. Many economists and investors understand the importance of making capital budget decisions and setting markets to better manage uncertainty and price. Natural resources and extractive industries, such as the extraction and production of oil, and industries that require a large amount of capital investment, such as technology manufacturing, are all important industrial examples. The analysis of the true right of choice is to be used and done. Assessed. The D B AR or contingent group according to the present invention can be used by a company or a company in a given industry to make better analysis of capital budget decisions, including involving real options. For example, a group of DBARs may have Chinese paper standard (CNS) A4 specifications (21〇χ 297 mm) —125-Printed by the Intellectual Property Bureau Employee Consumer Cooperative of the Ministry of Economic Affairs 473680 A7 B7 V. Invention Description (123) Rights can be established to provide safe-haven investments in future semiconductor price distributions. Such a group may have the right to allow semiconductor manufacturers to 'make better hedge investments in capital budget decisions and provide results at possible prices The entire distribution of future prices' information about the market's expected future prices. This kind of information about the market's expected future price can also be used at the same time on the topic of real election, so that the decision of the capital budget can be better evaluated. Similarly, computer manufacturers can use such a set of D B A R or have the right to hedge against adverse semiconductor price fluctuations. The information that provides a description of the DBAR that may be entitled to the semiconductor comparison is as follows: Potential Event: Monthly Semiconductor Sales Volume Index: Semiconductor Industry Association Monthly Global Sales Announcement Date: 9/15/99 Last Publication Date: 9/2/99 Last post month: 7/9 9 Last post number: 115 $ 500 million Next post date: about 1 0/1/9 9 Next post month: 8/99 Transaction Start date: 9/2/99 Transaction deadline date: 9/30/99 In order to shorten the space, the limited status of the total investment amount and the open index or stated profit result in the various states in this example are not listed, but Can be calculated or according to the method described in Example 3 of the present invention. The paper size is applicable to China National Standard (CNS) A4 (210 X 297 mm) 126-------------- ----— — II — — — — — — — (Please read the notes on the back before filling out this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 B7 V. Description of the invention (124) From the actual transaction The investor's investment shows up. The D B A R contingent group according to the invention can be used to make hedge investments in any source of risk due to the price discovery process. For example, companies involved in the competitive bidding of goods and services, whether sealed bidding or open bidding, can hedge their investments and have the right to invest in DBARs that include mutually exclusive and jointly exhausted auctions. Group other capital consumption to make hedge investments. In this way, DBA R may have the right to act as a kind of “hyper-auction” and allow those who will participate in the auction to invest in the distribution of the results of possible auctions, rather than just waiting for a single result. Auction participants can thus enable themselves to hedge against adverse auction developments and results, and more importantly, they can approach the distribution of the entire probability of bidding (at least in time a little). Therefore, a group of D B A R may have the right to be used to provide market information across the entire distribution of possible bids. The preferred embodiment of the present invention can thus help avoid the so-called curse of winners, which is well known to economists, i.e. auction participants cannot reasonably interpret similar bidding information from other competitors. Example 3 · 1 · 1 8 ·· D B A R's safe-haven investment Another feature of the system and method of the present invention is that it is easier for traders to avoid exposure to risk. In the following example, it is assumed that a group of D B A R has the right to have two states of state 1 or state 2, or si, s 2, and the amounts T i, T 2 invested in state 1 or state 2. The unit expenditure of state 1 is therefore T 2 / T i, and the unit expenditure of state 1 is therefore ------------- ^ -------- ^ --- I --- -^ (Please read the notes on the back before transcribing this page) This paper size applies to China National Standard (CNS) A4 (210 X 297 mm) -127-4736〇 A7 ____ B7 Intellectual Property Bureau, Ministry of Economic Affairs Printed by Employee Consumer Cooperative

V. Description of the invention (125) T i / T 2. After that, if a trader invests in a α i in state 1, and then state 1 occurs, then the trader may receive the following expenditures P in this example. If state 2 occurs, the trader may receive p2 = o. At some point during the period, if the trader wants to hedge against exposure, for this purpose, the amount invested in state 2 should be calculated as follows: This equation is spent by the state of the transaction with the proposed hedge, as follows The result obtained is: = P2 = a2 ^ κΤλ Λ-aλ j compared with the calculation of traditional derivative hedging. These formulas point out that in the modest DBAR or right group of the present invention, hedging investments The calculation and execution can be relatively straightforward. This paper size applies to China National Standard (CNS) A4 specification (210 X 297 mm) -128- (Please read the precautions on the back before filling this page) -1 ---- I --- Order ---- --II · Line 473680 A7 ___ B7 V. Description of the invention (126) (Please read the precautions on the back before writing this page) The ratio of hedging, α 2, just calculate a simple two-state example , It can be adopted by DBAR or right group defined in more than two states. In a preferred embodiment of a group of D B AR or contingent rights, an investment that already exists in a state that will be hedged can be distinguished from a state that will be hedged in the future. The latter can be called “complementary” states because they constitute all states that can occur, rather than the investments that those investors have already made, that is, they are complementary to the state of the investment. In a preferred embodiment, a multi-state hedging comprises two steps: (1) in a complementary state, determining the amount of the hedging investment; and (2) given this already determined amount, allocating to On each complementary state. The amount of the risk-averse investment pursued in the first step in the complementary state is calculated as follows: printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economics where a C is the amount of hedging in the complementary state and α Η is already in the state The amount to be hedged, T. After deducting α η, it is the amount of investment that will be hedged. The second step involves allocating hedge investments in complementary states, which can be proportional to α in the complementary states. To the amount that has been invested in each state to complete. An example of D B A R or a right group with four states is used to illustrate the two-step hedging investment process according to the method of the present invention. The following assumptions are made in this example: (i) there are four states, state 1 to state 4; (ii) each state has an investment of $ 50, $ 80, and the paper size applies the Chinese National Standard (CNS) A4 specifications (210 X 297 mm) -129- 473680 Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7 V. Description of the invention (127) $ 70 and $ 40; (1 1 i) — a trader has previously invested in the state 1 and 2 — a multi-state investment of $ 1 0 (such as α η); (i ν) The distribution of this multi-state investment in states 1 and 2 is $ 3 · 8462 and $ 6 · 15385 respectively. Excluding the amount invested by the trader, the amount invested in each of the states 1 to 4 is therefore $ 46.1 538, $ 73.84615, $ 70, and $ 40. Note that the amount of investment that will be hedged in the state, such as ‘states 1 and 2’, in addition to the multi-state investment of $ 1 0, is actually the above-mentioned TΗ. In a preferred embodiment, the first step of the two-step hedge investment process is to calculate the amount of hedge investment that should be invested in the complementary state. As derived above, the amount of the new hedged investment is equal to the amount already invested, multiplied by the ratio of the amount of the investment in the complementary state to the amount of the investment to be hedged in the state, minus the transaction that the trader has, that is, , $ 1 0 * ($ 7 0 + $ 40) / ($ 46. 1538 + S73. 84615) = $ 9. 1 6 6 6 7. The second step is to allocate this amount between two complementary states, states 3 and 4. According to the above-mentioned steps for allocating multiple state investments, the allocation of complementary states is to allocate the amount of safe-haven investment by proportioning to the amount of the previous investment in the complementary state. This example is titled $ 9 · 1 6 6 6 7 — 1 To complete, that is, $ 9 · 1 6 6 6 7 * $ 7 0 / $ 1 1 0 two $ 5 · 8 3 3 3 3 for state 3, $ 9 · 16667 状态 $ 40 / $ 110 for state 4 = $ 3 · 3333. Therefore, in this example, the trader currently has the following amount of investment to apply the Chinese National Standard (CNS) A4 specification (210 X 297 mm) to each paper size -130- --------- I- ---------- Order --------- (Please read the notes on the back before filling out this page) 473680 Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7 V. Invention Description (128) In the state: ($ 3.8462, $ 6.15385, $ 5 · 8 3 3 3, $ 3 · 3 3 3 3); in the four states, the total amount of each * state investment is $ 5 0, $ 80, $ 75 · 83333 and $ 43 · 3333; and the profit of each state is based on the total amount of investment in each state is $ 3.98333, $ 2.1146, $ 2.2857, and $ 4 · 7 5. In this example, if state 1 occurs, the trader will receive a sum of $ 3 · 9 8 3 3 3 * $ 3 · 8462 + $ 3 · 8462 = $ 19 · 1667, which is equal to the total investment, Therefore, the trader is completely hedged against the occurrence of state 1. Other states will produce the same result, so in this example, the trader is completely hedged against any state. When the profit is expected to change throughout the trading period, the trader may need to rebalance the amount of investment in the complementary state and the distribution of multiple states in the complementary state. In a preferred embodiment, for example, a D B A R contingent exchange can be responsible for reallocating multiple investments via a suspended account, so that the trader can assign responsibility for reallocating multiple investments to the exchange. Similarly, a trader can also designate an exchange that determines the investment's liability for complementary amounts, especially when the change in profit is a consequence of the transaction. The calculation and distribution of this amount can be accomplished by exchanging in the same way, when the investment amount is changed, by redistributing multiple transactions in exchange to form a state. Example 3. 1. 19: quasi-continuous transactions This paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -131-I ------ II--II · 1111111 ^ · 111111! 1 (Please read the notes on the back before copying this page) 473630 Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7 V. Description of the invention (129) A preferred embodiment of the system and method of the present invention, This includes contingent rights to a DBAR, in a limited state, the period of the transaction when profit adjustments are made, and a subsequent observation period after the outcome of an event based on the contingent rights group is determined. In the preferred embodiment, profits are allocated to the occurrence of a state based on the final distribution of the total investment at the end of the trading period for all states. Therefore, in each embodiment, a trader will wait until the end of the transaction for a deterministic state before knowing its profit. Earlier than “locking in” the last profit, changes in profits that occurred during the trading period or “price exploration” may provide traders with useful information about an expectation of the final result, even if they are only about the final profit An indication of what the result is. Therefore, in some preferred embodiments, a trader may not be able to know whether there will be profit or loss during the trading period. For example, the description of the example hedging question 3.1.1.18 provides a risk reduction but cannot lock in gains or losses. In other preferred embodiments, contingent rights to transactions in a group of D B A R can create a quasi-continuous market. In a preferred embodiment, several rounds of trading periods may provide traders with a near-continuous opportunity to learn about a profit or loss. In one such preferred embodiment, the end of one transaction period immediately follows the start of another transaction period, and the final amount of the transaction, ie the state profit of the previous transaction period, will be "locked" at the end of the transaction, and The results of related events will be distributed when known later. When a new transaction period occurs in a DBAR contingent group related to the same potential event, a paper size standard for state investment applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -132- I — I I ---— II--I ----- lilt · — — — — — I — (Please read the notes on the back before filling out this page) 473630 Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs System A7 _____B7 _______ V. Description of the Invention (13) The new distribution of the amount will appear in a new distribution of relative state profits. In such a preferred embodiment, when continuous transactions are started and ended so frequently, a quasi-continuous market can be obtained, enabling traders to hedge and understand profit or loss as if they were currently So often in traditional markets. An example illustrates how the features of the invention can be implemented. This example illustrates a two-day safe-haven investment for a European digital purchase option at the yen / dollar exchange rate when the underlying exchange rate is changing at one day per dollar. In this example, 'assuming a DBAR or rights group has two traditional options during the transaction period: European digital option options are expended: if the S-rate expires equal to or exceeds the contract price, $ 1 billion will be paid. Basic index: JPY / USD exchange rate Options start: 8/1 2/9 9 Options end: 8/15 / 〇〇 Assumptions of change: 20% per year Price on contract: 1 2 0 Nominal : $ 1 billion In this example, two dates, 8/12/99 and 8/13/99, are analyzed: -------- — — — — II. I — — — — — I ^ &gt; 1111111- ^^ '&lt; (Please read the notes on the back before filling this page)

473630 A7 B7 Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 5. Description of the invention (131) Table 3.1.19-1: Two days &gt; Buying options with exclusive digital 7 7 _ Price change observation period 8/12 / 99 8/13/99 Settlement date of cash transaction 8/16/99 8/17/99 Settlement date spot price 115.55 116.55 Scheduled settlement 8/15/00 8/15/00 Scheduled price 109.217107 110.1779 Option margin nominally 28.3 3 3% Nominal 29.8 1 37% Table 3.1.1.19-1 shows how a digital purchase option can change its price when the base of a yen / dollar exchange rate changes when it reaches 120. The second column shows that at 8/1 2/9 9 when the potential exchange rate is 1 1 5 · 5 5, the nominal price of a 10 billion yuan purchase option is 28.333% or $ 283.3 billion. yuan. The third column states that if RMB 1 billion is paid, when the yuan / yen is equal to or more than RMB 120, the price of the RMB 1 billion option will increase by 2 9 · 8 1 37% or $ 2. 9 8 1 3 70 million when the potential exchange rate increases to 1: 1 1 6. 55. As a result, the purchase option for the panic figure yields a profit of $ 29 · 81377- $ 28 · 333 = $ 1.48 0 7 million. This example shows that it is possible to obtain a set of D B A R contingent profits for a transaction with two trading periods. This example also assumes that there is sufficient amount of investment or circulation in these two states' so that the investment of a particular trader will not have any material impact on the profit of each state. This is a convenience but not a necessary assumption. 'It allows traders to apply Chinese National Standard (CNS) A4 specifications (210 X 297 mm) to each paper size. -134- -------- ------------- t --------- ^ (Please read the notes on the back before filling out this page) 473680 A7 _ B7 V. Description of the invention (132) One status 'S profit is deemed "given" without having to care how his investment will affect the profit at the end of a given trading period. Using the information in Table 3 · 丄 · 丨 9-1, the profit at the end of each of the following states can be obtained as follows: Transaction period 1: The closing date of this transaction period: 8/1 2/9 9 Potential event: pair 8 / 1 5/0 〇 East coast settlement at 4:00 pm The final standard 8/16/99 settlement spot price: 115 · 55 Status at 8/15/00 yen / At 8/15/00 yen / USD &lt; 1 20____ USD 2 120 Final profit 0.39533 2.5295 For the sake of this example, suppose a trader has invested $ 2 · 8 3 3 30 million in yen / USD exchange rate at 8 // 1 0 0 equals or exceeds 1 2 0 status. Trading period 2:. Deadline of this trading period: 8/1 3/9 9 Potential event: 8/15/0 0 4:00 pm on the east coast settlement yen / USD exchange rate final standard 8/1 6/9 9 Settlement spot price: 1 1 5 · 5 5 This paper size applies to China National Standard (CNS) A4 (210 X 297 mm) • ------------ if please read the note on the back first Please fill in this page again for matters} — Order --------- Line-Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs -135- Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs 133) Status at 8/15/00 yen / USD &lt; 120 Profit ending at 8/15/00 yen / USD 2 120 0.424773 2.3542 For the sake of this example, suppose a trader has invested $ 7 · 0 1 8 7 The exchange rate of 55 million yen at the yen / US dollar exchange rate at 8/15/0 0 is equal to or exceeds 1 2 0. Note that at the time of the trading period 2, the profit at the end of the exchange rate equal to or exceeding 1 2 0 is relatively low. This is because in Table 3.1 · 19-1, it reflects a change in a hypothetical change in the underlying market, which makes the state behave as such. Now the trader has an investment during each trading period and locks in a profit of $ 1 · 4 8 0 7 million as follows: __ status at 8/15/00 yen / at 8/15/00 yen / USD &lt; 120 USD g 120 Profit and Loss $ 70.18755 * 0.424773- $ -70.18755 + 28.333 * (million) $ 28.333 = $ !. 48077 $ 2.5295 = $ 1.48077 The trader illustrated in this example is therefore no matter which of the last poses occurs, it has already Able to lock in or get profit. This profit is the same as the profit of the option purchased in traditional digital, indicating that the system and method of the present invention can provide at least daily or if the number of profits and losses occurs less frequently, the risk can be hedged at every time . The size of this paper applies the Chinese National Standard (CNS) A4 specification (210 &gt; &lt; 297 mm) -136 · I — — — — —------------ I! I order · 11111! * ^ (Please read the notes on the back before filling out this page) 473680 A7 B7 V. Description of the invention (134) In the preferred embodiment, generally a quasi-time continuous hedge investment can be made through the following hedge investments Completed, assuming the effect of the size of the safe-haven transaction will not affect the profit: where rt: = profit at the state t ended at the time t investment at: two the amount invested in the state at time t r / t + i: = Profit at the time t + 1 to the end of the state or other states at the beginning of the investment (ie, complementary states, that is, other non-hedging states) H: If the amount of the hedged investment is invested to more than One state, then the distribution of multiple states in the constituent states can be accomplished using the above-mentioned systems and methods. This Η expression allows investors to calculate the total investment in hedging transactions in the D B A R contingent group. In traditional markets, this calculation is often complex and difficult. Example 3 · 1 · 2 0: Units of investment and expenditure prices As discussed earlier in this description, the units of investment and expenditure prices used in the embodiments of the present invention can be any unit familiar to investors, for example, currency , Commodity, stock number, index index, exchange transaction volume, or several paper sizes are applicable to China National Standard (CNS) A4 (210 X 297 mm) -137-(Please read the precautions on the back before filling this page) i 111111 Order 11! 11--. ί Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7

5. Description of the invention (135) Total sum of real estate. The investment amount and expenditure do not have to be the same unit, and can be formed by a combination of units, for example, 25% gold, 25% oil, and 50% yen. The previous example in this note uses the US dollar as a unit of investment and expenditure prices.

This example 3 · 1 · 2 0 shows that a group of common shares d B A R may have rights, where investment and expenditure are based on the number of shares. In this example, the terms and conditions of Example 3 · 1 · 1 are used in DB AR or the right group MS FT common stock. For the purpose of brevity, the following three states are suspended in this example 3 · 1 · 2 0: (〇, 83], (83, 88], and (88, °°). At the same time, in this example 3 · 1 · 20, the total amount of investment is the number of shares for each state, and the exchange makes the trader in the market The conversion of prices has been common at the beginning of the investment. In this example, the expenditure is done according to the standard DRF, in which the trader obtains a stock with the same number of shares as the investment has not occurred in the state, and its proportion is The ratio of the number of shares that an investor has invested in a state divided by the total number of shares invested in this state. The indicative distribution of a trader's demand in units of shares is shown in the following table, assuming that the total transaction is 1 〇 0, 0 0 0 shares: _ -------- II --------- Order ·! -Line ~ (Please read the notes on the back before filling this page) Total number of shares in status transaction Profit per unit of shares (profit / share) if status occurs (0,83] 17,803 4.61 7 (83,88) 72,725 0.37504 (88,00) 9,472 9.5574 Printed by the Consumers' Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs This paper applies the Chinese National Standard (CNS) A4 (210 X 297 mm) -138- 473630 Ministry of Economic Affairs Printed by A7 _B7____ of the Intellectual Property Bureau's Consumer Cooperative Fifth, the invention description (136) For example, if the MSFT expires with 9 1 closing, the third state in the example occurs, and a previously invested 10 share A trader will likely receive a stock with a payout of 10 * 9 · 5574 + 10 2 105 · 574, which contains the trader's original investment. The trader who previously invested in the other two states' dRF in this example standard It is possible to lose all of their stocks in the application. An important characteristic of investing in units of price rather than currency is that the size of the observations may be important, as is the case with the results based on this. For example, if the investment in this example is in yuan, a trader who theoretically invests a dollar in (88, ⑺) will no longer observe The closing price of MSF T at the time of closing is 8.9 or 5 0 0. However, if the unit of the price is the number of shares of the stock, the size of the final result will have an effect, because the expenditure received by the trader will be in shares. The number may be converted into a higher-appearing price of $ 91 per share. For example, for a payment of 10.5.574 shares, the price of these stocks is 値 at the emerging price For 105.574 氺 $ 91 = $ 9, 607.2 3. If the result is $ 1 2 5, the stock price is 105.574 * $ 125 = $ 13,196.75. A group of D B A R using goods as a unit has contingent rights, and therefore has a D B A R that compares a state to a fixed expenditure or has the additional characteristics of a right group, regardless of the size of the result in the state. These characteristics can effectively prove that when constructing a D B A R or a rights group, it can easily provide a profile similar to the risks and profits provided by traditional markets. For example, the size of this paper applies to China National Standard (CNS) A4 (210 X 297 mm) -139-(Please read the precautions on the back before filling this page)

-丨 Install -------- Order nn I nn ·, II 473680 A7 B7 V. Description of Invention 〇37) (Please read the notes on the back before filling this page) The DBAR described in the example may have the right, It may be of particular interest to those who trade in traditional derivatives such as "digital options for assets or nothing" and "super-stock options". Printed by the Consumers' Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs, Example 3 · 1 · 2 1: A response to an arbitrary expenditure distribution. In a preferred embodiment, one advantage of the system and method of the present invention is that a group of DBAR or With the right, a trader can generate a distribution of arbitrary expenditures under a distribution that spans a defined state. This ability to generate an arbitrary distribution of expenditures may be very important to traders, because they may want to respond to expenditures that are commonly sought or entitled in traditional markets, such as those corresponding to long trading stocks, short positions Of public debt 'short position status in foreign exchange transactions, long position price options, etc. In addition, the preferred embodiment of the present invention can make it very difficult and expensive to generate a response to the distribution of expenditures in a traditional market, such as a response to a market price when it reaches a certain price that is lower than the market price. Sell, dominates "stopped" long trades. Such stop-loss orders are well known to be very difficult to execute in traditional markets, and traders generally do not guarantee that this execution will occur at a previously defined price. As described above, in a preferred embodiment, the generation and response of an arbitrary expenditure distribution to a group of D B AR or distribution of rights across a limited state may be achieved through multiple state investments. In such an embodiment, the 'Trader can specify an expected payout for each state or states under a given state distribution'. These expenditures form a distribution of expected expenditures across the D B AR or contingent group status distribution. In the preferred paper size, the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -140-473680 is printed in the embodiment of the Intellectual Property Bureau Employee Consumer Cooperatives of the Ministry of Economic Affairs A7 B7 V. Invention Description (138) Given a distribution of existing investments across the state, the distribution of expected expenditures may be stored by exchange, or it may be calculated (1) the total amount of investment required to obtain the expected distribution of expenditures; (2) investment institutions The states to which it should be assigned; and (3) how much each state should invest to obtain the distribution of expected expenditures. In the preferred embodiment, the multi-state investment invests in a suspended account that is more maintained by the clearing house, and when the amount of investment distributed across the state changes, it redistributes the investment into the state. In the preferred embodiment described above, a final distribution is completed at the end of the transaction when the profit ends. The discussion of this multi-state investment description has covered many examples, in which it is assumed that a trader wants to get the same payout regardless of which of the many states of the multi-state investment occurs. To obtain this result, in the preferred embodiment, the amount invested by a trader in multiple states can be allocated to the constituent states in proportion to the amount invested in each state. In a preferred embodiment, these investments are used throughout the trading period to reallocate when the relevant ratio of the investment to each constituent state changes. In other preferred embodiments, a trader can make a multi-state investment, where the multi-state distribution is not intended to generate the same expenditure regardless of which of the constituent states occurs. However, in this preferred embodiment, a multi-state investment may be used to generate an expenditure distribution that spans a state distribution that matches other traders' expected expenditure distributions. Therefore, the system and method in the present invention do not need to be proportional to the investment status of the investment in multiple states, and the investment amount of the investment in multiple states. The symbols derived in the previous description are used to describe a preferred embodiment. The paper size applies the Chinese National Standard (CNS) A4 specification (210x297 mm). 141-II — — — — — — — — — I * · IIIIIII — — — — — — — I- (Please read the notes on the back before filling out this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 ------- B7 V. Method of Invention (139) , One of the DBARs may have the right to arbitrarily distribute the response 'can be obtained according to the present invention. The following additional symbol is also used: A!, * Represents the i-th row of matrix A, which contains the amount of probe funds for each state of trader i for DBAR or n states. For example, invest the distribution of the amount of money in all states to obtain the expected expenditure across the state distribution. For example, it can be calculated using the computer code listed in Table 1 (or the same function as this technology), or if a trader's multiple investments and If the total investment invested in the DBAR or the right group is very small, the following estimates can be used:. Where the superscript -1 in the matrix Π represents the inverse of the matrix. Therefore, in these embodiments, the amount of investment required to generate an arbitrary distribution of expenditures can be approximated by multiplying (a) the diagonal matrix of each state unit expenditure on a diagonal matrix. Countdown (where the unit dollar expenditure is determined from the amount invested at any time during the transaction); and (b) a vector containing the expected expenditure of the trader. The above equation indicates that the amount of investment required to generate a distribution of expected expenditures is a distribution of expected expenditures (pi, *) and other investment amounts that are distributed across states (it is used to form a matrix π, which is contained in The diagonal is a function of each unit's expenditure, which is zero on the off-diagonal). Therefore, in the preferred embodiment, the distribution of the amount of investment in each state will change. If the size of the original paper applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -142----- ------ install ------- order --------- line (please read the precautions on the back before filling this page) Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs 4736 ㈧ A7 B7 V. Explanation of the Invention (140) When the expenditure in the period (140) changes or other investment amounts across the state distribution change. When other investment amounts in various states can be expected to change during the course of the transaction, as mentioned earlier, in the preferred embodiment a suspended account is used to redistribute the investment amount, A i, * To respond to these changes. In the preferred embodiment, at the end of the transaction period, a final allocation is made by distributing the other investment amounts across states. This final allocation can usually be done using the technique of iterating the second solution of the code built into the computer listed in Table 1.

