System and method for batch bidding on employee stock options

1 . A method for bidding on employee stock options, the method comprising:

issuing options to an employee on stock of an issuing company at a first time, the options comprising at least a strike price, a maturity date and a vesting date;

providing information on the options to a plurality of bidders at a second time that is after the first time, the information comprising strike price, maturity date and number of options;

receiving bid information from the plurality of bidders;

selecting a probability distribution function;

computing a price density distribution for the plurality of bidders using the received bid information and the probability distribution function;

selecting a preferred bidder from the plurality of bidders based on the price density distribution; and

providing the bid information from the preferred bidder to the employee.

2 . A method according to claim 1 , further comprising:

receiving an order from the employee to sell or transfer at least some of the options;

executing at least part of the order; and

providing order execution information to the employee.

3 . A method according to claim 2 , wherein the order is a market order to sell.

4 . A method according to claim 2 , wherein the order is a limit order to sell.

5 . A method according to claim 2 , wherein the order comprises a number of options to sell.

6 . A method according to claim 1 , further comprising:

determining a stock price; and

determining an execution price using at least the stock price and the bid information from the preferred bidder.

7 . A method according to claim 6 , wherein determining a stock price; and determining an execution price occurs following the close of a predetermined election period.

8 . A method according to claim 1 , wherein the bid information is bid price.

9 . A method according to claim 1 , wherein the price density distribution is a sumproduct of price and probability.

10 . A method according to claim 1 , wherein the preferred bidder is the preferred bidder for all options.

11 . A method according to claim 1 , wherein the preferred bidder is the preferred bidder for options with a particular vesting date.

12 . A method according to claim 1 , wherein the preferred bidder is the preferred bidder for options with a particular strike price.

13 . A method according to claim 1 , wherein the preferred bidder is the preferred bidder for a particular stock price.

14 . A method according to claim 1 , wherein receiving bid information from the plurality of bidders further comprises receiving an option price model from at least one bidder.

15 . A method according to claim 1 , wherein receiving bid information from the plurality of bidders further comprises receiving a price grid from at least one bidder.

16 . A method according to claim 1 , wherein the preferred bidder is a winning bidder.

17 . A method according to claim 1 , wherein the probability distribution function is a normal distribution function.

18 . A method according to claim 17 , wherein the normal distribution function includes an impulse to account for prices below zero.

19 . A method according to claim 1 , wherein the probability distribution function is a lognormal distribution function.

20 . A method according to claim 1 , wherein the probability distribution function is a chi-squared distribution function.

21 . A method according to claim 1 , wherein providing information on the options to a plurality of bidders, receiving bid information from the plurality of bidders, computing a price density distribution for the plurality of bidders, selecting a preferred bidder from the plurality of bidders, and providing the bid information from the preferred bidder to the employee occurs during a predetermined election period.

22 . A method according to claim 1 , wherein the price density distribution spans an integer number of standard deviations above and below a stock price.

23 . A method according to claim 22 , wherein the integer number of standard deviations is one standard deviation above and below the stock price.

24 . A method according to claim 22 , wherein the integer number of standard deviations is two standard deviations above and below the stock price.

25 . A method for bidding on employee stock options, the method comprising:

issuing options to an employee on stock of an issuing company at a first time, the options comprising at least a strike price, a maturity date and a vesting date;

providing, during an election period that is after the first time, information on the options to a plurality of bidders the information comprising strike price, maturity date and number of options;

receiving, during the election period, bid prices from the plurality of bidders wherein the bid prices are selected from the group consisting of an option price model and a price grid;

selecting a probability distribution function;

computing, during the election period, a price density distribution for the plurality of bidders using the received bid prices and the probability distribution function;

selecting, during the election period, a preferred bidder from the plurality of bidders based on the price density distribution;

providing, during the election period, the bid prices from the preferred bidder to the employee;

receiving, during the election period, a market order from the employee to sell or transfer at least some of the options;

ending the election period;

determining, during a stock price averaging period that follows the election period, a stock price;

determining an execution price using at least the stock price and the bid prices from the preferred bidder;

executing at least part of the order at the execution price; and

providing order execution information to the employee and the preferred bidder.

26 . A system for bidding on employee stock options, comprising:

means for issuing options to an employee on stock of an issuing company at a first time, the options comprising at least a strike price, a maturity date and a vesting date;

means for providing information on the options to a plurality of bidders at a second time that is after the first time, the information comprising strike price, maturity date and number of options;

means for receiving bid information from the plurality of bidders;

means for selecting a probability distribution function;

means for computing a price density distribution for the plurality of bidders using the received bid information and the probability distribution function;

means for selecting a preferred bidder from the plurality of bidders based on the price density distribution; and

means for providing the bid information from the preferred bidder to the employee.

27 . A computer-readable medium having computer executable software code stored thereon, the code for bidding on employee stock options, the code comprising:

code to issue options to an employee on stock of an issuing company at a first time, the options comprising at least a strike price, a maturity date and a vesting date;

code to provide information on the options to a plurality of bidders at a second time that is after the first time, the information comprising strike price, maturity date and number of options;

code to receive bid information from the plurality of bidders;

code to select a probability distribution function;

code to compute a price density distribution for the plurality of bidders using the received bid information and the probability distribution function;

code to select a preferred bidder from the plurality of bidders based on the price density distribution; and

code to provide the bid information from the preferred bidder to the employee.

28 . Computer executable software code transmitted as an information signal, the code for bidding on employee stock options, the code comprising:

code to issue options to an employee on stock of an issuing company at a first time, the options comprising at least a strike price, a maturity date and a vesting date;

code to provide information on the options to a plurality of bidders at a second time that is after the first time, the information comprising strike price, maturity date and number of options;

code to receive bid information from the plurality of bidders;

code to select a probability distribution function;

code to compute a price density distribution for the plurality of bidders using the received bid information and the probability distribution function;

code to select a preferred bidder from the plurality of bidders based on the price density distribution; and

code to provide the bid information from the preferred bidder to the employee.

29 . A programmed computer for bidding on employee stock options