Example 3 · 1 · 2 1 illustrates a method from Example 3 · 1 · 1 using events, termination criteria, limited status, transaction period, and other relevant information to generate an arbitrary distribution of expenditures, assuming the expected multi-state investment and The total amount of investment is small by comparison. In the example 3 · 1 · 1 above, the illustrated investment representing the cross-state distribution represents the possible closing price of MSFTT stock on the expiration date 8/1 9/9 9. In this example, the distribution of investments on the day before the expiration date of 8/1 8/9 9 is listed and the price of M S F T on this day is given as 8 5. For the sake of this example question 3 · 1 · 21, suppose a trader wants, according to a method of the present invention, the response of a grandma may range from owning a share (ie, a relatively small amount) between the price of 8 0 And 90 MSF T shares of profits and age loss, may invest in a group of DBAR. In other words, suppose a trader wants to respond to a traditional long trade on MSFT with a request to execute a sell when MS FT reaches a price between 80 and 90. Therefore, for example, if the MSFT closes at 8 1/1 9/9 9 to 8 7, traders will expect that this DBAR standard applies the Chinese National Standard (CNS) A4 specification (210 X 297 public meals) (Please read first Note on the back then fill out this page again) Packing -------- Order --------- Line 473680 A7 _ B7 _ V. Description of the Invention (141) Or a right group has about $ 2 Profit. Using the state defined in Example 3.1.1, this profit is approximate because the state is limited to a region that includes an intermittent possible closing price. In the preferred embodiment, investments in one state will receive the same profit regardless of the results that actually occur in the state. Therefore, in this example 3 · 1 · 2 1 it is assumed that a trader may only suffer from the "intermittence" error from the traditional situation and accept an appropriate response of traditional profit and loss. For the sake of this example 3.1.12, and in the preferred embodiment, it is assumed that the profit and loss corresponding to the results that actually occur in a state is the highest state with reference to the state that is exactly between the units of measurement probability and In the lowest boundary, that is, "state average 値". For this example 3 · 1 · 2 1, the expected expenditure of the amount that should be invested in each state can be calculated, and the investment required to obtain these expenditures is as follows: (Please read the precautions on the back before filling out this page ); Packing ------ Order --------- Printed by the Consumers' Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs. The paper is printed in accordance with China National Standard (CNS) A4 (210 X 297 mm)- 144-473660 A7 B7 V. Description of the invention (142) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs. 3.] • 21-1 State average ($) Expected expenditure ($) Investment that generates expected expenditure ($) (0,80) NA 80 0.837258 (80,80.5) 80.33673 80.33673 0.699493 (80.5,81) 80.83349 80.83349 1.14091 (81,81.5) 81.33029 81.33029 1.755077 (81.5,82) 81.82712 81.82712 2.549131 (82,82.5) 82.32401 82.32401 3.498683 (8 , 83] 82.82094 82.82094 4.543112 (83,83.5) 83.31792 83.31792 5.588056 (83.5,84) 83.81496 83.81496 6.512429 (84,84.5) 84.31204 84.31204 7.206157 (84.5,85) 84.80918 84.80918 7.572248 (85,85.5) 85.30638 85.30638 7. 555924 (85.5,86) 85.80363 85.80363 7.18022 (86,86.5) 86.30094 86.30094 6.493675 (86.5,87) 86.7983 86.7983 5.59628 (87,87.5) 87.29572 87.29572 4.599353 (87.5,88) 87.7932 87.7932 3.611403 (88,88.5) 88 2.29074 88.29074.29074 88.5,89] 88.78834 88.78834 1.939457 (89,89.5] 89.28599 89.28599 1.330046 (Please read the precautions on the back before filling this page) Install ----- r --- Order --------- line, This paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) _ Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 V. Invention Description (143) A7 — B7 (89.5,90] 89.7837 89.7837 0.873212 ( 90, 〇〇] NA 90 1.2795 Note: NA represents, (here) not applicable Table 3 · 1 · 2 1-1 The rightmost column is the result of the above matrix calculation. The expenditure used to construct the matrix Π of this example 3 · 1 · 2 1 is equal to 1 plus the profit of each state shown in Example 3 · 1 · 1. Appropriate use of the system and method of the present invention can obtain almost any arbitrary expenditure or profit profile, for example, a long market, a short position, the option to specify a price transaction, etc., but still maintain the limited scope of the present invention in this description. Obligations and other rights. 3.2 D B A R Portfolio Sometimes we want to combine a series of D B A R or have the right to group into a single portfolio based on different events. In this case, a trader can not only invest money into a distribution corresponding to a limited state of a single event, but also a distribution across states corresponding to all contingent rights groups in this portfolio. In the preferred embodiment, the expenditure of the investment amount in this way can therefore be a function in which all occurrences are compared in the individual DBA R or right groups. This comparison may not only be based on the amount of each group of contingent rights, invested in each appearance state in the distribution, but also like other characteristics, parameters or characteristics of the appearance state (for example, for each potential The magnitude of change in individual contingent group bonds). In this way, the system and method of the present invention can be used to obtain more complex and ------------equipment ------ II order ------- I (please first Read the notes on the reverse side and fill in this page) This paper size is applicable to the Chinese National Standard (CNS) A4 specification (210 X 297 mm) 144) Different expenditures and profits. Since a preferred embodiment of a demand reallocation function (DRF) can be operated on a D B A R or a portfolio with a right group, this type of investment portfolio is extended to a D B A R portfolio, or a D B A R P. D B A R P is a D B AR or contingent group based on a multi-state, multi-event D R F according to the present invention. A preferred embodiment of DBARP involves different events related to different financial products. A DRF is used in the case of each contingent right in the investment portfolio, whose profits are derived from (1) each of the underlying financial products. The amplitude of the change; and (ii) how much money has been invested in each state in the distribution. A large amount of investment in a financial product, such as common stock, will restrain the buyer from restricting the profit of a limited state relative to the buyer of the D B A R or the right group. In a preferred embodiment, the opposite relationship is given between the amount of investment, that is, the profit from a particular state. The advantage of a D B A R portfolio is that it has no tendency to bubble. More specifically, in the preferred embodiment, for example, a large amount of money flowing into the buyer's transaction will increase the seller's profit, so increase the profit and attract investment in these states. The following symbols are used to explain the better practice of further DBARP ----------- --- installation ----------order----II-line, (please first Read the notes on the back and fill in this page again) Example = is the actual change in the financial product i W: is the successful investment amount L on the financial product i! Is the unsuccessful investment amount on the financial product i The transaction cost L is the accumulated loss = Σα. This paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -147-473680

A7 ------- B7_ V. Description of the invention (145) Tι is the normalized profit of a successful transaction ^ 1 is the unit profit of each price unit of a successful exchange invested in a financial product 1 'P ^ It is the profit of a successful exchange investing in each unit of financial product i. The preferred principle of a DBARP is to normalize a part of the accumulated losses to the successful investment and return it to a success. Investment. Unsuccessful investments do not have to be returned. Therefore, in a preferred embodiment, in a relatively small volume financial product, a substantially large profit will benefit from the unsuccessful investment to the majority of the benefits.

rP-nlL In the preferred embodiment, as described below, to determine the expenditure and profit in a D B A R P, the correlation between bond profits is very important. The operation of a D B A R P is explained according to an example of the present invention. For the sake of this example, it is assumed that a portfolio contains two stocks, IB M and MSFT (Microsoft) and the following applied information (for example, a pre-determined termination standard) This paper size applies the Chinese National Standard (CNS) A4 specification ( 210 x 297 mm) -148-(Please read the notes on the back before filling out this page) «-I --- ^ ---- Order --------- Consumption by Staff of Intellectual Property Bureau, Ministry of Economic Affairs Printed by the cooperative 473630 A7 B7_V. Description of the invention (146) Transaction start time: 9/1/9 9 Expiry date: 10/1/99 Announcement date · 9/15/99 Current transaction start date: 9/1 / 99 Current transaction deadline: 9/5/99 Today's date: 9/2/99 Opening price of IB Μ: 1 2 9 Opening price of MSF Τ: 9 6 I Β Μ and MSF Τ Excluding dividends No transaction fees (please (Please read the notes on the back before filling this page) In this example, the status can be limited so that traders can invest when I ΒΜ and MSF Τ fall or rise in price. At the same time, it is assumed that the distribution of the investment amount at the end of the transaction during the current trading period is as follows. The status of the increase in the price of the financial products printed by the consumer property cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs. The amount of $ 65 million investment represents a greater probability that the MSF T will likely increase in price during this period, and I BM will likely fall in price during this period. For the sake of this example, it is further assumed that the actual price is observed at the end of 10/1/9: MSFT: 106 (up 10.42%) This paper size applies the Chinese National Standard (CNS) A4 specification ( 210 X 297 mm) -149-

; ---— — — — — Order ------— II 4736d0 A7 B7 — V. Description of the invention (147) IB Μ: 1 2 7 In this example, there is an unsuccessful investment of $ 1 + 0 '6 5 = $ 1 · 650 million allocated to a successful investment' and for a successful investment, the relative performance of MSF Τ (1 〇 · 4 2 / 10.42, + 1 · 55) = 0.871) is better than 1 BM performance (1 · 55 / (10 · 42 + 1.55) · • 2 2 9). In a better one In the example, 87.1% of the disposable profit is allocated to successful MSF T traders. The remaining part is allocated to the I BM traders, and the profit of each state is calculated as MSF T ·· $ A successful investment of 120 million yuan resulted in a .871 * $ 1.6.5 billion expenditure = $ 1. 427.3 billion The expenditure paid to successful traders was 120M + 143.72M 120M 1 = 119.77% I ΒM: $ 800 million Successful investment resulted in a (1 1 • 871) * $ 165 million expenditure of 2021285 billion yuan. The expenditure paid to successful traders was (please read the precautions on the back before filling this page). Board member Industrial and consumer cooperatives print 80M + 21.285M 80M -1 = 26.6% The profit in this example, which is in the comparative embodiment, is not only a function of investing in each group of DBAR or the right amount, but also the basic financial product in The magnitude of the relevant changes in price or the economic value of this paper in terms of potential events applies to the Chinese National Standard (CNS) A4 (210 X 297 mm) -150- 473680-1 = 68.75% A7 B7 V. Description of the invention ( 148) function. In this particular example, MS FT traders get higher payouts because MS FT far exceeds I BM in performance. In other words, it is more correct to do MSFT long trades than IB MM shorts. The next step of the DBAR P operation is to assume that the prices of both MS F T and IB MU have the same price change range. For example, MSFT is up 10%: [Β Μ is down 10%, while other assumptions remain unchanged. In this situation, the unsuccessful investment of $ 1.65 billion in profits may be equally distributed, but the 捌 MSF Τ and IB Μ successful investments are distributed in equal amounts, that is, each $ 8 · 25 Ten million. In The profit in this situation is: 120M + 82.5M 120M 80M + 82.5M 80M. In this situation, the profit of I BM is 1.5. The profit invested in MSF Τ, because the investment in DBAR of I BM may have the right Group vote ------------ ^ -------- ^ --------- ^ (Please read the notes on the back before filling this page) • 1 = 103.125% Β: The consumer cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs has printed the investment information, which is an investment, and recognizes that the amplitude of the accumulative, cumulative, and cumulative effects of the changes in the results of the flow of the escalation of the change of expectations For example, refer to some votes, this is the public foundation. Jiayi's basic system is relatively short, and it depends on Guan Yin's period. Depends on each other's temptation, but the same easy to do or not. The supply of capital is less demanding and the supply of investment is to support the changes in the IS7 unified notes. The T's satisfies enough to be repaired in F Ming Zhe Sheng Fan Fan S. Pay one, and pay for the capital with the funds provided and the paper size applies the Chinese National Standard (CNS) A4 (210 X 297 mm) -151-473680 Printed by A7 B7 of the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 2. Description of the invention (彳 49) The measurement of the mutual relationship can be obtained in order to calculate the expected profit and expenditure during the transaction period and at the end of each transaction period. As mentioned above, making such an investment in the D B AR range derivative may be somewhat complicated, but it can still be easily accepted by those familiar with the techniques illustrated or practiced in this invention. The previous example of D B A R P has been explained in detail with the event corresponding to the closing price of the underlying securities. The D B A R P s of the present invention is not very narrow, and can be applied to any economically significant event, such as interest rates, economic statistics, commercial real estate leasing, and so on. In addition, other types of DRF s are used in combination with DBARP s, which will be apparent to those skilled in the art based on the exercises of the present invention or this description. 4 Risk Calculation Another advantage of the D B AR or contingent rights group according to the present invention is the ability to provide risk calculations that are easily understood by traders, market risk managers, and other interested parties. These risks include market risk and credit risk, which will be discussed below. 4.1 Market risk Market risk is calculated so that traders can obtain information about the probability distribution of profit and loss of the portfolios applied to their active trading. For all traders related to a set of D B A R or contingent rights, for example a trader may want to know the losses related to the bottom 5 percent of profits and age loss. The bottom five percent is equivalent to the trader's knowledge. This paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm). 152 I ----- 111 ¾ ^ --- II --- Order ·! I --- I (Please read the notes on the back before filling this page) 473680 A7 B7 V. Description of the invention (15) It has a confidence of 95% and will not exceed a loss amount. For the purposes of this description, the amount of loss associated with an individual investment with a given certainty (for example, 95%, 99%) is expressed as capital at risk ("CAR"). In a preferred embodiment of the present invention, CAR can not only calculate individual investments, but also calculate several investments relative to the same event or several events. In the financial industry, three commonly used methods are used to calculate CAR: (1) price under risk ("VAR"); (2) Monte Carlo statistical test simulation experiment method ("MCS"); and ( 3) Previous data simulation experiment method ("HS"). 4.1.1 The price under risk is determined by the capital under risk. V A R is a method for calculating a group of transactions that rely on standard deviations and price changes. These standard deviations and price movement correlations are usually calculated from previous data. Standard deviation data is usually used to calculate the C A R for each individual transaction. To illustrate the use of the invention with a set of DBARs or entitlements va R, the following assumptions are made: (i) a trader has purchased a stock in a traditional manner, assuming IB M stocks of $ 100; (i 1) Using the standard deviation data calculated earlier, find that the standard deviation of IB MM year is 30%; (iii) the normal situation is normal, the variable of IB Μ price has a normal distribution; and (i ν) is The percentage of loss utilized is the bottom five percentages. From the standard normal table, the bottom five percentages of losses correspond to a large standard deviation of 1 · 6 4 5. The paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) · 153-( (Please read the precautions on the back before filling out this page) I! · Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 B7 V. Invention Description (151), so the CAR of this example is-30% * 1 · 6 4 5 * 100, or $ 49 · 35 ° For an example of investing $ 200 in GM, a similar calculation, using the same assumptions, yields a CAR equal to $ 6 5 · 50. In this example, the calculated correlation, Γ, between I BM and GM stock prices is 0.5, and a CAR portfolio that includes the financial status of IB Μ and G Μ can be expressed as follows CAR = ^ .645 (2 Brain cr face ^ + (1.645 ^^^ 7 ^) + 2 ^ * 1.6451.645βΓ / βΛ ^ ίΤ / 5Μ 1.6451.645β ^ Μ (τ ^ = λ / 49 3 52 + 65.502 + 2 * 0.5 * 49.35 * 65.5 = 99.79 where α is the investment in yuan, σ is the standard deviation, and Γ is the correlation. These calculations are usually expressed in the form of a matrix: C is the matrix of the correlation of potential events w is the matrix that contains each The matrix of effective financial positions in the portfolio w τ is the transpose matrix of W. In a preferred embodiment, C is a matrix of y X y, where y is the number of effective financial positions in the portfolio, and The elements of C are:! When i = j, that is, 1 on the diagonal, the paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -154- I — — — — — — — — — — — * IIIIIII — — — — — — — I- (Please read the notes on the back before filling out this page) 4 736 刈 A7 B7 V. Description of the invention (152 is the correlation between events 1 and j CAR Vwr * C * w = 1 (49.35 65.5) 1 0.5Y49.35 0.5 1 65.5 In a preferred embodiment, the DBAR in the present invention may have several steps to assist VAR. Try to list the steps first, and then make a detailed description of each step. The steps are as follows: (1) a Start the distribution of a set of DBAR or qualified limited states, and calculate the standard deviation of the profit of each investment in the limited state in terms of price (for example, yuan); (2) Use the standard deviation of profits for each state and For a profit correlation matrix with states distributed in the same state, perform a matrix calculation 'to obtain the standard deviation of profit for all investments in a set of DBARs or entitlements; (3) For each investment, adjust from step (2 ) Calculated number so that it corresponds to the expected loss percentage, (4) For each unique DB AR in the portfolio may have the right to arrange the number obtained from step (3) to a unique and unique D BAR or a vector with the same number of rights, w; (5) Establish a correlation matrix, including the correlation between each individual DBAR in the portfolio or each group of potential events with rights; and (6) calculations w, and the matrix obtained from step (5), and w -------- II --- · 1111111 ^ · 11111111 (Please read the precautions on the back before filling this page) This paper size applies to China Standard (CNS) A4 specification (210 X 297 mm) Γΐ55: Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs 47360 A7 B7 5. The square root of the product of the transposition of the invention description (153). This result is the C A R obtained using the expected percentage of losses for all D B A R contingent groups in the portfolio. In a preferred embodiment, steps (丨)-(6) of the V A R method can be applied to any of the following set of D B A R or have rights. For the sake of this method, it is assumed that all investments are in derivatives of the D B A R range, using a standard D R F as previously described. Similar analysis can be applied to other forms of DRF s. In step (1), for each group D B A R contingent, for each state i, the standard deviation of the profit per unit investment is calculated as follows

Where σ i is the standard deviation of each unit of profit of the amount invested in each state 1, T: is the total amount invested in state i; T is the sum of all investment amounts distributed across states; Q ^ is defined by T and T: the implied probability that the derived state i occurs; r ^ is the profit invested per unit in state i. In this preferred embodiment, the standard deviation is a function of the total amount of investment distributed across each state and across states, and is also equal to the square root of the unit profit of the state. If α: is the amount of investment in state i 'α: * σ i is the standard deviation 1 for each state 1 in terms of the investment amount (yuan) -------- t --- I-- --- (Please read the precautions on the back before filling out this page) This paper size is applicable to China National Standard (CNS) A4 (210 X 297 mm) -156 · 473680 Printed by A7, Consumer Cooperative of Intellectual Property Bureau, Ministry of Economic Affairs —- ____B7__ 5. Description of the invention (154) Step (2) Calculate the standard deviation of all investments in a set of DBAR or entitlements. Step (2) — Start to calculate the correlation between each pair of states by distributing each pair of possible events under the same state for each group of D B A R or contingent rights. For a standard DRF, these correlations can be calculated by: p a Ah ^ a -ί a -1 1,7 yi-god-. VRFF ^ I decaying heart where P i, j is the correlation between states i and j. In the preferred embodiment, the profit to each state is a negative correlation, because the occurrence of one state (a successful investment) is a prelude to the occurrence of other states (unsuccessful investment). If there are only two states in the state distribution, then two T — T: and the correlation p, ^ is equal to -1, that is, if there are only 1 and j states, the investment in state 1 is successful, and the investment in state j Is an unsuccessful investment, or vice versa. In the preferred embodiment, there are more than two states, and the correlation falls within the range of 0 and -1 (the probability that the correlation is equal to 0 if and if one of the states is equal to 1). In step (2) of the VAR method, the correlation coefficients p ,, ′ are placed in the matrix C s (the subscript indicates the correlation between the same event states), and the rows and columns it contains are equal to the DBAR or have the right group limit The number of states. The correlation matrix is a symmetric matrix with a diagonal of 1. The elements in row i and column j are equal to p: u. From the above step (1), a vector U event having the same number of dimensions η X 1 as the number of states η is sufficient on the DB AR or the right group, and each element in U is equal to α i 氺. (J This paper size applies to China National Standard (CNS) A4 (210 X 297 mm) -157- (Please read the notes on the back before filling out this page) -1 · 1111111 · 1111111 «Consumers’ Cooperatives, Intellectual Property Bureau, Ministry of Economic Affairs Printed 473680 A7 ---- B7 V. Description of the Invention (155) 1. Define the DBAR of the k group may be entitled to the standard deviation 'wk' of the profit of all investments within the state distribution, which can be calculated by the following methods:

wk = ^ UT ^ Cs ^ U Step (3) involves adjusting DBAR contingent rights for each group in the portfolio by adjusting the amount from step (2) with a sum corresponding to a percentage of expected or acceptable loss Calculated standard deviation wk. For the sake of this explanation, suppose that the investment profit has a function with a normal distribution; with 95% confidence, the loss will not exceed one amount; for each group of DBAR or the standard deviation of the entitlement profit, wk can be multiplied by 1 · 6 4 5, which is the standard deviation of 1 · 6 4 5 in the bottom five percentages of the standard normal table. For the sake of illustration, a normal distribution is used, as well as other types of distribution (for example, the Student T distribution) that can be used to calculate the number of standard deviations corresponding to any percentage of interest. As discussed above, in the preferred embodiment of a set of D B A R or entitlement standard D R F A, the largest loss is the amount invested. Therefore, for the purpose of this description, the standard deviation wk is adjusted to reflect that the maximum loss is less than (a) the total investment amount (b) and the percentage of losses related to the calculation of DBAR or entitlement CAR, which is: r \ wk = min 1.645 * ννλ, the size of the original paper is applicable to the Chinese National Standard (CNS) A4 (210 X 297 mm) -158-— — — — — — — — — — — — — — — — — ^ 1111111 « (Please read the notes on the back before filling this page) 4736 刈 A7 B7 V. Description of the invention (156) In fact, by substituting several corresponding extreme percentages (such as the last five percentages) or total A CAR of a relatively small amount of investment, which updates the standard deviation of each event. Step (4) involves substituting and adjusting the standard deviation wk of each of the m groups of DBARs or right groups in step (3) into a column matrix of yxl, w, each element of which Contains Wk, k = 1, ..., y. Step (5) involves establishing a symmetric correlation matrix, C e, with rows and columns equal to the number of states y defined by the DBAR or rights group, where there are more than one trader Set of investments. The correlation matrix C e can be estimated from previous data or may be more directly available, such as the correlation of the matrix, interest rates, capital indexes, commodities and other financial products in all transaction exchange rates can be obtained by: i P Morgan Correlation matrix obtained from the insurance standard database. Other sources of correlation matrix c e information can also be known to those skilled in the art. The diagonal of the correlation matrix ce is 1 ', and 値 at the position i 歹 [] in the matrix is included in the portfolio. For all such DBARs that are valid in all m groups or between the right groups The paired i and j events' are somewhere between the i and j DBAR or entitlement groups. In step (6), the CAR of the Hi-group DBAR or the entire portfolio with the right group is obtained through the calculation of the following matrix 'using each vector w configured from (4) and wk derived from its transposition w τ : CAR: such as r * Ce * w This paper size is applicable to China National Standard (CNS) A4 (210 X 297 public love) (Please read the precautions on the back before filling this page) Loading -------- Order --I ------ Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs-159- Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economy The 値 of the investment portfolio is a loss that will not exceed the loss used for steps (1) to (6) confidence index (95%). Example 4_1 · 1-1: An example of CAR calculation based on VAR A further explanation of a VAR-based, including a standard DRF derived from two sets of DBAR ranges of two common stocks, IB Μ and G Μ Contingent rights group, calculation of CAR portfolio. In this example, the following conditions are assumed: (i) for each of the two sets of DBAR or entitlement groups, where the status is limited and the relevant potential event is the closing price of each stock for the next month; (ii) each There are only three states of the event that correspond to the range of possible closing prices for the day: "Low", "Moderate, and Continuing; (丨 丨 丨) 18] \ 4 and 〇] \ 4 the announcement of these three different states. The units are (4, 0.6667, 4) and (2.333, 1.5,

2.3 3 3); (lv) the transaction fee is zero; (v) for IBM's contingent group, the trader has a dollar investment in the state "low", a ternary investment in the state "moderate", and a binary investment At the state "high"; (vi) for G MM contingent rights group, the parent has a single dollar to invest in the state "moderate"; (ν i 1) expected or acceptable percentage loss assumption Is a normal distribution; and (V iii) the correlation of the estimated price change across the distribution of each type of IB M and G M stocks is 0.5. The above steps (1)-(6) are used in this example to assist in the application of the Chinese National Standard (CNS) A4 specification (210 X 297 mm) to this paper size. 160-I — — — — — — 丨 — — — I * · IIIII 1 I ^^ · 1111111 (Please read the notes on the back before filling this page) 473630 A7 B7 V. Description of the invention (158) VAR is used to calculate CAR. From step (1), for IBM and GM contingent rights group, the standard deviations of the state profits per unit investment amount in each state are (2, 0.8 1 6 5, 2) and (• 5 2 7 4 .5 2 7 4). Further according to the above step (1), in the individual contingent rights group, the amount σ of the investment in each state is multiplied by the standard deviation α of the profit of each investment state previously calculated: so that each investment state The standard deviations of profit are IBM: (2, 2.4495, 4) and GM: (0, 1 · 2 2 5, 0). According to the above step (2), for each group of two sets of DBAR or right groups, any pair of correlation matrix between the states, C is constructed as follows: Yes (Please read the notes on the back before filling in (This page)

qIBM

ζ-jGM 1-0.6124 -0.25 — 0.6124 1 -0.6124 _ -0.25-0.6124 1 1 -0.5345 -0.4286 &quot;-0.5345 1 -0.5345 -0.4286 -0.5345 1 ---- IIII Order 111 !! · * 5 ^ Printed by the Intellectual Property Bureau's Consumer Cooperatives of the Ministry of Economic Affairs, where the first matrix is the correlation between each pair of profits in the state of IB M or the right group, and the second matrix is in the state of G M or the right group Correlation between each pair of profits. At the same time, according to the above step (2), for each of the two groups or the right group, for each investment in this example, the profit of each investment state is the standard deviation of the investment amount (yuan), at * can Dimensions This paper scale applies the Chinese National Standard (CNS) A4 specification (210x297 mm) -161-473630 A7 B7 V. Description of the invention (159) A vector equal to three (that is, the number of states) '2 '0 u reward: 2.4495 4, &quot; ⑽ = 1.225 0 (please read the notes on the back before filling this page) where the vector on the left contains the standard deviation of the profit of each state of IB Μ or the right group in yuan The vector on the right contains the standard deviation in yuan of each state profit of G M or the right group. Furthermore, according to the above step (2), the calculation of a matrix can perform all the investments in each of two groups or the right group to calculate the total standard deviation:

Km * Uwm = 2, w2 = tgm * C, Ugm = 1.225 where the amount found on the left is the standard deviation of the distribution of all investments in IB Μ or the right group, and the amount found on the left is all investments in G Μ or The standard deviation of the distribution of the right group. According to the above step (3), w 1 and w 2 are printed by each of them multiplying by the Intellectual Property Bureau of the Ministry of Economic Affairs's Consumer Cooperatives to print 1 · 6 4 5 (that is, the bottom five percentages in the standard normal table). Corresponding to the standard deviation of 1 · 6 4 5), and then take the smaller two of the following 値 (a) and the result 上面 (b) can be the largest amount that can be lost, that is, each group or the right group Investments in all states:

Wj = min (2 * 1.645,6) = 3.29, w2 = min (2 * 1.225,1) = 1 This paper size applies to China National Standard (CNS) A4 (210 X 297 mm) -162-Ministry of Economy Wisdom Printed by the Consumer Affairs Cooperative of the Property Bureau 473600 A7 B7 V. Description of Invention (160) where the amount on the left is the standard deviation of the adjusted profit for all investments distributed across IB M or the right group, and the amount on the right is for The standard deviation of adjusted profits for all investments distributed across G M or with the right group. These two quantities, w \ and w 2 are the individual D B A R or the right group respectively corresponding to C A R with 95% confidence. In other words, if the assumptions about the normal distribution of state profits have been made, then a trader, for example, 'may have 95% confidence that the loss in the IB M or the right group will not exceed $ 3.29 °. Now proceed to the above in VAR Process step (4), wi and w 2 are placed in a vector of two dimensions, this dimension is equal to the DBAR or the right group in the demonstration trader's portfolio: &quot; 3.29 &quot; w = 1 according to In step (5), a correlation matrix C e with two rows and two columns is either estimated from previous information in a technique in this technique or estimated from other resources (for example, a risk matrix). To be consistent with the assumptions of this description, the estimated correlation between the price changes of IB M and G M is 0.5, and the correlation matrix of potential events is as follows: In step (6), the multiplication of a matrix is performed by The previous paper size of CE applies to China National Standard (CNS) A4 (210 X 297 mm) -163-(Please read the precautions on the back before filling this page) · 1 丨 IIIII Order! — — — — — — The Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs issued 473630 A7 B7 V. After the description of the invention (161) was multiplied by the transpose vector w and the vector w, and the square root of the result of the product was taken: = yjwT * Ce * w = 3.8877 This means that the investment portfolio in this example contains three types of investments in the 1 BM or right group and one in the GM or right group. The trader has 95% confidence that it will not There will be losses of more than $ 3.98. 4.1.2 gLil Monte Carlo statistical test simulation experiment method to determine capital at risk Monte Carlo statistical test simulation experiment method (MCS) is another method commonly used in the financial industry to calculate C AR. For a given group of financial products, MC_S is usually used to simulate the experiment of many representative programs, calculate the profit and loss of each representative program, and then analyze the results of the program's profit and loss distribution. For example, the bottom five percentages of the distribution of the profit and loss of the scheme may correspond to a loss that a trader has 95% confidence and will not exceed. In a preferred embodiment, the MCS method can be used to calculate CAB for a D B AR or an investment group with a right group as follows. Step (1) in the MCS method involves estimation, events that are potential for DBAR or a group of rights, statistical estimation, and the use of traditional econometric techniques, such as GAARC. If the portfolio being analyzed has more than one set of DBARs or rights groups, the estimated distribution will be everyone's paper size applicable to the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -164-- ------ II --- ^ · I ---- — It · —------- ^ I (Please read the notes on the back before filling out this page) 473680 Employees of Intellectual Property Bureau, Ministry of Economic Affairs Printed by Consumer Cooperatives A7 B7 V. Description of Invention (162) Familiar with describing the distribution of multiple variables between and in portfolio events. For example, if the event is potential stock closing prices and the stock price changes have a normal distribution, the estimated distribution may be a multivariate normal distribution that contains the expected price changes, standard deviations, and referrals for each stock. Parameters related to the relevance of each pair of stocks in the portfolio. Multivariate distributions are usually estimated from data on time series of potential events (eg, stock price history) using traditional econometric techniques. Step (2) in the MCS method involves using the distribution estimated in step (1) to simulate a representative scheme. This simulation can use the simulation method contained in the cable bow [such as Numerical Recipes in C], or use simulation software such as @RIS 套 软件 （@ Risk package), or the methods described in this art. For each simulated scenario, in the investment portfolio, each group of D B A R or the right group of D R F determines the expenditure and profit and loss of the calculated investment portfolio. Using the above examples involving IB Μ and G Μ stocks to demonstrate the technique of calculating VAR of CAR, a scheme simulated by MC S technique may be "high" for IB Μ and "low" for G Μ, here In this case, the trader has a quaternary profit in the IB contingent group and a one yuan loss in the GM or contingent group, which totals a total of ternary profit. In step (2), many such schemes are produced, so that the distribution of profit and loss results is obtained. For example, the resulting profits and losses can be arranged in ascending order, so that the percentage corresponding to a given profit and loss can be * ^ · 11 --- II ^ I I ------ * 5 ^ I (Please read the notes on the back before filling out this page) This paper size applies the Chinese National Standard (CNS) A4 (210 X 297 mm) _ 165 _ 473630 A7 B7 V. Description of the invention (163) to be calculated . For example, the bottom 5% may correspond to a 95% confidence that a dimensional trader would not lose more than enough solutions have been generated to provide a properly representative sample. This number may be regarded as the 値 of C A R calculated using MC S vs D B A R or with the right set. In addition, statistics such as average profit and loss, standard deviation, asymmetry, kurtosis, and other similar measures can be calculated from the distribution of profits and losses generated by techniques in this technique. 4.1.3 The use of historical meta-simulation experiments to determine capital under risk. Historical data simulation experiments (HS) are another method for calculating CAR. H S is comparable to MC S in that it uses a representative scheme to calculate the distribution of the profit and loss of a portfolio. Instead of relying on the probability distribution estimated from a simulation scenario, HS uses historical data in the scenario. In a preferred embodiment, HS can be employed to apply to a portfolio of D B A R or a rights group as follows. Corresponds to each potential event of each group D B A R or the right group. Step (1) involves obtaining a time series of the history of the occurrence of an event. For example, if the event is the closing price of a stock, the time series of each closing price of the stock can be obtained from a historical database, such as from Bloomberg, Reuters, or Datastream or other sources that are familiar in the art. Get. Step (2) involves the use of historical papers from step (1) to apply the Chinese National Standard (CNS) A4 specification (210 X 297 mm) to this paper size. _ 166-(Please read the notes on the back before filling in this Page) -------- Order -------- Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 4736 ㈣ A7 B7 V. Invention Description (164) (Please read the precautions on the back before (Fill in this page) Observe that DRF vs. DBAR or entitlement group is used in the portfolio to calculate its expenditure. From the observation of each group of each historical expenditure, a profit and loss portfolio can be calculated. This results in a portfolio of profits and losses corresponding to the historical plan, that is, the portfolio held by the submitter across the entire historical sample of data may be the profits and losses obtained. Step (3) involves arranging the profits and losses of profits and losses in the order of ascending order calculated in step (2). Therefore, the profit and loss can be calculated as a percentage corresponding to the distribution arranged in this order, so that, for example, a C A R 对应 corresponding to 95% confidence can be calculated with reference to the bottom 5%. 4.2 Credit Risk Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs. In the preferred embodiment of the present invention, a trader can use a security loan to invest in a group of DBA or contingent rights. In a preferred embodiment, credit risk can be measured by estimating the amount that other traders may be liable to lose due to the failure of a particular trader to pay a margin loan. For example, a trader may have the right to invest $ 1 in a given state investment for a group of D B A R with $ 0.50 margin. Assume that this example is a standard DRF. If the status does not occur afterwards, the DR $ 1 (ignoring interest) received by the DRF from the trader may be required to repay the margin loan. If the trader does not repay the margin loan with a given term, those traders who have successfully invested may not be able to obtain the full amount of money under the DRF, and -167- This paper standard applies Chinese National Standard (CNS) A4 Specifications (210 X 297 mm) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 _ B7 V. Description of the Invention (165) During a given transaction period that may have a group of contingent rights, the A small amount of profit. Or, this kind of loss due to credit risk can be insured, if the cost of this insurance is borne by the exchange itself or allocated to each trader. One advantage of the system and method of the present invention is that, in a preferred embodiment, the amount of credit risk associated with a group of contingent rights can be easily calculated. In a preferred embodiment, calculating the credit risk of the D B A R contingent group investment portfolio involves calculating the amount of credit capital (C C A R) under a risk similar to the market risk calculation method described above. The calculation of CCAR involves the use of information related to the amount of margin of each group of contingent rights in the portfolio with each trader's investment in each state, and the relevant information of each trader's failure to perform margin loans ( This is generally available through S &amp; P and other rating agencies) and the use of information related to changes in the credit rating of each pair of traders or the probability of non-performance (these can be obtained from the JP Morgan credit matrix database) use. In the preferred embodiment, the calculation accuracy and reliability of CCA R can be made into several different kinds of levels. For example, a CCAR calculation that is basically correct, but can use more data and calculation results to improve, may still be useful depending on contingent rights and the expectations of traders regarding information related to credit risk . For example, although it may be possible to use MCS and HS-related techniques to perform this calculation, the V A R method can be used in C C A R to calculate a set of D B A R or a right. It can be used in the preferred embodiment. Based on VAR, this paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -168- — — — — — — — — I!-· Order IIIII--------(Please read the notes on the back before filling out this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 ---- B7 V. Description of Invention (166)

The steps of the Mc s-based and HS-based methods are described below: 4.2.1 Finding DBA Rj using the VAR-based method Straightforward CCAR method Step (i) of the VAR-based CCAR method, for each in a group DBAR may have the right to trade, including the amount of insurance money used in each transaction. Step (i i) includes obtaining information on the probability that each person who has invested in DBA R or a rights group cannot perform. Probability of failure can be obtained from the J.P. Morgan Credit Matrix database or other resources available, such as techniques well known in the art. In addition to the probability of non-fulfillment ', relevant information can be obtained. For example, a trader with a $ 1 insurance loan who is rated as A A may have a compensation of $ 0.8 in the event of failure to perform. Step (1 i 1) involves ranking the standard deviation of profits in units of investment amounts. This proportional ranking step is the same as described in step (1) of the VAR method described above in estimating market risk. The standard deviation of each profit is obtained according to step (1) of the above VAR method, by (a) the percentage of each investment margin; (b) the probability that the trader cannot perform; (c) the failure The percentage of 'uncompensable' in fulfillment events is arranged in proportion. Step (iv) of the VAR-based CCAR method involves obtaining a ratio of 値 from step (3) for each state and each investment, and performing the above-mentioned steps of the VAR method for estimating market risk (2 paper standards apply) China National Standard (CNS) A4 Specification (210 X 297 mm) -169-1111 ------ I! ^? Il —----- (Please read the precautions on the back before filling this page) Economy Printed by the Consumer Cooperatives of the Ministry of Intellectual Property Bureau 473680 A7 _ B7 V. Calculation of the invention (167)) matrix. In other words, as described in step (3) of the above-mentioned CCAR method, the standard deviation of the profit in terms of investment amount has been arranged proportionally according to the correlation between each pair of possible states (the above-mentioned matrix C s) to measure. This derived number is for each trader to each investment in the D B A R or right group portfolio, which is a unit of investment amount, the standard deviation of profit credit adjustment. For a group of D B A R or rights, the standard deviation of the profits that have been arranged proportionally in this way is arranged into a vector with dimensions equal to the number of traders. Step (v) of the C C A R method based on V A R involves performing a calculation of a matrix, which is similar to the calculation of the step (5) of the V A R method of the C A R method described above. In this calculation, the standard deviation of the credit ratio of the profit obtained from step (4) is used to multiply by a correlation matrix with rows and columns equal to the number of traders. Its diagonal is 1 and other elements. It is the relevance of the above-mentioned credit rating. The combined square root is a standard deviation for all traders in D B A R or the right group because they cannot fulfill the approximate loss. This 値 can be ranked by a 对应 corresponding to the standard deviation of the above credit-related confidence that the loss will not exceed. In the preferred embodiment, any given trader can be deleted from a C C A R calculation. The result is that C C A R faces a given trader who has credit risk due to other investors who have already invested in a group of D B A R or have rights. This calculation can be achieved for all DBAR or right groups of a financially traded person, and the number obtained can be measured by the CAR VAR method step (5) above, and C e of the basic event correlation matrix. . This result corresponds to other traders. The paper size of one trader applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -170- (Please read the precautions on the back before filling this page) Order II ------- --- line 473680 A7 ______________ B7 V. The portfolio of invention description (168) spans all the DBAR or the right group to own the status of the risk of loss due to possible failure to perform. (Please read the precautions on the back before filling this page) 4.2.2 11 Miles ..... Monte Carlo statistical test simulation experiment method to determine the credit capital under the macro risk state As mentioned above, the MCS method is usually used to simulate Group a given financial product representative scheme, calculate the profit and loss of each representative scheme, and then analyze the derived distribution of the profit and loss of the representative scheme. These schemes, which are designed as representatives, generally use the technique of economic measurement time series, and are assumed to have a large correlation with the future behavior of financial products based on the estimated distribution. A preferred embodiment of the MCS method for estimating the DBAR or rights group investment portfolio of the present invention involves the following two steps: Step (1) of the method for printing the MCS by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs is to measure The distribution of events of interest. When calculating a set of DBAR or entitlement CCARs, the event of interest may not only be the main event potentially underlying the DBAR or entitlement group, including events that may be suitable for calculating the above CAR with a multivariate distribution, but also related to the Other investors in the right group cannot fulfill related events. Therefore, in a preferred embodiment, market events (e.g., changes in stock prices) that are classified or categorized by credit rating agencies in relation to events that are potentially at DBAR or entitlement groups and investors in these DBAR or entitlement groups , Changes in interest rates), the estimated multivariate distribution, and loans that may not be able to compensate for the loss of investment. For example, a multivariate distribution to be estimated may assume that the Chinese National Standard (CNS) A4 specification (210 X 297 mm) is applied to the paper size of the market textbook. -171- 473680 Printed by the Consumers ’Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7 V. Description of the invention (169) The changes in the credit evaluation or classification are joint normality distributions. To estimate this kind of distribution may therefore have to estimate the 'change in' average 値 for potential market events (such as the expected change in interest rates until the expiry date), the expected change in average credit assessments until the expiry date, for each The standard deviation of market events and changes in credit evaluation, and a correlation matrix containing all the correlations between each pair of events, including pairs of markets and credits. Therefore, a preferred embodiment of the MCS method, when it is applied to the CCAR measurement of the DBAR or the right group of the present invention, generally requires some information about the intervening market events (such as changes in the price of the issued stock) and credit events (such as being Is it possible for an investor rated S &amp; P to fail to perform or to be downgraded when the price of the issued stock falls)? It is sometimes difficult to estimate the correlation between market events such as changes in stock prices and interest rates Sex, on the other hand, and credit-related events such as demotion or inability to perform. These difficulties may arise from rare credit downgrades and unfulfilled events. This rare credit-related event may represent that the measurements used in the MCS simulation may only be supported by very low confidence. In this case, assumptions based on markets and credit-related events can be used. For example, it is not common to use a correlation-sensitive analysis, that is, to assume a correlation between the market and credit-related events, and then change this assumption across the entire range of correlations from 1 to 1. Decide on effects throughout CCAR. A better way to estimate correlations between events is to use a source that is not unusual and relevant to Tan Yong related events. Two paper sizes are applicable to China National Standard (CNS) A4 (210 X 297 mm) 172 ------- III I --- install ----- order --- I --- 1 · Line I (Please read the precautions on the back before filling this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 Α7 Β7 V. Description of the invention (170) method can be used in this better pipeline. First, information that can be obtained provides a higher level of confidence in credit-related events. For example, data on the frequencies that are not expected to perform can be purchased from companies such as KMV. These materials provide different groups with the opportunity to update daily non-performance. Second, the more frequently observed probability of unfulfillment can be measured from market interest rates. For example, companies that provide information such as Bloomberg and Reuters often provide information to investors who need to invest in bonds with different credit ratings, such as A A A, A A, A, A-. Other methods can easily use the techniques in this art to provide estimates of the probability of non-performance by different groups. This estimate can be updated daily so that there can be greater confidence in the parameters commonly required by MCS, such as the correlation between changes in the probability of failure to perform and changes in stock prices, interest rates, and exchange rates. This correlation is estimated to illustrate the assumption of two sets of DBAR contingent groups, one of which is based on the stock market closing within three months of the IBM, and the other based on the 30-year US The close of government bonds is based on a glut. In this demonstration, it is also assumed that the investment that has paid the margin in each group can be divided into five different credit scoring classes. Information on the daily changes in the prices of IB and government bonds can be obtained from companies such as Bloomberg and Reuters. Information on frequent changes in the probability of an investor's expected inability to perform, for example, estimates can be obtained from KMV Company, or from the above-mentioned interest rate data. Since the probability of failure is in the range of 0 to 1, a distribution in this interval is chosen in this description. For example, for the sake of this description, it can be assumed that investors are not expected to perform ------------ 1 i—— — — — — — —---- ^ (Please read the note on the back first Please fill in this page again for this matter) This paper size is applicable to China National Standard (CNS) A4 specification (210 X 297 mm) -173- 4736 Shan A7 ____ Β7 V. Description of the invention (171) (Please read the notes on the back before filling On this page) the probability of a row is distributed with a symbolic logic, and the joint distribution of stock movements in IB M stocks and the 30-year public debt are distributed with a normal distribution of two variables. The distribution of the symbolic logic and the parameters of the normal distribution of the two variables can be measured using techniques well known in the economics of techniques in this art. Step (ii) of the method of printing MCS by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs, as it can be applied to measure the DBAR or the CCAR with the right group, involves the use of multi-variables in measuring the representative representative scheme in the step (i) Distribution. As mentioned above, this simulation can be accomplished using methods and software that are well known in the techniques available in the art. For each simulated scenario, the simulated unfulfillable ratio can be multiplied by the amount of margin loss that a trader faces and the simulated market changes, and, if any, failed investments made by investors. This product represents an estimated loss rate because the investor cannot perform. Many schemes like this can be generated so that a distribution of the expected losses associated with credit can be obtained. Under the condition that there are enough schemes that can provide a meaningful sample, the smallest 値 of the top five percentages in the distribution, for example, may correspond to a trader who has 95% confidence that it will not have an excessive loss. In the preferred embodiment, the 値 selected to reflect an expected or appropriate level of confidence in the distribution is used when D B A R or the right group C C A R is analyzed. 4.2.3 Determining Credit Capital under Risk Using Historical Data Simulation Experiment (HS) As mentioned above, Historical Data Simulation Experiment (HS) is another method for calculating CAR. HS is comparable to MCS in that it is representative -174- This paper size is applicable to the Chinese National Standard (CNS) A4 (210 X 297 mm) 473680 A7 B7 V. Invention Description (172) (Please read the note on the back first (Please fill in this page again) to use the scheme to calculate the distribution of the profit and loss of the portfolio. H S does not rely on the probability distribution estimated from a simulation scenario, but rather uses historical data from the scenario. In a preferred embodiment, HS can use the following three steps to be applied to an investment portfolio with the following D B A R or rights group. Step (i) involves obtaining the same information as the market-related events in the CAR text above. In addition, using HS to measure C C AR, historical time series data is also used in credit-related events such as the probability of being downgraded or unfulfilled. Because these data are very rare, the methods described above can be used to obtain data on more commonly observed, credit-related events. For example, in a preferred embodiment, data that is observed very frequently in terms of the expected probability of unfulfillment can be obtained from KV Company. It can also be obtained using techniques well known in the art. Step (1 1) involves the use of historical data from step (i). Observations printed by the Employees' Cooperatives of the Intellectual Property Bureau of the Ministry of Economy use the D R F to D B A R or the right group in the investment portfolio to calculate its expenditure. In order to use HS to measure C C AR, the amount of re-payment of the loss transaction is then multiplied by the expected probability of non-performance, so that an expected loss for each group or right group can be obtained. These losses are added up by the trader's entire investment, so that at each historical observation point, an expected loss due to failure to perform can be blamed on each trader. The amount of losses for all investors can be added up at the same time, so that an expected amount of losses can be obtained for all investors and for each historical observation point. Step (1 i i) involves arranging to be calculated in step (i 1) The paper size applies the Chinese National Standard (CNS) A4 (210 X 297 mm) -175-'473680 A7

V. Description of the Invention (I73) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs ′ Profit and loss distribution in ascending order Profit and loss 値. A percentage of the amount expected to be lost due to a credit-related event can therefore be calculated for any distribution so allocated. For example, a C C A R 对应 corresponding to 95% confidence can be calculated with reference to 95% of the loss distribution. 5 Liquidity and price / quantity relationships In contingent transactions, whether in the traditional market or the use of the DBAR or the right group of the present invention, the distinction lies between market expectations, information, risk aversion, and The basic level of claims that is determined by the state of a trader's finances is often helpful with errors due to changes in liquidity. For example, the general base for a five-year reciprocal credit market in the United Kingdom (that is, swapping variable interest rates for a fixed rate) may be 6. · 7 9% with a purchase of 2 basis points / Sell (that is, sell 6.77%, 6.81% buy). A large marketer might want to trade a £ 750 million reciprocal credit at the correct or basic market's intermediate market price of 7.9%. According to the current standards of the traditional market, when the effectiveness of liquidity is very small, large transactions may reduce the interest rate that is willing to provide to 6.70%, which is 7 points less than the average asking price (this may It can be applied to an asking price of less than 1 billion pounds), and it is 9 basis points lower than the average mid-market price. The difference between the financial status of a trader's general or mid-term market price and the difference between the price at which the transaction can actually be completed ', that is, buying or selling, is often called a liquidity fee. For the specification of this paper, the Chinese National Standard (CNS) A4 specification (210 X 297 mm) applies -176- — — — I1IIIIIIII -ml — — — ^ 11111111 (Please read the precautions on the back before filling this page) Economy Printed by the Ministry of Intellectual Property Bureau's Consumer Cooperatives 473680 A7 __ B7 5. In the example of the invention description (174), the reciprocal credit in the UK for five years, the cost of a 1 basis point liquidity is approximately 0 · 0 4% of the transaction value, so The cost of liquidity at 9 basis points is approximately £ 2.7 million. If there is no intentional information or other basic "shock" invades the market, this liquidity fee is a permanent liquidity transaction fee for the trader-when the trader decides to circulate a large amount of financial status Expenses that must be incurred. In addition, at present, in the traditional market, there is no reliable method to predict how the relationship between price and liquidity can be derived from the logged-in buy or sell. Usually this is only applied to a small or representative number. . The relationship between price and quantity may be very volatile due to changes in liquidity. These relationships may also be non-linear. For example, it may take more than twice as much money to spread in terms of buy or sell to trade a second financial position that may only have twice the first financial position. From the standpoint of liquidity and transaction costs, the D B A R of the present invention may provide better advantages than traditional markets. In the preferred embodiment, the relationship between price (or profit) and investment quantity (demand) is determined mathematically by a DRF. In a preferred embodiment using a standard DRF, as each state i increases, the implied probability Q ^ at a reduced rate has the amount of investment in that state: This paper scale applies Chinese national standards ( CNS) A4 specification (210 X 297 mm) -177- ------------- install -------- order --------- line (please first Read the notes on the back and fill in this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 B7 V. Invention Description (175) a 7]% —Τ-Ί] dT 「T1

yJA dTt2 T3 = ^ = g /

Shen… a T1— T where T is the total amount of investment funds across all D B A R or rightful group states, and T: is the amount of investment in state i. When a given amount is large, the implied probability of this state approaches 1 in a gradual manner. The final formula above immediately provides all traders with a very clear relationship between the implied probability and the investment in non-state i. This expression indicates that the relationship is negative, that is, as the amount of investment in other states increases, the implied probability of a given state i will decrease. Because adding a state that is not a given state is equivalent to selling a given state 1 in the market, the above formula shows

dTJ, M, in a preferred embodiment, how the implied probability of a given state changes when a quantity in that state is to be sold at a higher rate, that is, the "buy" of the market is the quantity as Come to sell. The above formula | indicates that in a preferred embodiment, when a given quantity is required or wants to be purchased, how does the probability of a given state change ', that is, the market's "sell The price is the quantity the buyer wants. . In a preferred embodiment, for each group of investments in a group of D B A R or the number of sets of rights with a limited set of states, a curve of the set of buyers and sellers as a function of the amount of investment can be obtained. In the DBAR contingent rights group of the present invention, 'There is no buyer or seller of this paper. The size of the paper applies to the Chinese National Standard (CNS) A4 specification (210 X 297 male f)-178- ------------ -------— It · — — — — --II (Please read the notes on the back before filling this page) 473680 A7 --------- B7 V. Description of the invention (176) ( Please read the notes on the back before filling this page.) The mathematical relationship of force ° ± M t is to provide a way to explain how the system and method of the present invention can provide DBAR or have the right group without the buyer / seller relationship. Some buyer / seller relationships feature. Economists usually prefer to deal with some needs and the interactive elasticity of demand change. In a preferred embodiment of the system and method of the present invention, and using the above-mentioned symbols, ^ Tj the consumer cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs prints the above first expression to indicate that when the state i becomes more and more obvious (That is, when Q: increases to 1), a small change in the amount of all investment in state i has a percentage effect on the probability implied by state i. The second expression states that a small change in the amount invested in state j will reduce the probability implied by state i at a rate that is proportional to the probability implied by other states j. In a preferred embodiment, in order to effectively "sell" a state, a trader must invest or "buy" a complementary state, that is, a state other than one sold. So 'in a preferred embodiment involving a set of two states D B AR or contingent rights, a "seller" of state 1 will "buy" state 2 and vice versa. For the "sell" status, this paper applies the Chinese National Standard (CNS) A4 specification (210 x 297 mm) -179- 473680 printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7 V. Invention Description (177) State 1 , State 2 needs to be "buy" in the ratio of the amount invested in State 2 to the amount invested in State 1. In a state distribution with more than two states, a "complementary state" of a given state is "sold" to be D B A R or all other states with the right group. Therefore, as mentioned above, a state of "selling" involves a multi-state investment in a state of "buying" complementary. From this point of view, an implied sell is the effect of a small investment at an implied probability from a particular state. At the same time, from this point of view, an implicit buy is the effect of a small multi-state investment with an implicit probability from a complementary state. In the preferred embodiment of the DBAR or the right group, the effect of an investment amount in the implicit probability can be described as follows: Implied "Buy" = t-(Bu L / T Hidden The "sell" = + mountain * (1/1-1 / Τ) * Λ T, where △ T i (for a first-order approximation 'is considered a very small 値) is for "buy "Or" sell "the amount of investment. These implicit" buy, "and" sell "expressions can be used to approximate calculations. These expressions indicate that in a group of DBAR or have How the 'possible liquidity' effect in the rights group can be similarly categorized as in the traditional market. However, in the traditional market, there is no easy way to calculate the quantity of any given market. The full paper size of the two states in the group DBAR or the right group applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -180-&quot; --------- I --- ------ II Order II! (Please read the precautions on the back before filling out this page) 473680 Employees' Consumption of Intellectual Property Bureau, Ministry of Economic Affairs Cooperative prints A7 B7 V. Description of the invention (178) Liquidity effect-or liquidity reaction, the amount τ that can be invested in a given state, and the amount of investment T i 6 in its complementary state, To express the form of the function: the implicit "buyer" demand responseΊ] 7;. + 7; Γ + Δ7;.: Threatening the implicit "sell" demand response implicit "buy" demand response function The effect of the hidden state probability that an investment is used to hedge an investment with a size of △ △ is shown. The size of a hedged investment in a complementary state is the same as the investment in a complementary state. The amount is proportional to the risk-averse investment (ie, the third term of the denominator). The implied "sell" demand response indicates that the implied state probability is from being in a special limited state, and an increase is △ The effect of T i in the preferred embodiment of the system and method of the present invention, for the final profit during a given transaction, it can be applied to calculate a set of DBAR or entitlements. Therefore, in the preferred embodiment, unless Transaction amount The effect on the re-profit is permanent, that is, it lasts until the end of the transaction, otherwise a group of DBARs may have the right and do not impose a permanent circulation fee like the traditional market. Therefore, in the preferred embodiment, Traders can easily calculate the effect from investment to DBAR or the right to organize profits, and this paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -181 --------- ---- -------- I ------ ^ (Please read the precautions on the back before filling this page) 473680 A7 ___ B7 V. Description of the invention (179) (Please read the back on first Note again on this page) Unless these calculated effects are permanent, they will not affect the closing transaction and, therefore, can be ignored under appropriate circumstances. In other words, investing in a set of DBAR or contingent preferred embodiments, the trader will not be charged a permanent liquidity fee like the traditional market. Of course, the effect of a large investment can certainly make a The group DBAR may have the right to move the profit during the trading period. In the preferred embodiment, these effects may be offset by subsequent investments to move the market to normal prices (without any fundamental or general price changes). In contrast, in traditional markets, there is usually a (toll booth) effect: each time a trader enters or exits the market, there is a charge or change. This fee is higher at less “flow” or circulation and represents a permanent loss for a trader. In contrast, in the preferred embodiment of the D B AR or the right group, in addition to the exchange cost, there is no such permanent circulation tax or royalty for entering and leaving the market. Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs. If a trader attempts to invest a very large amount of money near the end of the Father's Day, the market may not have enough time to adjust to the general price, making the investment in a group The liquidity effect in the DBAR contingent group may be permanent. Therefore, in the preferred embodiment, there may be an attached incentive so that compared investments will not appear at the end of the transaction, so providing an incentive to invest earlier, which will make the overall liquidity and profit Benefit from the adjustment. But 'due to the impact of a large amount of investment on the market, a trader can easily calculate the effect of a trader's opinion that the profit may be permanent (for example, the paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -182-4736〇 A7 B7 V. Description of the invention (18〇) (for example, at the end of the transaction). For example, in the example of the two hedging periods above (example 3.1.19), assuming that the trader's investment in the example description does not have a material impact on the registered profit, then this trader is a "market inquiry Pricer ". The hedging transaction during the second trading period in the example above reflects this assumption. The following expressions equivalent to Η take into account the possible permanent effect of a large trading investment at the closing profit (for example, because the transaction made is very close to the end of the transaction): H ^ Pt-Tt + ^^-2 ^ Tt ^ Pt ^ P; + A ^ Pt ^ T: + x where 'is the symbol used in Example 3 · 1 · 1 9 and T t + τ is the total investment amount during t + 1 and T ^ t + i is the amount of investment in the complementary state during period t + 1. The expression of Η is a quadratic solution of an expected expenditure using this symbol. For example, if a total investment of 10 billion yuan T is invested during the trading period 2, then according to the above formula, the risk-free trading investment is assumed to have a permanent effect on profit and $ 7 · 0 1 8 in Example 3 · 1 · 1 9 A comparison of 75 million and 50 million yuan is $ 7,403.5 million. Compared with $ 1.48 0 7 7 million in Example 3 · 1 · 19, the locked profit and loss due to the new hedge is equal to $ 1 · 2 3 2 million. That is, this paper size is applicable to China National Standard (CNS) A4 specification (210 X 297 mm) -183- (Please read the precautions on the back before filling this page) Installation · ----— II Order ·! 111! · &Quot; ^ Printed by the Employees' Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs, printed by the Employees' Cooperatives of the Ministry of Economic Affairs, the Consumers' Cooperatives printed by 473680 A7 ______ B7 V. Description of the invention (181) The investment assumed in the example problem is 1 〇%, this difference indicates that the liquidity effect is reasonable in the market for DBAR contingent rights group. There is no easy way to estimate or calculate the effect of liquidity in traditional markets. 6 Detailed description of figures Now refer to figures. Similar elements appearing in different figures are identified by the same reference number. Figures 1 and 2 schematically show a preferred embodiment of a group of D B A R or having the right to exchange a network architecture. As shown in Figures 1 and 2, this architecture and the architecture based on network decentralization make use of the object-oriented principle that enables the method of the present invention. In Figure 1, a central controller 100 has several software and hardware components and is assigned to a host computer or several workstations. The central controller 100 is preferably placed in a device with backup power, the ability to recover from a disaster, and other similar infrastructures, and communicates with the transactions in the DBAR or the right group of the present invention through a communication link. The investors and investors' computers and devices are connected at 160, 170, 180, 190, and 2000. Using the signals transmitted by the communication link 110, they can be translated into ciphers using operations such as B 10 w f i s h and other public or private forms of operations. This communication link 1 1 0 can be dialed up via a standard modem 1 2 0; a dedicated cable for establishing a local area network (LAN) or a wide area network (w AN) 1 3 0 Agreement; a public Internet connection 1 40; or no Chinese paper standard (CNS) A4 (210 X 297 mm) applicable to this paper size 184 -------------- ^ -------- ^ --------- ^ I (Please read the notes on the back before filling this page) A7

473630 V. Description of the invention 〇82) Wire connection 1 50. Any of the computers and devices i 6 0 170, 18 0, 1 g 0, and 2 0 shown in FIG. 1 can use any connection in the (wheel) hub 1 1 1 in the illustration 1 2 〇, 130, 140, and 150. Other communication links, such as radio transmission, will be familiar to those skilled in the art. As shown in Figure 1, to establish a communication connection with the central controller 100, for example, a trader or investor can use the workstation 160 to run UNIX, Windows NT, Linux, or other operating systems. In a preferred embodiment, the computer used by the trader or investor includes basic input / output capabilities, a hard disk or other mass storage device, and a central processing unit (eg, Intel's Pentium III processor) , Random access memory, network interface cards, and the use of communications. A trader or investor can use a portable notebook computer i 8 0, or a network computer 1 9 with minimal memory and storage capacity, or a personal digital handheld device 2 0 0 . Mobile phones or other network devices can also be used to process and display and contact information from the central controller 100. Figure 2 illustrates a preferred embodiment of a central controller 100 containing several software and hardware components. A computer with a central controller 100 is preferably a high-level workstation capable of running commercial operating systems and application resources, such as UNIX ^ mdows NT, SQL server, and transaction server. In a preferred embodiment, these computers are high-level personal computers with Intel's (X 8 6 "instructions and") central processing units (CPUs) and at least 128 megabytes of random memory ( Please read the notes on the back before filling out this page) i IIIIII Order !! IIIII · Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs This paper is in accordance with China National Standard (CNS) A4 (210 X 297 mm) -185 -Printed by the Consumers' Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs 473600 A7 B7 V. Description of the invention (183) Access to memory (RA M), and hard disks with several billion gigabytes of data storage capacity. In a preferred embodiment, the computer described in FIG. 2 is a machine equipped with a JA AVA virtual machine, so it can process JA AVA instructions. In other preferred embodiments, the 'central controller 100' may not need to use the instruction set of JAVA. In a preferred embodiment of the central controller 100 as shown in FIG. 2, a software application server 2 10 of a workstation, like a Weblogic server of the BEA system, is received from an investor via a communication link 1 10 Computers and devices 160, 170, 180, 190, and 200 receive information. In order to handle the needs of investors' computer and device services, as well as the procedures for arranging service requirements to the hardware and software components of the central controller 100, the software application server 2 10 is responsible for presenting readable use Interface to investors' computers and devices. The user interfaces available on the software application server 2 10 include Hypertext Annotated Language (HTML) web pages, JAVA program types, JAVA or active server web pages, or familiar with this technology using web-based illustrations. Other forms of user interface. For example, a trader or investor can connect to TML via an Internet connection via a remote control method (R M I) and / or use the Internet Interoperability Protocol (II 0) on the standard TC / IP protocol P), sending a request to the software application server 210. Other methods for transmitting investor requests and instructions, and presenting a readable interface from the software application server 210 to traders and investors will be familiar to those skilled in the art. For example, the software application server 2 1 0 may dominate the active server webpage and use DC 0 Μ with traders and investors. The paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -186 · --------------------- Order --------- (Please read the notes on the back before filling out this page) Employees of the Intellectual Property Bureau of the Ministry of Economic Affairs Printed by Consumer Cooperatives 4736 ㈧ A7 ___ B7 V. Description of Invention (184) Department. In a preferred embodiment, the user interface used by the software application server 2 10 according to the present invention invests in a set of DBARs or has the right to 'propose the required system operation login system, account management, transaction, Market data, and other input / output information. A preferred embodiment utilizes the T M L and JA V A program type interfaces. Η TML webpages can be supplemented with embedded applications or "program types" using the techniques in this art, based on JAV Α or ActiveX standards or other feasible applications. In a preferred embodiment, software application server Device 2 10 relies on network connection services connected to other computers in central controller 100. The computer containing the central controller 100 is preferably placed in the same local area network (such as 'Ethernet LAN'), but it can be remotely and exclusively connected to the Internet, dial-up or Other similar connections. In the preferred embodiment, the interconnection between all the computers including the central controller 100 can use DCOM, CORBA, or TCP / IP or other various technologies familiar with this technology. Services to assist 〇 From the investor's computer to the software application server 2 1 0 Representatively requested services include: (1) Requires TML web pages (for example, browse or find a website); (2) DBAR for trading or has the right Log on to the system; (3) View real-time and historical market data and market news; (4) Request for analysis and calculations such as profit, market risk, and credit risk; (5) By browsing HTML pages or JAVA programs Type, this paper size applies Chinese National Standard (CNS) A4 specification (210 X 297 mm) -187- ------------- ^ ------- I Order ·! ----- line (please read the notes on the back before filling this page) 473680 A7 B7 V. Description of the invention (185) (please read the notes on the back before filling this page) Choose a group of DBARs or Have rights; (6) make an investment in one or more groups of DBARs or have rights limited status; and (7) monitor investments in a group of DBARs or have rights. In the preferred embodiment described in FIG. 2, an object demand broker (ORB) 2 3 0 can be a software that can operate in special software to receive, accumulate, and lead from the software application server 2 1 0 Station computer for service request. For example, R B 2 3 0 can operate an Insprise product, a software product called Visibroker, and other products that request a mediator architecture (C 0 R B A) to provide a series of functions and services related to general objects. In a preferred example, a function of the ORB 230 printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economics is to provide a user manual service that is well known in the object-oriented software industry. The organization is related and you can access these objects by name. When an object is requested to be entered in the form of a name, the object is exemplified by OR B 230 (that is, resulting in execution). For example, in a preferred embodiment, for the purpose of calculating profits using a standard DRF, the computer code is organized into a JAVA type model, which is an object called "DRF profit", and the use of RB 2 3 0 The manual service will issue a profit calculation request to the software application server 2 10 at any time, and the object caused by the name is responsible. In a preferred embodiment, OR B 230's other functions are to maintain the object-oriented software industry's well-known, including an object interface database storage interface. The object interface contains information about which function the computer code mode performs. For example, in a preferred embodiment, 'this paper size is called the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -188- printed by the Intellectual Property Bureau of the Ministry of Economy ’s Consumer Cooperatives ’A4 _____B7 V. Description of the Invention (186) A part of the interface of the "DRF Profit" object is a function that retrieves the current rights to a group of DBARs and distributes investment amounts across states. In a preferred embodiment, 0RB 2 3 0 other functions are to manage the length of the object execution time illustrated by 0 RB 2 3 0 'and manage other things like whether objects are shared and how objects manage memory. Features. For example, in a preferred embodiment, depending on a request from the software application server 210, the ORB 230 decides whether an object processing the market will share this information with other objects, such as distributing profits to investments in a limited state Objects. In a preferred embodiment, OR B 230's other function is to provide the ability of objects to communicate asynchronously based on the activity of other objects, responding to messages or data at different times and frequencies. For example, in a preferred embodiment, a set of DBAR or entitlement objects is calculated, a new investment is asynchronously reflected in real time, and in the absence of a software application server 2 10 or other objects Ask for automatic recalculation of profits. In a preferred embodiment, this asynchronous processing is important, where real-time calculations are reflected in other activities in the system 'like a group of DBARs or a trader with rights to make a new The investment was completed on time with the standard performance previously determined to be terminated. In a preferred embodiment, the other functions of OR B 230 are to provide navigation functions well known in the object oriented software industry. Generally speaking, navigation is a process that must perform specified functions to obtain information about an object. For example, in a preferred embodiment of the present invention, this kind of information includes the information of the trader and the account, and he can be used on this paper standard to apply the Chinese National Standard (CNS) A4 specification (210 X 297 mm)- 189-— —— — — — — — — · 1111111 ^ · 11111111 &lt; (Please read the notes on the back before filling in this page) 473630 Α7 Β7 V. Description of the invention (187) The form of the object, which is in the object-oriented program Medium is very common. (Please read the notes on the back before filling in this page) ORB 2 3 0 can also provide other functions, such as those provided by Visibroker products ’according to the standards and practices well known by the object-oriented software industry. Printed by a consumer cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs. As shown in Figure 2, a preferred embodiment of the transaction server 240 is a computer that runs special software to perform different tasks, including: (1) Response from 0RB Data requests from 230, such as users, account numbers, transaction data, and market data requests; (2) Perform calculations related to DBAR or rights, such as profit distribution and credit distribution at the end of the transaction period and during the transaction period Exposure to risks; and (3) On the basis of DRF expenditures, DBAR may have the right to update investor accounts and log in or calculate out trader surpluses and unaccounted investments. The transaction server 2 4 0 preferably processes all requests from OR B 2 3 0 and asks the data storage device 2 6 0 for these requests that require data to be stored (for example, investor and account information). In a preferred embodiment shown in Figure 2, a market data feeder 270 supplies real time and historical market data, market news, and corporate behavior data. In order to determine the event results and update the trading period profit. This special software implemented in the transaction server 240 is best used with object-oriented skills and with JAVA, like C ++ or for performing the above tasks. As shown in FIG. 2, in a preferred embodiment, the data storage device 260 is capable of operating database software such as Microsoft's SQL server or Oracle's enterprise server. The type of database in the data storage device 2 60 can be used to support DBAR or have the right to exchange the best package &amp; Zhang scale is applicable to China National Standard (CNS) A4 specifications (210 X 297-mm) Γΐ90 Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 ----- B7 V. Description of the invention (188) Including: (1) Trader and account database 2 6 1; (2) Market profit database 262; ( 3) Market data database 263; (4) Event data database 2 64; (5) Risk data database 2 6 5; (6) Father Easy Notebook database 2 6 6; and (7) Terms and Conditions Database 2 6 7. The type of data is best stored in each database as shown in Figure 4. In a preferred embodiment, the connection between the data storage device 260 and the transaction server 240 is via a database connection protocol (DBC) of the TCP / IP-level standard, such as JAVA DBC (JDBC ) To complete. Other methods and protocols will be familiar to those skilled in the art. Referring to Figure 2, the application server 210 and ORB 230, when the transaction server 240 forms a demand-based transaction processor, can be considered to form an interface processor. Furthermore, the database led by the data storage device 260 can be considered to form a transaction status database. Investors, who can also be said to be traders, contact computers and devices 1 60, 1 70, 1 80, 1 0, and 2 0 through communication links 1 10, which can be considered to execute a A series of demand-based transactions can also be extended to demand-based transactions with demand-based transaction processors. A series of demand-based transactions, such as those that can be used by traders to obtain market information, to establish a transaction, or to close a transaction. Fig. 2 depicts a set of D B AR or a preferred embodiment of a right-assistant. As shown in Figure 3, an exchange or issuer first selects a major economic event, 300. In this preferred embodiment, after this exchange, the paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 public love) -191---------- I! · · IIII! I Order · 11—! 11 · * ^ (Please read the notes on the back before filling out this page) 473680 A7 B7 V. Description of the invention (189) Divide the event into several possible results to mutually exclusive and fully depleted state 3 0 5 so that One of the possible states in the distinguished distribution is guaranteed to occur, and the sum of the probability of occurrence of each distinguished state is equal to 1. After the transaction can begin to start from 3 1 1 of the first trading period 3 1 0. In the preferred embodiment described in FIG. 3, a group of DBARs may have the right to have a trading period of 3 1 0, 3 2 0, 330, and 340, and the starting dates of the trading period are 31 1, 321, 331, and 341, respectively. , Followed immediately by a predetermined time interval of 3 1 3, 3 2 3, 3 3 3, and 3 4 3 during the closing period of each trading period. The predetermined time interval should preferably be short to ensure continuity. In a preferred embodiment, during each transaction, the transaction server 240 executes the JAVA code, which is DBAR or has the right to assist the DRF to immediately adjust the change in the investment amount in each limited state. Changes in market conditions during a transaction, such as changes in price or volatility, and among all other factors, 'changes in investor risk appetite and liquidity in the underlying market will result in changes in the amount of investment in each limited state, It therefore reflects the desired change in traders' definition of the DBAR or entitlement state distribution. In a preferred embodiment, the adjusted profit calculated during the trading period, that is, the profit during the trading period, is only the information price-only it has been determined at the end of each trading period The profit is for a trader who invests in a group or DBAR or right group portfolio to distribute profits and losses. In a preferred embodiment, for example, at the end of the transaction period, at the end of the transaction period 3 1 3 (please read the notes on the back before filling this page) I ----- line! Printed by the Consumers' Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs, the paper size applies to the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -192- 6 3 7 4 A7 _— _B7____ V. Description of the invention (19〇), 3 2 3, 3 3 3, and 3 4 3, the final profit is distributed and locked. The final profit is the ratio of the profit distributed per unit investment amount in each limited state when the state occurs. In a preferred embodiment, when the market conditions change, each trading period can therefore have a different set of final profits, thus enabling traders to invest in subsequent trading periods. This pair of trading periods has ended earlier Investment hedging. In other preferred embodiments, not shown, the overlap of trading periods makes more than one trading period open to the same set of previously defined states for investment. For example, an early trading period can remain open when a successive trading period opens or closes. Other overlapping trading periods are possible and obvious to those familiar with the art. The standard DRF, as previously described, is a preferred embodiment of DRF that distributes investments across states and the distribution of each state, transaction costs, and event results and the distribution of profits to each state when the state occurs. As mentioned above, a standard DRF of the present invention reallocates the amount of investment that has not occurred in the state to the investment in the state. Every trader whose investment does occur in the state, in addition to the original investment in the rising state, obtains a proportionate share from the state that did not occur, minus transaction costs. As shown in Fig. 3, in a preferred embodiment, at the end of the last transaction period 3 3 3, the transaction is suspended and the results of potential contingent events are obtained during the observation period 3 50. In a preferred embodiment, only the outcome of a potential contingent event must be uncertain when profit is still locked in during the transaction. In other words, there is a potential contingent right. This paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -193- (Please read the precautions on the back before filling this page)

Install i I I--II Order --- III Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs 473630 Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7 V. The results of the invention (191) may actually have Occurs before the end of a transaction, as long as the true result can be unknown, for example, due to a delay in measuring or confirming the outcome of the event. For example, this may be the case for consumer price inflation in the overall economy. In the preferred embodiment shown in Fig. 2, once the result is observed at time 350, step 360 operates at the final profit from all the trading periods and determines the expenditure. As mentioned in the standard DRF scenario, investing in an unsuccessful transaction injects expenditures into a successful transaction, reducing a transaction fee. In a standard DRF, successful transactions are those investments in which a state occurs at a determined time 3 50, and those unsuccessful transactions are those investments that did not occur. The above example 3 · 1 · 2 1 illustrates a preferred embodiment in which a standard D R F is different in a group D B A R or a right group. As shown in FIG. 3, in a preferred embodiment, the result of step 360 is provided to the trader by logging in to the results of all transaction periods to displaying 3700. In a preferred embodiment not described, the trader's account is continuously updated to reflect these results. Figure 4 provides a more detailed description of the data storage device 260 in a preferred embodiment, which is a D B A R or a parent switch. In a preferred embodiment, after the relevant database software has been installed as described above, the data storage device 260 is a non-volatile hard disk data storage system that includes a separate device or medium. Or distributed to several physical devices, such as a group of workstation computers that operate related database software as described above. In a preferred embodiment, the paper size used in the data storage applies to the Chinese National Standard (CNS) A4 specification (210 X 297 mm) 194 --- — — — — — — ^ --— — — — — -(Please read the notes on the back before filling out this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 B7 V. Description of the invention (192) The relevant database software for device 2 6 0 contains the relevant database desktop , Storage steps, and other database entities and objects typically included in related database software packages. As shown in Figure 4, in the preferred embodiment, the databases 2 6 1-2 6 7 each contain such desktops and other related database entities and objects that are necessary or intended to assist the embodiments of the present invention. Figure 4 confirms that this information can be stored on this device. Of course, this kind of information on the map is not exhaustive. The storage of other data in the same or additional databases may be useful, depending on the transaction or the right group. In addition, as shown in FIG. 4 in the preferred embodiment, the specific data in FIG. 4 is stored in more than one device. In other different preferred embodiments, this data can be stored in only one such device or it can be calculated. The design and architecture of other databases will be familiar to those skilled in the art. As shown in Figure 4, in the preferred embodiment, the trader and account database 261 stores data related to the confirmation of a group of D BAR traders such as name, password, address, and trader confirmation number. The information related to the trader's credit can also be stored and updated according to the trader's credit situation. Other information that can be stored in the trader and account database 2 61 includes, for example, active or non-active investments, trader balances, trader margin restrictions, 尙 unpaid margin accounts, payments to 尙 unpaid transactions Interest and marginal balances of the balance, any restrictions that a trader cares about entering his account, and information about the trader's active or non-active investment profit or loss. Information related to multiple investments to be allocated can also be stored in the Trader and Account Database 2 6 1. For example, the paper size stored in the trader and account book applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -195-------- I ---------- I — Order I ------ 1-- (Please read the notes on the back before filling out this page) 473630 Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7 V. Invention Description (193) Household Database 2 6 1 The information can be used to issue account-related reports to traders. As shown in Figure 4, in the preferred embodiment, the market profit database 262 contains active or inactive DBA R or contingent rights groups, which can be used at different times. In a preferred embodiment, each contingent group in the database 2 6 2 is confirmed by a unique validator previously assigned to this group. For each group of contingent rights, the profit of each state response is stored in the database 2 6 2. Calculated during a given trading period and can use the profit shown to the trader, each set of requirements and each status is stored in the database 2 6 2. At the end of each trading period, the final profit is calculated and stored in the market profit database 2 6 2. Marginal returns, as described earlier, can also be stored in the database 2 6 2. The data in the market profit database 2 6 2 may also include transactions. Traders, such as current and past profit-related information, and information used by a standard DRF to a group of DBARs or a group of rights to determine spending. . As shown in FIG. 4, in the preferred embodiment, the market profit database 263 stores data from the market data feeder 270. In a preferred embodiment, the market profit database 263 includes information related to what kind of contingent rights, groups, can be traded in a particular exchange. In this comparative example, real-time market data includes information such as real-time prices, benefits, indicator levels, and other similar information. In a preferred embodiment, the real-time animal feed from the profit database 2 63 of the towel farm is passed to traders to help them make investment decisions, and this paper standard applies Chinese national standards. (CNS) A4 specifications (210 X 297 mm) -196- --------------------- Order • — — — — — — — (Please read the back first Please pay attention to this page, please fill in this page) Printed by the Intellectual Property Bureau of the Ministry of Economic Affairs, Consumer Cooperatives, 4736, A7, B7 V. Description of Invention (194) DRF is used to distribute the profit of the contingent group depending on this information. Data on the history associated with D B A R or the right group can also be stored in the market profit database 263. In a preferred embodiment, new conditions related to a potential DBA R or entitlement group (e.g., comments from the Federal Reserve Bank) may be stored in the market profit database 263, or may be read by traders. As shown in Figure 4, in the preferred embodiment, the event data database 264 stores data related to events that are potential DBA or rights groups that can be traded in an exchange. In a preferred embodiment, each event is confirmed by a previously assigned event confirmation number. Each event has one or more D B A R or contingent groups based on the event's association and is confirmed by a previously assigned event confirmation number. This kind of event can also be stored in the event database 2 64, for example, whether the event is based on the closing price of a bond, an announcement of a company's surplus, a calculation that has not previously been counted, etc. The data source used to determine the outcome of the event can also be stored in the event database 2 6 4. After knowing the result of the event, it can also be stored in the event database 2 6 4 together with the limited status of the individual or right group corresponding to the result. As shown in Figure 4, in a preferred embodiment, the risk database 265 stores and generates and analyzes data related to market risk and credit risk measurement and calculation. In a preferred embodiment, the risk database 265 associates the derived results with the account confirmation number. The amount of market risk and credit risk that can be stored are those related to the calculation of CAR and CCAR, such as the standard deviation of the profit per unit of each state, and the standard of this paper per yuan per state. China National Standard (CNS) A4 Specification (210 X 297 mm) -197-(Please read the precautions on the back before filling this page) 'Installation -------- Order -------- -Line 473680 A7 B7 V. Description of the invention 〇95) Standard deviation, the standard deviation of the profit per dollar for a given set of contingent rights, and the CAR portfolio. Data such as those used for CAR and C CAR calculations based on v A R and moderate measurements and simulations used for MC S based calculations can also be stored in the risk database 2 6 5. As shown in Figure 4, in the preferred embodiment, the transaction book database 2 6 6 contains the active and non-active investments related to the trader's right to all DBAR or right groups that can be traded in special exchange investments. data. This information may include a previously designated trader confirmation number, a previously designated investment confirmation number, a previously designated account confirmation number, a previously designated or entitlement group confirmation number, a status confirmation number previously specified under each limited status, and each investment Time, units used for investment (for example, US dollars), the amount of investment, how much margin is used to invest, and the confirmation number during the previously specified transaction. In addition, information related to whether an investment is a multi-state investment can also be stored. Expenditure distributions that traders want to replicate and which will be aided by a multi-state investment allocation can also be stored in the transaction log database 2 6 6. As shown in Figure 4, in the preferred embodiment, the terms and conditions of the contingent rights group. The database 2 6 7 stores the data related to the definition and structure of each contingent group of D B A R. In a preferred embodiment, such materials are referred to as "terms and conditions" to indicate that they are related to the terms and conditions of the contract, subject to the consent of the trader, and are related to the content of the traditional market prospectus. Consistent. In a preferred embodiment, the terms and conditions provide basic information about the group of contingent rights to be traded, for example, this paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) during the transaction- 198 · (Please read the notes on the back before filling out this page) Loading -------- Order --------- Line of Intellectual Property Bureau of the Ministry of Economy Employee Cooperatives Printed by the Intellectual Property Bureau of the Ministry of Economic Affairs Printed by the employee consumer cooperative 473680 A7 B7 V. Description of the invention (196) number, transaction start and end time, types of potential contingent group events, how DRF can inject funds from unsuccessful investment to successful investment, and decide for The time at which the event will be observed, other previously determined termination criteria, the range of states that can be invested, and the unit of the investment and expenditure price (for example, yuan, number of shares, a few ounces of gold, etc.) In the embodiment, the contingent rights group and the event confirmation number are designated and stored in the contingent rights group term and condition database 2 6 7 so that they can be easily referenced to other data storage Desktop opposed.

Figure 5 is a flowchart describing the process used and the decisions a trader makes using a preferred embodiment of the invention. To illustrate the reason for Figure 5, suppose the trader invests in an example of the D B A R range derivative (R D) that was not disclosed above. In particular, for the sake of illustration, suppose that D B A R R D. The investment is made in a contingent group based on the closing price of I B M common shares at 8/3/9 9 (as shown in Figure 6 501). As shown in Figure 5, 401, the trader requests to enter the D BAR or the right group transaction. As previously described in a preferred embodiment, the software application server 2 1 0 (see Figure 2) processes this request and follows the path to ORB 2 3 0, which exemplifies an object in a transaction server in a transaction 2 40 is responsible for the identification of the trader. This confirmation object on the transaction server 2 40, for example, asks the trader and the account database 2 6 1 (as shown in Figure 4), the trader uses the name, password, and other information to provide confirmation. As shown in Figure 5 402, the response of the confirmation object may be to allow or deny entry. If the confirmation fails here, step 4 0 3 prompts that the paper size should be in accordance with the Chinese National Standard (CNS) A4 (210 X 297 mm) 199- (Please read the precautions on the back before filling this page) · 1111111 — — — — — — — — — Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473660 A7 _ B7 V. Description of Invention (197) The reseller will re-enter or create a valid certificate to log in to this system. If the trader is allowed to enter the system, the software application server 2 10 (Figure 2) will display an interface that many users of the trader may be interested in. For example, in a preferred embodiment, a trader may browse through an exemplary example of a DBA R or a rights group that has already been traded, as shown in step 4 0 4. Traders can simultaneously check the current market conditions and store them in the market database by requesting these interfaces that contain the market data obtained from the current market data feeder 2 70 (see Figure 2) in step 400. 2 6 3 (Figure 4). Step 5 in Figure 5 indicates that the trader requests the software application server 2 1 0 for information related to the trader's account, such as the trader's current investment portfolio, the margin amount currently outstanding, and the account balance. In a preferred embodiment, this information is executed by the object on the transaction server 2 40 (see Figure 2) to query the trader and the account database 2 6 · 1 and the transaction note book database 2 6 6 (such as Figure 4). As shown in Figure 5, step 4 7 represents a trader's choice in a group D B A R or a right group in order to make an investment. The software application server 210 (see Figure 2) can present the trader interface to the trader, as shown in the interface in Figure 6. Step 408 represents the trader's request for information and analysis, which may include the effects of the trader's suggested investment on current profits. This calculation can be obtained by using the above-mentioned implicit "buying price" and "selling price" demand response equations. In a preferred embodiment, the process of performing these data requests and the operation of such data is a process in which the object is executed on the transaction server 240 (see FIG. 2). For example, these articles from the database are sized to the Chinese National Standard (CNS) A4 (210 X 297 mm) -200--------^ * — — — — — 1 — (Please read first Note on the back, please fill out this page again) 473630 Printed A7 by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs ______ Β7 _____ V. Description of the invention (98) 2 6 2 (Figure 4), by issuing a Requests from the rights group to obtain information on a cross-border distribution of investment amounts during a given transaction. With the information on the investment amount, other objects executed on the transaction server 240 (see Figure 2) can use the above-mentioned or right-group D R F to perform the marginal profit calculation. This process is an object managed by ORB 230 (see Figure 2). Returning to Figure 5, step 4 1 1 represents a trader's decision to invest in a given amount in one or more defined states of interest D B A R or a set of rights. In a preferred embodiment, the trader makes an investment request confirming a particular request group, the status of the investment to be invested, the amount of investment in the status, and, if any, the amount of investment profits used. Step 4 1 1 reflects the amount of margin required for any investment. The use of margin represents the risk that the transaction may not be able to collect the entire amount of the losing investment. Therefore, in a preferred embodiment, an analysis is performed to determine the amount of risk that a parent's risk of being exposed to a loan or amount of money is guaranteed. Step 4 1 3 This analysis is implemented in response to a margin request by the trader. The proposed transaction under consideration may have the effect of hedging or reducing the total amount of portfolio risk associated with the trader-investment activity in DBA or contingent group activities. Therefore, in a preferred embodiment, the proposed transaction and the amount of margin should include the analysis of the trader's portfolio in a C A R. In a preferred embodiment, as shown in Figure 5, by the steps, the paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -201-(Please read the precautions on the back before filling This page) 1111111 Order -—— — — — — — — — 473680 A7 V. Description of the invention (199 413 CAR analysis can be used in the risk database according to the aforementioned VAR, MCS, or HS methods (see Figure 2) The stored data is guided by the relevance of state profit and the relevance of previous events. The data stored in the risk database 265 is used as the relevance of state profit and the relevance of previous events. In a preferred embodiment, the result of the CAR calculation is also stored in the risk database 265. As shown in Fig. 5, step 4 1 4 is obtained by comparing the CAR obtained and compared with the marginal rule of exchange. The property rights of the trader determine whether the trader has sufficient equity capital in his account. In the preferred embodiment, the exchange requires all traders to maintain a property value equal to a part or several times of their investment portfolio. For example, assuming that the calculated CAR has 95% confidence as described above, the transaction may require the trader to have ten times the CAR in his account. This requirement may represent that the trader may bear 10% The reduction of property rights can be regarded as a reasonable transaction between extending the benefits of the liquidity margin of the trader and the risks and costs that the trader cannot perform. In addition, in a preferred embodiment, this exchange is The calculation of the CCAR can be completed to determine the amount of credit risk for each trader because of the DBAR or the right group. In a preferred embodiment, if a trader does not have the proper property rights in his account, or If the credit risk of the trader login is too large, the margin requirement will be rejected, as shown in step 4 32. Figure 5 further describes that if the trader does not have a margin requirement, or the trader passes the test of step 4 1 4 Step 4 1 5 Determine whether this investment will become a multi-state investment. Copy what a trader wants (please read the note on the back before you (Fill in this page) Packing ------- --------- Printed paper standard for employees' cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs, Paper Standard Applicable to China National Standard (CNS) A4 (210 X 297 mm) ) 202- Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473660 A7 __B7 V. Description of the invention ¢ 00) The distribution of expenditures in these states is required. If it is a multi-state investment, step 460 requires the parent to enter a desired expenditure distribution. This call will include, for example, a list of the constituent states and the expected expenditure for the event to occur in each state. For example, for a DB AR or entitlement group with four states, a trader may hand over a four-dimensional vector (1 0 '0, 5, 2), which states that the trader wants to copy one when state 1 occurs. 10 units of expenditure (for example, US dollars), no expenditure when state 2 occurs, 5 units when state 3 occurs, and 2 units expenditure when state occurs. In a preferred embodiment, this information is stored in the transaction log database 266 (see Figure 4), where it can be used to determine the state to be allocated to the composition, in order to replicate the expected investment amount of the investment Exploited. As shown in Figure 5, if it is a multi-state investment, steps 4 1 7 make a temporary proposal for the amount of investment to each constituent state. Figure 5 further describes the details and information of the investment (for example, contingent rights, investment amount, selected status, margin amount, temporary allocation, etc.) and then displays it to the trader for confirmation by step 4 1 6. Step 4 1 8 Indicate whether the trader's decision is to invest as shown. If the trader does not make an investment, it will not be executed by step 4 19. If the trader decides to make an investment, and step 4 2 0 determines that it is not a multi-state investment, the investment is executed and the trader's investment amount is disciplined to the relevant defined DBAR or restricted group of rights, according to the previous Accepted details. In a preferred embodiment, the transaction note book database 2 6 6 (see Figure 4) is followed by step 4 2 1 with new investment information to update the paper size to the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -203 · ^ -----— II ^ ----- I 111 ί (Please read the precautions on the back before filling this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473630 A7 _____ B7 V. Description of the invention ¢ 01) The new ones are like trader identification, transaction identification, account confirmation, investment status, investment time, investment amount, or contingent group confirmation. Figure 5 describes the description. If the trader decides to invest, 4 2 0 decides that it is a multi-state investment, step 4 2 3 allocates this investment amount to the investment amount that contains multiple states to generate before and step 4 6 0 The status of the composition of the information exchanged and stored in the transaction book database 2 6 6 (Figure 4). For example, in a preferred embodiment, if the expected expenditure is the same regardless of which state occurs in all states, step 4 2 3 will update the input of a suspended account and use the previous investment in the constituent states. Multi-state transactions are allocated in proportion. For example, given a previously stored expenditure distribution, the total amount of investment to be made, and the "new" investment to be made in the composition state, the amount of investment in each composition state can be provided using Example 3 · 1 · 2 1 Matrix formula to calculate. Because these calculations depend on the distribution of amounts that already exist during the transaction and at the end of the transaction, in a preferred embodiment, redistribution will be performed whenever the investment amount changes (and therefore the profit changes). Figure 5 further describes that in response to a new investment, step 4 2 2 updates the profit for each state to reflect the distribution of the new investment amount across the relevant DBA R or state with a rights group limitation. -In particular, if it is not a multi-state investment, step 4 2 2 receives new transaction information from the transaction log database 2 6 6 when step 4 2 1 updates the information. If it is a multi-state investment, step 4 2 2 When the account is updated in step 4 2 3, new transaction information is received from the trader account database 2 6 1. Step 4 2 2 is related to the Chinese standard (CNS) A4 (210 X 297 mm) of this paper size -204--------------ί (Please read the precautions on the back before (Fill in this page) 4736 7 A7 B7 V. Description of the invention 2) ORB 2 3 0 (as shown in Figure 2) explains an object on the transaction server 2 40 for calculating the profit of a new transaction. In this description, the objects are suspended from the transaction note book database 2 6 6 or the trader account database 2 6 1 (see Figure 4), and the account is asked for new transaction information, and DRF is used to calculate the DBAR or the right group. And update the profit stored in the market profit database 2 6 2 during the trading period. As shown in Figure 5, if a multi-state investment is determined through step 450, the transaction will continue to update the suspension account to reflect the expected expenditure distribution of the trader in response to the next incoming exchange investment. Any profit updated in the trading period obtained from step 4 2 2 and stored in the market profit database 2 6 2 is used by step 4 2 3 to perform a multi-state investment redistribution to reflect the updated profit. If it is determined in step 4 5 2 that the transaction period is not over, the reallocated amount obtained from step 4 2 3 is used with the information and then stored together in the transaction memo database 2 6 6 (see Figure 4). As shown in Figure 5, each step 4 2 2 performs a further profit update during the trading period. However, if step 4 5 2 determines that the trading period has ended, step 4 2 5 performs multiple state redistribution so that the profit during the transaction can be obtained at the end of each step 4 2 6. In a preferred embodiment, the end of the trading period is an important point, because at this time the final profit is calculated on the DRF object being executed by the transaction server 24 (see Figure 2), and these final profits are used Update the market profit database 2 6 2 as shown in step 5 4 6 in Figure 5. The final profit is those expenditures that are used to calculate the results of the construction. Therefore, this paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -205-(Please read the precautions on the back before (Fill in this page) Pack — — — — — — Order ------- I · Printed by the Consumer Property Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 _ B7 Correction 3) The state of occurrence to confirm and the previously determined termination conditions have been fulfilled. Even if a multi-state redistribution step 4 2 5 is between steps 4 5 2 and 4 2 6, it is marked in Figure 5. If it is not a multi-state redistribution, the multi-state redistribution step 4 2 5 will not be Implemented. Continuing the description of Figure 5, steps 4 2 7 represent the possibility that the same event will exist during the next transaction according to a given DBA R or right group. If such a period exists, the trader can invest during this period, and each subsequent trading period may have its own and other different final profit groups. For example, a group of contingent traders may place a hedge investment in one or more of the following trading periods to reflect changes in profits across the trading period according to the example 3 · 1 · 19 method described above. . The ability to place safe-haven investments during continuous trading allows traders to determine or understand the nature of profits and losses in continuous time, when profits change throughout the trading period. In a preferred embodiment, several steps represented by steps 4 2 7 are performed in the previously described part of FIG. 5. Figure 5 further describes that steps 4 2 8 mark the end of all transaction periods for a group of DBAR or entitlement groups. In a preferred embodiment, at the end of the last trading period, the market profit database 2 6 2 (see Figure 4) contains a set of pairs of contingent rights for the final profit of each trading period, and the transaction notes The book database 2 6 6 contains information about each investment made by the trader in the DBAR or right group described. In Figure 5, step 4 2 9 indicates the current observation period during which the result of the contingent event was observed, in which the DBAR or contingent group occurred. The paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm). ) -206-— I — I — — — — — — — Is · 1111111 ^ · 11111111. 5 (Please read the notes on the back before filling out this page) 473680 A7 _ B7 V. Description of the invention ㈤4) (Please read first Note on the reverse side and then fill out this page) to obtain, and any other conditions previously terminated have been fulfilled. In a preferred embodiment, the result of the event has been learned through an inquiry from the market data database 263 (see Figure 4), which is currently stored by the market data feeder 270. For example, for an event with a group of contingent rights at the closing price of § / 3/99 IB Μ, the market information database 2 6 3 will contain this closing price, 1 1 9 3/8 as if from the event database The source of the specific event data in 2 6 4 is the same. The source of the event data may be Bloomberg. In this case, an object previously placed on the trading server 2 40 as illustrated by OB 2 3 0 will update the market profit database with the closing price from Bloomberg 2 6 2 . Another example illustrates that an object placed on the transaction server 2 4 0 will query the market profit database 2 6 2 for the result of the event (119 3/8), and will determine the result corresponding to the event (for example, 'or 有 fe 利 # 1 4 5 8 '状 ％% # 8) For the purpose of status confirmation, query the contingent terms and conditions database 2 6 7 and update the results of the event and status to the event database 2 6 4. The Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs prints the graph 5 for further description. Step 4 3 0 indicates that the transaction server 240 uses 0RB 2 3 0 according to the DRF and contingent terms and conditions database 2 6 7 pairs. Illustrative items for a given or entitlement group completed expenditure calculation. In a preferred embodiment, this object is responsible for the amount calculated for the investment that is about to be paid for and the amount that has never been gathered for the unsuccessful investment, that is, the state where the investment is occurring and not happening, respectively. Figure 5 is further described. Step 4 3 1 indicates that the paper is stored in the trader and the paper size is in accordance with the Chinese National Standard (CNS) A4 (210 X 297 mm) -207-473630. Printed by the Consumer Cooperative of Intellectual Property Bureau of the Ministry of Economic Affairs Α7 Β7 V. Description of the invention e05) The account information of the account database 2 6 1 (as shown in Figure 4) is updated with the items determined for payment in step 4 30. In addition, in step 431 of this description and the preferred embodiment, the unpaid liabilities and receivables corresponding to the positive and surplus balances are applied to the database of traders and accounts 2 6 1 related accounts. Figure 6 depicts a sample Η TM L web page in a preferred embodiment used by a trader in DB AR or an exchange with a rights group 'which illustrates an associated input / output device such as a display button 5 0 4 to 507, the sample shows 500. As shown in Figure 6, the described data 501 describes the basic investment and market information related to an investment. In the description of the investment in Figure 6, the event is the closing price of the I BM common stock at 4 PM on 8/3/9. As shown in Figure 6, the Η T M L webpage of this sample shows the amount of investment in each limited state, and the profit available in the market profit database 2 6 2 in Figure 4. In this description and the preferred embodiment, for example, the profit is calculated at the transaction server 24 (see Figure 2) using a standard DRF. At the same time, as shown in Figure 6, the real-time market data is displayed as 503, using the data obtained by the market data feeder 2 710 in Figure 7, and the data through the trading server 2 4 0 in Figure 2. Processing is shown in a one-day "minimum change (or rise or fall) chart of prices". Market data can also be stored in the market data database 263 at the same time. In the preferred embodiment described in Figure 6, a trader can make an investment by selecting the key 5 0 4. The historical profit and time series data from the market database 2 3 3 can be viewed by selecting the display key 5 0 5 This paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) · 208 ---- I--IIIIII, · IIIIIII order · IIIIIII (Please read the precautions on the back before filling this page)

47368U Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7 V. Description of Invention ㊇6) Look. Tools for calculating open or indicative profit or simulating market event analysis can be used by requesting from software application server 2 10, via ORB 230 and transaction server 240 (Figure 2), by selecting Figure 6 The analysis key 5 0 6. When profits change over the course of a transaction, a trader may want to show how those transactions changed. As shown in Figure 6, these profits in one day or period can be obtained from the market profit database 2 62 by selecting the profit key 5 0 7 in one day. In addition, the profit in the marginal period as described above can be displayed using the same data in the market profit database 2 6 2 (see Figure 2). In a preferred embodiment, each trader may also come to watch the final profit from the market profit database 262. In the preferred embodiment that is not described, it is shown that 5 0 0 also contains available information from the contingent terms and conditions database 2 6 7 that confirms the contingent rights group (such as the type and event of the request). , Or the current profit available from the market profit database 2 6 2 (see Figure 2). In other preferred embodiments, displaying 5 0 0 includes a tool that requests services that other traders may be interested in, such as, for example, by calculating the profit margin of 5 7 in a day, or by selecting Display the key 5 0 5 to view historical data. Figure 7 depicts a more detailed and preferred embodiment of the market data feeder 270 of Figure 2. In the preferred embodiment in FIG. 7, the real time data feeder 600 includes a quote of prices, a profit, a chart of changes in a day, and a source of related market news and examples. The historical data feeder 6 1 0 is used to provide historical data to the market data library. The paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -209-(Please read the back (Please fill in this page again)

· IIIIIII · I ----- I Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 ---- B7 V. Description of the invention 7) 2 6 3. Explain the source of market time series data examples and the right to choose The price can be calculated from the calculated profit and insurance claims. The enterprise behavior data feeder 6 2 0 described in FIG. 7 illustrates the types of discontinuous business-related data (eg, earnings announcements, credit downgrades) and their ability to form a set of DBARs or rights in the present invention for transactions. Example source for group basis. In the preferred embodiment, the functions listed in step 6 3 0 are assisted in the transaction server 2 4 0 (see Figure 2), which obtains these from the data feeders 600, 6 10, and 620. Information is used to distribute profits, simulate results, calculate risks, and determine the outcome of events. Figure 8 depicts a preferred embodiment of an illustrative graph depicting the effects of implied liquidity invested in a group of DBA or entitlement groups. As discussed above, in the preferred embodiment of the present invention, the degree of change in liquidity within a group of DBARs or rights groups, if any, will be added to the trader rarely, Because only the final or closing profit during the trading period is related to the profit of the trader. This is the case with the traditional financial market, where local liquidity changes may lead to the execution of transactions on prices that do not fairly represent the general basic price, and may therefore impose permanent costs on the easier ones. Significantly different. As shown in Figure 8, the effects of liquidity of an investment in a DBAR or entitlement group include these when an investment actually and permanently affects the occurrence of cross-state distribution. For example, 'If an investor invests a sum of a considerable proportion of the previous investment in this state before the end of the trading period, the profit may substantially and permanently affect the application of Chinese national standards on this paper scale ( CNS) A4 specification (210 X 297 mm) -210-I 1-I II I I-^ · III 1 I I-^ Please read the notes on the back before filling out this page) 4736〇0 Ministry of Economy Printed by A7 B7 of the Intellectual Property Bureau's Consumer Cooperatives V. Description of Invention (208) The investment of a trader. The curve described in Figure 8 shows that in the preferred embodiment, the maximum effect that a trader may have in the distribution of profits in D B A R or the right group to different states. As shown in Figure 8, the horizontal axis, P, is the amount invested by the trader as a percentage of the total investment in this state (this transaction may be a multi-state investment, but it is assumed here to be a single-state investment). The range of the horizontal axis price 描述 described in Fig. 8 has a minimum 値 of 0 (without any investment) to 10% of the total investment amount in this particular state. For example, suppose the total investment in a given state is $ 100 million. The horizontal axis depicted in Figure 8 ranges from 0 to $ 10 million. The vertical axis described in Figure 8 represents the implied bid / ask price ratio, an extension of the implied probability in the state, with a new investment. In a preferred embodiment, the implied bid / ask price extension is a response between the implied “bid” demand, Q ◦ i (Δ τ i), and the implied “bid” Demand response, QB: (△ T i), is calculated. In other words, 値 along the vertical axis in Fig. 8 is defined by the following ratio: As shown in the graph of Fig. 8, this ratio 不同 uses three different standards Q i, and three lines corresponding to this standard are Range drawn to P 値: This ratio 假设 is assuming a small implicit 假设 Q as shown in the figure: (Q ^ = 0 · 0 9 1, represented by the line labeled S (P, 1)), a The implied 値 Q in (, Q = 0 · 3 3 3, represented by the line marked S (p, m)), the Chinese National Standard (CNS) A4 specification (210 X 297 mm) applies to this paper size _ 211 _ III — I — — — — — — — — III l · III ^ «— — — — — — I— S. (Please read the notes on the back before filling out this page) 473680 A7 B7 V. Invention The description (209) and a high implicit 値 Qi (Qi ^ O · 833, represented by the line labeled S (p, h)) are calculated. (Please read the notes on the back before filling this page) If a trader invests in a set of DBAR of the present invention or has the right, and kerosene has enough time remaining to adjust the profit to the general price during the transaction, then Figure 8 Provides a graphical narrative of the percentage of the implied state probability that a trader's investment has the greatest effect on the distribution of the implied state probability. The three drawn curves correspond to a high demand and a high implicit probability (S (p, h)), a moderate demand and a moderate hidden probability (S (p, m)), a low demand and a low hidden probability Probability (S (p, 1)). As used herein, the term “demand” means the amount of previous investment in a particular state. The graph described in Figure 8 illustrates the extent to which a trader's investment amount affects the existence of the implied probability distribution (and therefore also the profit), which changes not only because of the amount of state demand, but also because of trader investment. If the distribution of the implied state probabilities is greatly affected, this reflects a large bid / ask price gap, as shown in the graph of the vertical axis of Figure 8. For example, for a given investment amount P, expressed as a percentage of the demand for a special state printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs, the effect of the new investment amount is greater when the state demand is minimal (The line S (p, 1) 'corresponds to a low demand / low implied probability state). On the contrary, the effect of the new investment amount is minimal when the existing state demand is the largest (line S (p, h), corresponding to a high demand / high implicit probability state). In the preferred embodiment, Figure 8 simultaneously confirms the criteria for the requirements of all existence states, and the impact of new investment on the distribution of the probability of the existence of hidden states. This paper applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -212-473680 A7 ___ — _ B7 V. Description of the invention (21〇) will increase when the investment amount increases. Figure VIII illustrates both views of the D B A R contingent rights group related to liquidity of the present invention. First, compared with the traditional market, in a preferred embodiment of the present invention, the influence of the distribution of the probability of a trader's existence of hidden states can be mathematically calculated and displayed to all traders. Second, as shown in Figure 8, the magnitude of this effect is very reasonable. For example, in the preferred embodiment of Fig. 8, a large range of investment amounts of several percentage points are required from a given state, and the effect of such investment amounts on the market is relatively small. If the market has time to make adjustments after the need for this investment to join a state, this effect in the market will be only temporary, and this because the investment of the trader may have no effect on the distribution of the implied state probability . Figure 8 uses vague assumptions to show that the market does not have time to adjust to a "worst case scenario" after this investment adds a state of demand. For a preferred embodiment of a set of DBAR or entitlement groups, Figures 9a to 9c illustrate the relationship between traders and credits, and how credit risk can be quantified, for example in step 4 1 3 of Figure 5. Figure 9a depicts the relationship between counterparties to a traditional exchange transaction, in which the counterparties have previously entered into a 10-year reciprocal credit that pays a semi-annual fixed exchange rate of 7.5%. The reciprocal credit transaction accepts one party 701 accepts a fixed interest rate and pays a floating interest rate 'and the payer 702 pays a fixed interest rate and accepts a floating interest rate. Assume a $ 100 million reciprocal credit transaction and the current market fixed exchange rate is 7.4%. According to the well-known software package, such as the Sunsard data system, this paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -213- (Please read the notes on the back before filling in this page) 丨 · IIIIIII 丨 — 丨 — — I-. Printed by the Intellectual Property Bureau of the Ministry of Economic Affairs and Consumer Cooperatives 473680 Intellectual Property Bureau of the Ministry of Economic Affairs Printed by employees' consumer cooperatives A7 B7 V. Description of the invention (211) The principle of the auxiliary reciprocal credit price, the accepting party 7 〇1 accepts a profit of $ 7 0 0, 0 0 0, and pays a $ 7 0 0, 0 0 Loss of 0. Therefore, the party receiving reciprocal credit 701 has a function exposed to the counterparty 702 paid to the transaction — a $ 700,000 credit risk function — because this arrangement relies on payer 702 to meet its obligations. Figure 9b depicts a preferred embodiment of a group of DBAR or entitlement groups and exchange effects. The relationship between traders and credits. A practical relationship is used to explain the relationship between all traders and between them . As shown in Figure 9b, each trader Cl, C2, C3, C4, and C5 has a set of DBAR or right groups, which have a limited status corresponding to a one-year 10-year reciprocal credit rate. Possible results range from S 1 to S 8-invest in one or more states. In this description, each trader has a credit related to the amount of investment exposed to every other trader. Risk, how much each investment is on the margin, the probability of each investment being successful at any point in time, What is the relevance of the credit quality of each other trader and the lending to all trader credit ratings. This information is easily available in the preferred embodiment of DBAR or the right to trade, for example, in the trader and account database 2 6 1 (Figure 2), and can be similar to Figure 9 c Table 7 2 The form of 0 is displayed to the trader, in which the marginal amount of the investment in each state is displayed to each trader. It is juxtaposed with the trader's evaluation. For example, as shown in Fig. 9c, a trader C1 with an AAA credit rating has an investment of $ 50,000 in the margin of state 7 and an investment of $ 100,000 in the margin of state 8. In a preferred embodiment, each paper size is in accordance with China National Standard (CNS) A4 (210 X 297 mm) -214-------------- installation · — — — — — — — Order --------- (Please read the notes on the back before writing this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 A7 ____ B7 V. Description of Invention (212 ) The amount of credit risk assumed by the trader, for example, the probability of changing the credit rating (including the probability of failure to perform) from the market database 2 6 3, the amount that can be recovered when the performance cannot be performed, The relevance of changes in credit ratings among traders and the information shown in Table 7 2 0 were determined. In order to illustrate this method of obtaining a set of DB AR or rights described in Figure 9c in the text, it is assumed that: (i) all traders C 1, C 2 'C 3, C 4, and C 5 have been A group of DBAR or rightful group investments with a correlation of 0.99; (ii) The total probability of failure to perform for traders C 1 to C 5 is (0 · 0 〇1, 〇. 〇〇3, 〇 · 0 0 7, 0 · 0 1, 0 · 0 2); (i 1 i) The implied probabilities of states s 1 to S 8 (as shown in Fig. 9C) are (0 · 〇75, 0 · 05, 0.1, 0.25, 0.2, 0.15 '0. 075' 0. 1). A * with these assumptions' calculation of the DBAR or the right set of approximate solutions for all traders in Figure 9c, can use VAR as described in steps (i) to (vi) to determine the risk Credit capital. Step (i) involves obtaining the amount of insurance money used in each transaction. For the purpose of this description, some data are assumed and shown in Figure 9c, and in a preferred embodiment, these data can be obtained from the trader and account database 2 61 and the machine memoir 2 6 6 get. Step (i i) involves obtaining information on the probability of failure to fulfill and 无法 the probability of the portion of the outstanding marginal loan recovering in the event of failure to perform. In a preferred embodiment, this information can be obtained from JP Morgan's credit paper, which applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -215- (Please read the precautions on the back before filling this page) &lt; · 1111111 ^ · 11111111, &lt;. 473680 AB7 Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs V. Invention Description (213) Obtained from the matrix database. In this description, it is assumed that the percentage that each trader can recover is zero, so if a trader fails to perform, the margin loan cannot be retrieved. Step (i 1 1) involves arranging the standard deviation of profits in proportion to the amount of investment, the probability that each trader cannot perform, and the percentage that cannot be recovered in the event of non-performance. In this description, these steps involve calculating the standard deviation of the profit per unit of state, and then multiplying this result by the probability that each trader cannot perform. In this description, using the implicit probabilities assumed in states 1 to 8, the standard deviation of the unit profit is (3.5118, 4.359, 3, 1.732, 2 '2.3805, 3.5118, 3). The profit of these units in this description is then arranged by proportion, each multiplied by (a) the marginal amount invested by each trader in each state, and (b) the opportunities that each trader cannot perform ^ Each produces the following diagram: SI S2 S3 S4 S5 S6 S7 S8 Cl'AAA 175.59 300 C2, AA 285.66 263.385 C3, AA 1400 999.81 C4, A 2598 2000 C5, A 7023.6 4359 4800 Step (iv) involves using from above The scaled 値 of the table, and the matrix C s containing the correlation between each pair of limited-state profits, calculate the credit capital at risk. As previously discussed, this step (this paper size applies the Chinese National Standard (CNS) A4 specification (210 x 297 mm) -216 _ — — — — — — — — — — — — — — 1111111 ^ &gt; III I ---- (Please read the notes on the back before filling this page) 473630 Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 0 0 0 0 0 0 0 0 0 0 0 0 0 0, U3 = 0 2598 0, u2 = 0 1400 2000 0 285.66 999.81 0 175.59 263.385 0 0 _ 300 _ 0 _ 0 _ 0 A7 Β7 V. Description of the invention (214) 1 V) is by first arranging each trader for each state in proportion. The permutations are aligned to a vector U as defined above, the dimension of which is equal to the number of states (in this example the dimension is equal to 8). For each trader, multiply U's transpose matrix before the correlation matrix Cs, and then multiply it by U. The square root 値 is the C C A R 値 adjusted for the correlation of each trader, which represents the amount of credit risk contributed by each trader. In the calculation of this bit, the correlation matrix C s has 8 rows and 8 columns, and the diagonal is 1, which is constructed using the foregoing method: 1 -0.65-0.95-0.164 -0.142 -0.12 -0.081-0.095 -0.065 1 -0.76 -0.132 — 0.115 -0.096 -0.065-0.076 -0.095 -0.76 1-0.192 -0.167 -0.14 -0.095-0.111 -0.164 -0.132 -0.192 1 -0.289-0.243 -0.164-0.192 -0.142 -0.115- 0.167 -0.289 1 -0.21 -0.142 -0.167 -0.12 -0.096 -0.14-0.243 -0.21 1 -0.12 -0.14 -0.081-0.065-0.095 -0.164 -0.142 -0.12 1-0.095 -0.095 -0.076 -0.111 -0.192 -0.167 -0.14-0.095 1 In this description, each vector of 5 traders is U i, U2, U3, U4, and U5, which are expressed as follows: 7023.6 '4359 4800 0 0 0 0 0 This paper scale applies to China Standard (CNS) A4 specification (210 X 297 mm) -217- ---- I--1111114¾ ^ · IIIIIII order 1111111 * ^ (Please read the precautions on the back before filling this page) 473680 A7 B7 V. Invention Explanation 05) Continue to this explanation by the method of step (iv), the calculation of five matrices can be Obtained by the following method: CCARi = p ^ Cs ^ Ui where i = 1, ..., 5. The left-hand side of the above equation is the credit capital at risk corresponding to each of the five traders. Then applying step (v) of the C C A R method to this example, the five C C A R 値 s can be arranged into a column vector as shown below:

VCCAR 332.9 364.58 1540.04 2783.22 8820.77 (Please read the notes on the back before writing this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs. Continue this step. ) Is constructed, which includes changes in the credit rating correlation between each pair of traders on a diagonal of 1 and off-diagonal. For this example, step (V i) involves forming W C C A R on the surface and multiplying it by w c c A R, and then taking the square root to obtain: — CCARt〇tal = ^^ CCAR * C (

CCAR vyCCAR The calculation results obtained in this description are as follows: This paper size applies the Chinese National Standard (CNS) A4 specification (210 x 297 mm) -213- I 7 4 3 6 A7 B7 V. Description of the invention (216)

CCAR

TOTAL 1 .9 .9 .9 .9 332.9 .9 1 .9 .9 .9 364.58 332.9 364.58 1540.04 2783.22 8820 · 77 * .9 · 9 1 · 9 .9 * 1540.04 = 13462 74 .9 .9 .9 1 .9 2783.22 .9 .9 .9 .9 1 8820.77 In other words, in this description, 'All and distributed profits in Figure 9c have a single CCAR 値 a standard economy of $ 1 4 6 2 · 7 4 The Ministry of Intellectual Property Bureau employee consumer cooperatives printed the standard deviation. As mentioned earlier, in the discussion of C C AR using the V A R method, this 値 can be multiplied by a 导出 derived by a method familiar with this technique to obtain a previously determined percentage of credit losses, which the trader believes will not exceed. For example, in this description, if a trader wants to know that with a 95% confidence that the loss will not exceed the amount, the standard deviation of a single CCAR 値 $ 1 3,462 · 74 will be 1 · 6 4 5, you will get $ 2 2, 1 4 6 · 2 1. A trader may also want to know how much credit risk other traders have. In a preferred embodiment, the aforementioned steps (1) to (V1) can be completed except for one or more traders. For example, in this description, the most risky trader measured by the amount of c C A R is trader C 5. The amount of credit risk due to C 1 to C 4 can be obtained by performing the matrix of step (v) above and inputting the calculation of C C A R of the trader C 5. For example, this would generate a $ 4,870 · 65 CCAR for traders C1 to C4. Fig. 10 depicts a preferred embodiment of a feedback process for the improvement of a system or transaction to assist the present invention. As shown in FIG. 10, in a preferred embodiment, the closing and -------- I ---------: ---- Order --------- (Please read the precautions on the back before 垆 1 "This page) This paper size is applicable to China National Standard (CNS) A4 (210 X 297 mm) -219- 473680 Ministry of Economic Affairs Printed by the Intellectual Property Bureau employee consumer cooperative A7 B7 V. Description of invention (217) Profit during the period and the market data obtained from the market data database 2 6 3 (Figure 1) 'is evaluated by step 9 10 in order to evaluate D Used for the efficiency and fairness of BAR transactions. A better measure of efficiency is whether the distribution of a true result corresponds to the distribution of the response in the final profit. The routine of the distribution test formula I, such as κ 1 m 〇g 〇r 〇v · S mir η fff test, is best performed at step 9 1 〇 to determine, by crossing a group of DBAR or have Whether the implied distribution of trading activities in the form of profit in the form of limited rights is significantly different from the actual distribution of the previous event results over time. In addition, in a preferred embodiment, the marginal profit is analyzed at the same time. At step 9 1 0 ', in order to determine whether a trader who invests later in the investment period makes a profit that is different from other traders. These “late traders”, for example, may have access to information not available to other earlier traders. The response is looking for the analysis from step 9 10, a system for trading and investing according to the present invention. In D B AR or the right group system, it can be modified to improve its efficiency and fairness. For example, if a "late invester" gets unusual profits, it means that this system may be operated unfairly ‘perhaps in transactions associated with traditional bond markets. Step 9 2 0 described in Fig. 10 represents a preferred embodiment of a back measurement, which randomizes the correct time at the end of a trading period in order to prevent the closing profit from being manipulated. For example, 'In a preferred embodiment, a transaction is announced on a particular date, and the end time of the transaction is between 2 and 4 points taken randomly. As described in Fig. 10, step 9 2 3 is a preferred embodiment of other processes for reducing market operation risks. Step 9 2 3 represents the change * — — — — — 111 — — — — * * 1111111 111111111 · ί Please read the precautions on the back before filling out this page) This paper size applies Chinese National Standard (CNS) A4 specifications (210 X 297 mm) -220- 473680 A7 B7 V. Description of the invention (? 18) (Please read the notes on the back before filling this page) Steps to change the result observation period or time. For example, 'not M stomach _ @ _ between observation results, but confirm the transaction within the + duansi stomach ^ 1 _ to be observed, for example, several hours, days, weeks (or any time) Range), and then use the average of the observations to determine the occurrence of a state ° As further described in Figure X, the response to step 9 10 'For example, these steps can be used in step 9 2 4 to modify the DRF s to encourage Traders make investments earlier during the trading period. For example, 'a DR can be modified to provide some increased profits to these "early" investment traders "and proportionally decrease to" late "investment traders. This incentive 'and other skills familiar with this technique can be reflected in the more complex DRF s 0 printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs. In a preferred embodiment of FIG. 10, respond to step 9 1 0, Step 9 2 1 represents the step of changing the assumption that the open profit is calculated in order to provide a good open profit during the trading period. For example, the result of step 9 10 may indicate that the trader's transaction has extremely exceeded the limit of the distribution associated with the true result. Of course, this has nothing to do with the problem, because the traders' expectations of possible future results may not reflect the risks that can be obtained from real data for intelligence or analysis. However, one of the skills of this technique is obviously that it may adjust the initial profit to provide a better measurement of the future state distribution, such as by adjusting the skew, kurtosis, or other distributed force distances. As described in FIG. 10, 'Step 9 2 2 illustrates the change of one or more D B A R or the entire structure of the right group. This countermeasure can be used on an ad hoc basis to respond to inefficient or unfair market operations. • 221-This paper uses China National Standard (CNS) A4 (210 X 297 mm) 473630 A7 ______B7 V. Description of the invention (? 19) (Please read the notes on the back before filling this page) For example ' For the DBAR or the right group of the present invention, step 9 2 2 may include the change of the number of transaction periods, the time of the transaction period, the duration of a group of D b AR or the right group, and the number and nature of the limited status distinctions to obtain a comparison. Good liquidity and less unfairness of market operations. The detailed description of the figures, and the figures themselves, are examples designed to provide and explain specific descriptions and preferred embodiments of the system and method of the present invention. The purpose is to make Ben invention can increase understanding and appreciation. The detailed description and figures are not intended to limit the scope of the embodiments of the present invention, nor are they a method for supplementing or implementing them. Rather, additional embodiments and equivalent embodiments within the scope of the invention are well known to those skilled in the art who review this description or practice the invention. 7 Advantages of the Preferred Embodiment This description proposes the principles, methods, and systems for providing transactions and investments in DBA or contingent groups, and the establishment and operation of such contingent groups markets and transactions. When the present invention is applied to derivatives and other contingent transactions and investments, its advantages include: Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs (1) Increased liquidity: According to the present invention, D BAR may have rights The investment in the group and the exchange is given increased liquidity for the following reasons: (i) Reduction of dynamic safe-haven investments by market players. In the preferred embodiment, the contingent who has the right to form a transaction or market aggregator does not need to hedge in the market. In this preferred embodiment, what is needed for a functioning or entitled market is a set of real-world events that can be observed and reflect the risks of financial and economic risks. For example, at any given price, the Chinese paper standard (CNS) A4 (210 X 297 mm) can be applied to this paper size -222-473680 A7 ___B7 V. Description of the invention (220) The quantity of any given financial product utilized , May not be related to the system of the present invention. (Please read the notes on the back before filling this page) (Π) Order confusion is reduced. Trading in traditional and electronic markets often uses complex calculations and limits buy / sell order mixing. In the preferred embodiment of the invention, there is no mix of buy / sell orders. A trader who wants to “unbundle” an investment will instead make a complementary investment, so he may hedge his exposure. (in) There is no permanent fixed circulation cost. In the D B A R market, only the final profit is used to calculate expenditure. In the preferred embodiment, the variability of liquidity and execution changes in the traditional market does not impose a fixed tax or fee as in the traditional market. The liquidity effect of investing in a D B A R or entitlement group amount is easily calculated and can be used by traders. Such information is not readily available in traditional markets. Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs (2) Reduction of credit risk: In a preferred embodiment of the present invention, this exchange or trader has greatly improved the confidence to regain transaction costs. In the preferred embodiment, the main function of the transaction is to redistribute the losses from unsuccessful investments to successful investment profits. This means that a trader using the present invention can enjoy limited liabilities and diversified credit risk of counterparties even in a short position. (3) Improvement of permutation: In the preferred embodiment of the system and method of the present invention, the price method for investing in DBA or the right group is not related to the number of financial product entities that were used before hedging investments. In a preferred embodiment, a transaction can therefore accommodate this paper at a lower marginal cost. Applicable to China National Standard (CNS) A4 (210 X 297 mm) -223 · 473680 Employees ’Cooperatives, Intellectual Property Bureau, Ministry of Economic Affairs Printing A7 B7 5. Invention Description (221) Many users. (4) ^ Improvement: According to the present invention, markets and transactions provide functions that effectively aggregate information related to investor needs, the probability implied by different results, and price. (5) Increase in transparency of each price J: In a preferred embodiment of the system and method of the present invention, for investments in DBA or the right group, it is possible to determine the profit as a function of the investment amount. In contrast, prices in traditional derivatives markets are usually only useful for fixed quantities, and are usually determined by the interaction of complex supply / demand and comprehensive liquidity conditions. For example, in a preferred embodiment of the present invention for a DBAR or a standard DRF with a right group, the profit for a particular state is based on the ratio of the total investment distributed across the state to the amount of the particular state. distributed. (6) Reduction of settlement or calculation costs: For investments in DBAR or the right group, in the preferred embodiment of the present system and method, a transaction is usually not required, nor is it necessary. Group-based processing of financial entities of underlying entities. Bonds and derivatives of these commodities do not need to be transferred, mortgaged, or specified by other transactions, so, in a preferred embodiment, it does not require the infrastructure for these back office offices. I. (7) Reduction of hedging costs: In the traditional derivatives market, the market makers constantly adjust their risk-exposed portfolios to reduce the risk of bankruptcy and achieve the maximum expected profit. Portfolio adjustments' or dynamic hedging are often very expensive. In the preferred embodiment of the system and method of the present invention, for the investment in DBAR or the right group, the unsuccessful paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -224---- ---------^ — — — — — — II ^-— 1 —-----. (Please read the notes on the back before filling out this page) 473680 Employee Consumer Cooperatives, Intellectual Property Bureau, Ministry of Economic Affairs Print A7 B7 V. Is the description of the invention 2) Investing is a hedge against successful investment. As a result, in this preferred embodiment, the need for a hedge by a transaction or market aggregator can be at least greatly reduced if it cannot be removed. (8) Reduction of model risk: In traditional markets, derivatives traders usually add a "model insurance" quoted to customers on the price, in order to avoid deviations from other model estimates that cannot be avoided. protection. In the present invention, the price of an investment in a limited state is directly derived from the expectations of other traders about the distribution of market profit expectations. As a result, in this embodiment, the evaluation of complicated derivatives is not necessary. Transaction costs are therefore reduced due to increased price transparency and the fortunateness provided by the system and method of the present invention. (9) Reduction of event risk: For investments in DBA or contingent groups, in the preferred embodiment of the system and method of the present invention, traders' expectations are induced by the distribution of the results of the entire future event. In this preferred embodiment, for example, the expectation of a market crash is directly observable from the indicated profit, which reveals the trader's expectations of the distribution of the outcome of an entire future event. In addition, in this preferred embodiment, a market aggregator or transaction is subject to a significantly reduced risk of market collapse or "crack" and the cost of the derivatives need not reflect the insurance premium of a discrete market. (10) Generation of attached price information: Traditional financial market transactions usually attach a proprietary interest to a byproduct derived from trading activities and the market, real time and historical data. This information includes, for example, quoted prices and quantities on the market. In the traditional market, the price is a "full statistic" for market participants. '' This paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -225-------- ----- I · I --- — II ^ «— — — — — 1 — 1 ^ (Please read the notes on the back before filling out this page) 473680 Printed by the Consumers’ Cooperative of Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7 V. Description of Invention ¢ 23) And this is the information most desired by the data skeptic. For investing in DBAR or the right group, in the preferred embodiment of the system and method of the present invention, the range of data generation may be greatly expanded to include traders, according to a set of DBAR or right group for individual future events Expectations of the entire distribution of possible outcomes. This kind of information (for example, the distribution at time t, reflecting the trader's expectations of a market crash at time t + 1) can be used to improve the operation of the market. At present, this distribution of information can only be obtained by collecting a list of option price information, at different prices for a given financial product, using the method published by economists Litzenberger and Breeden in 1978 and other familiarity. The method of this technique is very difficult to derive. Investors, etc. must then perform difficult calculations on this data and extract potential distributions. In a preferred embodiment of the invention, these distributions are directly available. (11) Expanding the market for contingent rights: Another advantage of the present invention is that it makes contingent rights a fully functional market. This type of market enables traders to directly hedge against events that are not easy or impossible to hedge in the traditional market, such as changes in mortgage loan payment indices and corporate earnings announcements. The operation of a contingent market for a system and method according to the present invention can basically cover all economically significant events of an insurance and hedging need. (12) Price discovery: For investments in DBA or contingent groups, another advantage in the preferred embodiment of the system and method of the present invention is the supply of a profit adjustment function ("price discovery"). In the traditional capital market, for the overall liquidity, a paper standard with a large amount of property status applies to the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -226------ -------- Installation ----------- Order ---------- Line (Please read the precautions on the back before filling out this page) Employee Consumer Cooperatives, Intellectual Property Bureau, Ministry of Economic Affairs Printing 4736, A7, B7 V. Invention Description (224) Traders usually cause a price discovery to the market due to a crisis of shock or failure in liquidity. For example, in the fall of 1998, long-term capital management (LTCM) was unable to reflect an irregular mass financial status of external credit markets, that is, Soviet Russia's obligations on some of its imminent liabilities Unable to fulfill. The risks to the system are not only creditors' who have come to LTCM, but also to others who have disappeared from the credit market in the circulation market. On the contrary, according to the present invention, in a preferred embodiment of the DBAR or the right group, the LTC M itself may have severely reduced the profit of the state investment in a set of DBAR or the right, and may become unstable, So reduce incentives to invest in larger investments in these same states. What's more, although a transaction on the D B A R or contingent group according to the present invention may still be operating at frequently adjusted profits, even at the peak of the Soviet Union's 1898 debt crisis. For example, if derivatives in the DBAR range exist that cause them to expect traders to spread across the spread between highly valued U.S. Treasury bonds and low-rated debt instruments, LTC M may be able to invest in derivatives in the DBAR range Among them, it may make a profit when the credit gap widens, and do a "hedging" of its speculative position in a low-rated debt instrument. Of course, its status must be quite large, which drives the extreme reduction of profits in this status (that is, with a small cost, effective circulation in the place where it exists). However, according to a transaction in the preferred embodiment of the present invention, it may have provided increased liquidity compared to the traditional market. (13) Improved provision of market surges: As described above, it is applicable according to this paper size China National Standard (CNS) A4 Specification (210 X 297 mm) -227-------------- Ju -------- Order --------- (Please read the notes on the back before filling out this page) 473680 Printed by the Consumer Property Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs A7 B7 V. Invention Description ¢ 25) The present invention is in a preferred embodiment of the DBAR or the right group Once an investment has been made, it can be offset by a ratio of the amount of the investment in the complementary state to the amount of the original investment. By not allowing all transactions to be proposed or cancelled, the preferred embodiment results in two advantages: 1 · Reduce strategic behavior ("profit shake") 2. Increase market liquidity In other words, the present invention is better The embodiment reduces the ability of traders to invest or make large investments, just to create false signals to other participants who want to make changes at the last minute of the close. In addition, in the preferred embodiment, the liquidity information of the market's entire state distribution can be easily provided to traders, and this liquidity, in the preferred embodiment, cannot be used during the trading period. Was removed. This preferred embodiment of the invention thus provides the market with a guarantee that the liquidity, which will not disappear, is a significant commitment to the market. / (14) Increase in recitation incentives: According to the system and method of the present invention, in a preferred embodiment of a transaction or investment in a DBAR or a rights group, incentives are created to provide the state distribution most needed Liquidity. On average, in the preferred embodiment, the implied probability obtained from the amount invested in a limited state should be related to the true probability of the state, so the limited state should be distributed across the true probability of each state To provide. Traditional markets do not have this ready-made function of self-balancing liquidity. In any case, the traditional market generally does not provide that transactions in accordance with the present invention can easily obtain a strong (analytic) relationship between liquidity, price, and probability in DBA R or the right group. This paper size applies to Chinese National Standard (CNS) A4 specifications (210 X 297 mm) -228 · III I --- — — — — — — — — — — — 11111111 C Please read the notes on the back first (Fill in this page again) 473630 A7

V. Explanation of the invention (? 26) (15) Improvement of self-coordination: The traditional market usually has a “no arbitrage” relationship such as option sale-purchase and interest rate and currency interest rate parity. These relationships must generally (yes) be established to prevent risk-free arbitrage or to provide a consistent check or benchmark on non-arbitrage prices. According to the system and method of the present invention, in a preferred embodiment of trading or investing in a DBAR or a rights group, in addition to this "no arbitrage" relationship, the probability of the implied probability under a limited state distribution Is equal to 1. Using the above-derived symbols, the following relationship is valid for a group of DBARs using a standard DRF: (1-/ ΡΣ7: r: = -1--1 Σ 仏 = 1 i. In other words, in In a preferred embodiment, the sum of a simple function across all the implied probabilities is equal to the sum of the investment amounts for each limited state divided by the total transaction amount. In such a preferred embodiment, the The sum is equal to 1. This internal consistency check is completely unequal to the traditional market where complex calculations need to be performed at the price of circulating options in order to restore the distribution of implicit probabilities. (16) Promotion of marginal profit calculation: According to the system and method of the present invention, in a preferred embodiment of trading or investing in a DBAR or a rights group, the marginal profit can be easily calculated at the same time. The marginal paper size applies the Chinese National Standard (CNS) A4 Specifications (210 X 297 mm) -229-(Please read the precautions on the back before filling out this page) • Equipment --- I!-Order ------ I line Cooperative printed 473680 Economy Printed by the Intellectual Property Bureau employee consumer cooperative A7 B7 V. The profit rm of invention description (227) is the profit that is popular in any period of a transaction period, and can be obtained as follows: rm /, BU l, i rp-rp where the left-hand side is the marginal profit for state 1 between time t-1 and t; r,, t is the unit profit for state 1 at time t and t-1 respectively, T i, t and T :! Is the investment amount at time t and t-1 in state 1. In a preferred embodiment, the marginal profit can be displayed to provide traders and others with the importance of adjusting during the entire trading period. Information. In the system and method of the present invention, the marginal profit may be more variable than the return applied to the entire trading period (depending on the size of the time increase within all other factors). (17) The decrease is due to Impact of market makers: In a preferred embodiment of the system and method of the present invention, because profit is driven by demand, 'if it cannot be deleted, the role of the market maker for this party is at least reduced. , One in tradition The market's typical market aggregator (like a NY SE expert or an exchange registrant) usually has privileges to access the information (eg, restricted appointment registrations), and may be in two roles, funds (ie 'exclusive transactions' Conflicts of interest) and market players. In a preferred embodiment of the present invention, all traders have more information (for example, the amount of investment across the entire state) and there is no supply-side Conflicts of interest. This paper size applies Chinese National Standard (CNS) A4 specifications (210 X 297 mm) 230- — — — — — — — — — — — — — — — — — — — — — III — — (Please read the notes on the back before filling this page) 473680 A7 _______ B7 V. Description of the invention P28) (1 8) Increase in production and distribution capacity of production and reproduction: According to the system and method of the present invention, In a preferred embodiment of a transaction or investment in a DBAR or entitlement group, traders can generate a distribution of their expected expenditures, that is, expenditures can be easily changed across the entire The amount of investment of the state is customized. This is very significant because D B A R or the right group can be used to easily replicate the distribution of expenditures as traders are familiar with traditional markets, such as long stock positions, long and short futures positions. As described above, in the preferred embodiment of the present invention, it is important that the distribution of expenditures reflecting such property status can be effectively performed with a DBAR or the right to perform multiple state allocations with minimal cost and difficulty. To copy. Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economics The preferred embodiment of the present invention has been described in detail above, and various changes and closures will be apparent to those skilled in the art. For example, many types of demand redistribution functions (DRFs) can be used to inject losses from unsuccessful investments into successful investments, so traders get different risks and returns. In addition, the disclosure of this disclosure has primarily discussed the D B A R contingent group and portfolio, as well as the markets and trading systems and methods of these contingent groups. The system and method of the present invention can be easily adopted by financial intermediaries for use in traditional capital and insurance markets. For example, a group of DBA R may have the right to be brought into a traditional bond market, such as corporate debt to a given company 'or the insurance industry as described above. Embodiments such as this and equivalent examples are intentionally placed within the scope of the patent application of the present invention and the appendix. The transaction of derivative bonds described in the present invention as described above, in particular, this paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -231-Printed by the Consumers ’Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs 473630 A7 — B7 V. Explanation of the Invention (? 29) An electronic derivative transaction assists efficient transactions in (i) financially-related contingent rights, such as stocks, bonds, and derivatives thereof, (ii) ) Non-financial-related contingent rights, such as derivatives of energy, commodities, and climate, and (iii) traditional insurance and contracts in the insurance industry, such as guarantees of market losses for property-disaster risks. The present invention is not limited to these written descriptions, however, and can be easily adopted in any contingent rights with events that are currently uninsurable or unavoidable, such as announcements of company earnings, future semiconductor needs, And technological change. These and all other modifications are within the scope of the invention. 8 Technical appendix Financial products with demand-based, adjustable profit financial products and their commercial transactions. This technical appendix provides the mathematics implicit in the computer code listed in Figure 1: Visual Basic computer code used to solve CDRF2. basis. The computer code that is assisted by a better method of a common technique in the art mentioned above is the demand redistribution function (CDRF 2) of the standard solution. It is based on the application of a mathematical method called fixed-point iteration method. of. -As pointed out in the description above, this co-existing system embodied by CDRF 2 does not provide a very clear solution, and usually requires the use of mathematical methods to solve the secondary problems contained in the system. equation. Generally speaking, this system is usually solved by a so-called "lattice search" program such as the Newton-Raphson method. One of the initial solutions or the paper size applies the Chinese National Standard (CNS) A4 specification (210 X 297). Treasurer) «232 ^ &quot; — — — — — — — — — 111 — — — — — — — I— ^« — — — — — I— (Please read the notes on the back before filling this page) 473680 Member of the Intellectual Property Bureau of the Ministry of Economic Affairs, K Consumer Cooperative, printed A7 B7 5. Invention Description ¢ 30) The guessing of a set of solutions is improved by using information obtained from the outside of the derivative of the function 値 in a specific system. . An important advantage of the demand-based transaction method of the present invention is that it is prudent in constructing CDR F2, which makes the application of a fixed-point iterative method that provides cD R F 2-a solution of a number of units, a tool for solving. The fixed-point iteration method is generally more reliable and simpler than the method of grid search, such as the computer code table listed in Table 1. A · Fixed point iteration method C D R F 2 The solution needs to find a fixed point of a system equation. Fixed points represent their solutions, because they entangle the notion of a system at "stationary" or equilibrium, that is, a fixed point or transformation of a system of functions, expressed as g (a), and exists if «= g ( a) Mathematically, the function g (a) can be said to be a graph corresponding to the real number axis in domain 3. The graph, g (X), produces ~ new points' y on real numbers. If X is y, then X is called a fixed point of the function g (a-). As far as the technique of numerical calculation is concerned, if g (a) is a system of ~ non-linear equations, and if x is a fixed point of g (a), then a is also the point where the function is zero. If there is no point like X for the function g (a), the program of lattice finding type can be used to solve this system (such as Newton-Raphson method, secant method, etc.). However, the Zhang and Zhang scales apply the Chinese National Standard (CNS) A4 specification (210 X 297 mm) -233----------- I --- ---- ---- —---- II (Please read the notes on the back before filling this page) 473630 A7 B7__ V. Description of the invention) If a fixed point exists, its existence can be used as the zero point of the non-linear system, as described below . (Please read the notes on the back before filling out this page.) Select an initial point, X 〇, assuming we believe it is near the fixed point of the function g (a). Then suppose that the function g (a) does exist at a fixed point. Use the following simple iterative summary:

Xl + i = g (Xl), where XQ is chosen as the starting point where 1 = 1,…, η. Iteration can be continued until an expected accurate standard is obtained, ε, that is, ^ = § {ΧηΛηηΐί1 \ § {Χη-χ) ^ χη \ &lt; ^ Whether the fixed point will converge, of course, the key depends on the following figure The first-order derivative of the adjacent area of the function g (X) shown above depends on: Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs. Figure 1: Iterating the fixed point of the general function g (X). Upper left: Monotone convergence (0 &lt; dg / dx &lt; l) top right: critical (oscillation) convergence (-1 l &lt; dg / dx &lt; 〇)-bottom left: monotonic divergence (l &lt; dg / dx) top right: critical (oscillation) divergence (dg / dx &lt; — 1) As pointed out previously, one of the advantages of the present invention is that the CDRF 2 is constructed in such a way that it can be regarded as a multivariate, continuous and having a derivative function of 値 between 0 and 1. Function, g (X). This paper size applies to China National Standard (CNS) A4 (210 X 297 mm) -234-473680 A7 ___B7__ V. Description of the invention 2) B · When the fixed-point iteration method is applied to CDRF 2 (Please read the note on the back first Please fill in this page again.) This section explains (1) that the system equation applied to CDRF 2 has a fixed point and (2) using the fixed point iteration method in part A above, this fixed point solution can be found. The well-known fixed-point theory provides that if g ·· [a'b] · &gt; [a, b], continuous in the interval [a, b], differentiable in (a, b), and the existence of a The constant k &lt; l causes a single fixed point X * for all x | &lt;? at (a, b) in the interval [a, b]. In addition, for any X in the interval [a, b], the sequence X 0 = X and X η + 1 = g (χ η) converges to x * and is printed for all η employees ’cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 1-k This theory can be applied to c DRF 2 as follows. First of all, the amount involved in CDRF 2 in a preferred embodiment or the amount to be invested across the CDRF state distribution, given an expenditure distribution, by calculating the inverse of the CDRF ground expression, and then the transaction amount The paper size of the matrix applies to Chinese national standards (CNS> A4 specifications (21〇χ 297 public love) 473680 A7 B7 Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 5. Description of invention ㈡3) Solution of A: A = Ρ * Π ( A, f) .1 (CDRF2) Therefore, CDRF 2 can be rewritten into the following form: A = g (A) where the g dimension is a continuous, differentiable function. By the aforementioned fixed-point theory, 'CDRF 2 by Fixed point iteration method to solve if g (A) &lt; l

That is, the multivariate function g (A) has a derivative function less than 1. Whether the function g (A) has a derivative for A that is less than 1 can be analyzed as follows. As stated in this description, for any one trader and any given state1, CDRF 2 contains the following and expected expenditures P (assuming that 値 is greater than 0). The form of transaction amount α required to generate this expected expenditure Relevant equations, given a total transaction amount T 1 (also assumed to be greater than 0) that has been traded in the state 丨 and the total investment amount T for all states: This paper size applies Chinese National Standard (CNS) A4 specifications (210 X 297 mm) -236-I1II1I — — — — — — — IIIIIII. — — 111 — —-. &Lt; (Please read the notes on the back before filling out this page) 473630 A7 B7 V. Description of the invention (234) So that gg (a) z rT. ^ A KT)

Differentiate P with α to get g (^) z Γ-7; Γ + α

PT + a Because of the limitation of the DRF previously defined in the description 'requires that the amount of expenditure P does not exceed all the total transaction amount of the state, then the following conditions hold: and because Γ +-&lt; 1 I --------- — I-install i I--I--order --- — — — — —-line- &lt; Please read the notes on the back before filling this page) &lt; 1 Τ-Ί] \ T + aj Ministry of Economy Printed by the Intellectual Property Bureau's Consumer Cooperative, this case recognizes the following situation 0 &lt; g'W &lt; l so that the solution of c DRF 2 can be obtained by iterating the fixed point of the computer code in Table 1. This paper size applies to China National Standard (CNS) A4 (210 X 297 mm) -237-

Claims (1)

473680 B8 C8 D8 _ VI. Scope of Patent Application 1 · A method to guide demand-based transactions includes the following steps to establish a number of limited states and several previously determined termination criteria, each of which defines at least one significant state Possible consequences of economic events; 'acceptance of an investment in a price unit by each of a number of traders in at least a number of defined states before fulfilling all termination criteria; and allocating an expenditure to each investment to Reflect the total number of unit price investments in a limited number of states' The relative amount of investment per unit of price unit in a number of limited states, and the confirmation of a limited state when all finalized standard fulfillment occurs. .2-A method for guiding demand-based transactions includes the following steps to establish a number of defined states and a number of previously determined termination criteria, each of which corresponds to a possible state of a selected financial product When each of the termination standards is fulfilled; before fulfilling all the termination standards, accepting an investment in a price unit by each of a number of traders in at least a number of defined states; and allocating an expenditure to each investment , Reflecting the total quantity of unit price of investment in a limited number of states' Relative number of investments of each price unit in a number of limited states ® __ __- 23S ---- This paper applies Chinese national standards (CNS ) A4 size (210 X 297 mm)-丨! 1 !! · ^^ ·! I Order-! — 丨! -(Please read the precautions on the back before clicking this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs A8B8C8D8 473680 6. Scope of patent application and confirmation of limited status when all finalized standard implementations occur. 3. At least one of the investments in the patent application scope that guides demand-based transactions in the 1st or 2nd method is related to bond trading. 4. The first or second item of the patent application guides the demand-based transaction method, in which the expenditure of each investment in each limited state is zero in the event that all terminated standards are not fulfilled, And the sum of the expenditures to all states will not be greater than the price of the total number of price units invested in several limited states. 5. The fourth item of the patent application guides the demand-based transaction method, in which the sum of the price of all investments is equal to the price of the unit of all prices in the investment in a limited number of states, minus one fee. 6. In the patent application scope of item 1 or item 2, the demand-based transaction method, in which at least one price unit investment specifies a set of limited states and from the specified limited state set of one expected investment in the Profit, and the steps in which it is distributed further reflect the expected profit on the investment from a specified group of defined states. 7 · The first or second item of the patent application guides the demand-based transaction method, which further comprises the step of calculating the risk capital by investing in at least one trader and at least one price unit. 8 • Item 7 of the scope of patent application guides the demand-based transaction method, in which the calculation steps include the use of risk capital and risk price methods. This paper size applies to China National Standard (CNS) A4 specification (210 X 297 mm) ------------- Raid -------- Order ·! (Please read the precautions on the back before writing this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 2 ^ Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 473680 B8 C8 D8 VI. Patent Application 9 The seventh item in the scope guides the demand-based trading method, in which the calculation steps include the use of the Monte Carlo statistical test simulation experiment method of capital at risk. 1 〇 • The seventh item in the scope of patent application guides the demand-based transaction method ', in which the calculation steps include the use of capital historical data simulation experiments in a state of risk. 1 1 · In the patent application scope of item 1 or 2, the method of demand-based trading further comprises the step of calculating the credit capital of risk by investing in at least one trader and at least one price unit. 2 · Item 11 of the scope of patent application guides the demand-based transaction method, in which the calculation step includes the use of risk capital and risk price method. 1 3. The 11th item in the scope of patent application guides the demand-based trading method, in which the calculation steps include the use of the Monte Carlo statistical test simulation experiment method of capital at risk. 14. The guidance in item 11 of the scope of patent application in the demand-based trading method, wherein the calculation steps include the use of capital history data simulation experiments under risk. … 1 5 · In the application of the first or second item of the scope of patent application, a demand-based transaction method in which at least one price unit investment is a multi-state investment specifying a limited status and a sum. 1 6 · In the method of demand-based transactions in item 15 of the scope of patent application, at least one multi-state investment specifies an anti -______-- 240-- This paper standard is applicable to China National Standard (CNS) A4 Specifications (210 X 297 public love) — — — — 1 — — — — — — — — 111 — — — — 11111111 (Please read the precautions on the back before Jri "this page" 473680 A8 B8 C8 D8 Ministry of Economy Printed by the Intellectual Property Bureau Employees' Cooperative Cooperatives The paper size is applicable to the Chinese National Standard (CNS) A4 (210 X 297 mm) 6. The expected profit of the set of limited statuses that should be specified in the scope of patent application, and the distribution steps are further A collection that reflects expected profits. 1 7 · The 16th item in the patent application guides the demand-based transaction method, in which each expected profit of the set of expected profits is reflected in a second set of a set of specified limited states. 18. In the method of claim 16 of the scope of patent application, a demand-based transaction method is adopted in which the set of expected profits approximates the set of limited states of the previously designated investment instruments to reflect the expected profit. 19. The guidance for demand-based transactions in item 16 of the scope of patent application, wherein the step of allocating includes the step of calculating the value of the multi-state investment and the number of units required to specify a set of expected profits 0 2 〇 The 19th item of the patent application guides the demand-based transaction method, in which the step of allocating further includes the step of solving the equation set related to the transaction amount and unit expenditure and expenditure distribution at the same time. Item 20 of the patent application guides a demand-based transaction method in which the solution step includes a fixed-point iteration step. 2 2. The 21st item in the scope of patent application guides the demand-based trading method, wherein the steps of fixed-point iteration include the following steps: Select an equation of a set of simultaneous local equations, which has an independent variable and At least one phase variable; Specify any independent variable y of the equation selected by this 値 -------- 241- — — — — — — — — — — — — — — — — 111— ^ a — — — — — — — — (Please read the notes on the back before filling out this page) A8B8C8D8 473630 6. The scope of patent application is calculated in the selected equation 'corresponds to one of the currently specified independent variables値 of the independent variable; assigning the 値 of the independent variable calculated to the independent variable; assigning an equation of the set of simultaneous local programs to the selected equation: and the step of performing the calculation of the interval, the step of specifying the obtained interval, and The step of assigning the equations is until the 値 of each variable converges. 2 3 · A method for measuring the probability of a state in a demand-based transaction method, including the following steps: Execute a demand-based transaction method with a limited number of states and several previously determined termination criteria, each of which The limited status corresponds to at least one possible economically significant event, and the investment in the price unit of each of several traders is accepted by at least one of the limited statuses; monitoring of the investment in several limited statuses The number of each relative price unit; and the measurement response to the monitoring step, the probability that a selected limited state of a number of limited states will become a limited state when all termination standards are fulfilled. 0 2 4 The state-probability-based approach includes the following steps: Execute a demand-based transaction method with a number of qualifying states and a number of previously determined termination criteria, where each qualification is fulfilled when each termination criteria is fulfilled Status corresponds to one of a selected financial product This paper scale applicable Chinese National Standard (CNS) A4 size (210 X 297 mm) !!! 1 · · loaded ---- I-- book! !! !! (Please read the notes on the back before writing this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 242 A8B8C8D8 473680 6. The status of the scope of patent application, and the price of each of several traders 値Unit investment is accepted by at least one of a number of limited states; monitoring the number of each relative price unit of the investment in a number of limited states; and measuring a selected limited state of the plurality of limited states in response to the monitoring step The probability that it will become a restricted state when all termination standards are fulfilled. 25. A method to improve liquidity in a demand-based trading method, including the following steps: Execute a restricted state and a number of states. A demand-based trading method that previously decided to terminate the standard, where each limited state corresponds to at least one possible economically significant event, where at least a few units are invested by the price unit of each of several traders The acceptance of one of the limited states and the investment of any price unit Funds cannot be divested after they are accepted. 2 6 · The method of improving the liquidity in a demand-based trading method with 25 items in the scope of patent application, further including the step of hedging 'one of the traders' investment in their previous price unit, by making a The new investment has been hedged in one or more restricted states that had not previously been invested. 0 2 7-A method to improve liquidity in a demand-based trading method, including the following steps: Execute one with several restrictions State and several demand-based transactions methods that previously decided to terminate the standard, each of which has a limited state corresponding to this paper size and applies the Chinese National Standard (CNS) A4 specification (210 X 297 Gongchu) --- I ---- -! I I --- Order! III (Please read the notes on the back before dreaming about writing this page) Printed by the Consumer Cooperatives of the Intellectual Property Bureau of the Ministry of Economic Affairs 24Ά 098899 ABCD 473680 6. Apply for a patent to the possible state of a selected financial product, with several transactions The investment of each price unit is accepted by at least one of a number of limited states, and any investment of a price unit may not be withdrawn after acceptance. • 28. The 27-item method of patent application for enhancing liquidity in a demand-based trading method further includes a step of hedging, in which a trader invests in his previous price unit by doing A new investment has been hedged in one or more limited states that had not previously been invested. 229. A method for guiding quasi-continuous, demand-based transactions, including the following steps: Establishing a correspondence to at least one of the possible events The results of a number of qualifying states and a number of previously determined termination criteria; .instructing a number of trading cycles, each of which is included in a previously defined trading period and before all termination criteria are fulfilled 'by each trader at least Acceptance of a Limited Status Price Unit Investment Step 9 Allocate an expenditure to each investment to reflect the total amount invested in several Limited Status Price Units investment during each of the previously defined trading periods in several trading cycles. Within each previously defined trading period of a number of trading cycles, Each monovalent Zhi opposite state quantity of investment units, and the performance occurs, defining the state of all endpoints in the standard acknowledgment. 3 〇. 29 of the scope of application for patents. Guidance requirements are continuously based on the requirements of paper standards. Chinese national standard (CNS) A4 specifications (210 X 297 mm) are applied. — — — — — — — — — — 111 · 1111111 ^ 11111111 (Please read the notes on the back before copying this page) Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs 6 3 7 4 A8B8C8D8 Printed by the Consumer Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs , Of which several previously defined trading periods are continuous and do not overlap. 3 1 · — A system for guiding demand-based trading, including: accepting tools for each trader to invest in at least one limited state price unit during a previously defined trading period and before all termination standards are fulfilled, Each of the defined states corresponds to at least one major economic event that may result; and an expenditure is allocated to each investment to reflect the price of a number of defined states (the total amount of unit investment, each price in a number of defined states). The relative amount of unit investment, and the confirmation of the 'limited status' when all finalized standard performance occurs. Tool of. 3 2-A system for guiding demand-based trading 'includes: Acceptance of a tool for each trader to invest in at least one limited state price unit during a previously defined trading period and before all termination standards are fulfilled, Among them, when each termination standard is fulfilled, 'Each limited state corresponds to a possible state of a selected financial product; and an expenditure is allocated to each investment' to reflect the price of all the unit investment in several limited states. Quantity 'The relative quantity of each price unit investment in a number of limited states, and the confirmation of a limited state when all finalized standard fulfillment occurs. Tool of. ____ 245r-- This paper size applies to China National Standard (CNS) A4 specification (210 X 297 public love) ----- Ill ---- 1 ----- Order --------- (Please (Read the precautions on the back before proceeding to this page) 473680 A8B8C8D8 Printed by the Consumers ’Cooperative of the Intellectual Property Bureau of the Ministry of Economic Affairs 6. Application for patents 3 3 · A device to guide demand-based transactions, including: one and several An interface processor connected to the trader and the market information system; and a demand-based transaction processor connected to the interface processor and having a transaction status database, the demand-based transaction processor responds to the market information system and A demand-based transaction with a trader maintains a transaction status database and responds to the transaction status database to process demand-based transactions. 3 4 · The scope of the patent application. Item 3 of the demand-based transaction device, wherein maintaining the transaction status database includes: establishing a database with a limited number of statuses, a number of previously determined termination criteria, and at least one transaction cycle or Has the right, where each limited state corresponds to at least one economically significant event and a possible outcome; responds to demand-based transactions, records the price of a unit of investment by a trader in at least one limited state; responds to each In a trading period, the total number of price units in a limited number of states and the corresponding number of price units in a limited state in each transaction period are calculated at the end of each trading period. The final profit; and the response to the identification of the limited status of the final profit when all termination standards are fulfilled, and the decision to pay to each trader; and where the processing of demand-based transactions is included in the transaction period, and is accepted by Each trader priced in units of at least one limited state The paper size of this paper applies the Chinese National Standard (CNS) A4 specification (210 X 297 mm) 1111111111 — — · · I — II 1 II Order · — 111 — 11. ^^ (Please read the notes on the back before writing (This page) 24 &amp; 473680 A8 B8 C8 ___ D8 VI. Scope of Patent Application 〇 3 5 · The 3rd item of the scope of patent application is a demand-based transaction device. The database for maintaining transaction status includes: Establishing a database with several restrictions Status, several previously determined termination criteria ', and contingent rights for at least one trading cycle, where when each termination criterion is fulfilled, each defined status corresponds to a possible status of a selected financial product; the response is based on demand Transactions recorded by a trader in at least one price / unit in a limited state; response to the total number of price / units invested in several limited states in each transaction period, and response to the investment in each transaction period Relative number of price units in several limited states to calculate at the end of each trading period Final profit; and in response to the identification of the final status of all termination standards and the final status of the profit, determine the expenditure to each trader; and where the processing of demand-based transactions is included in the transaction period, and is accepted by Each trader's investment in at least one unit with a limited status price 306. The 34th or 35th demand-based trading device for the scope of patent applications, where maintaining the transaction status database further includes calculating profit estimates; And the processing of demand-based transactions further comprises providing profit estimates 提供 in response to demand-based transactions. 37. Item 3, 4 or 35 of the scope of the patent application, which is a demand-based transaction device, which maintains the transaction status database and further includes the calculation of this paper size applicable to the Chinese National Standard (CNS) A4 specification (210 X 297 mm) ) ----- I! ---- Shang · --- II--Order ------- line (please read the precautions on the back before slicing up this page) Employee Cooperatives of Intellectual Property Bureau of the Ministry of Economic Affairs Printed 24Z 473630 A8 B8 C8 D8 VI. Patent application scope risk estimates 値; and the processing of demand-based transactions further comprises providing risk estimates 回应 in response to demand-based transactions. The basic description and the basic description are provided; the status is divided into the status of assets, investment, investment, and support, which requires multiple statuses, including the status of a period of items, including the return to the pre-five, including more than three easy-to-create or cross-step steps. The basic status of the set of 1 is 3, the basic status is more basic, the composition is required to form a library, the requirements are met, and the organization's profit is set to the junior high school, and it is required to issue a single application, and pay for the payment • The holding price of the installed 8-period maintenance-distribution 3 is pre-supplied and paid for. I — — — — — — — — — — — —— -I! — — — — — ^ «— — — — — II (Please read the notes on the back before dreaming about this page) Employees of Intellectual Property Bureau, Ministry of Economic Affairs Printed by Consumer Cooperatives • Applies to China National Standard (CNS) A4 (210 X 297 mm) 24 &amp;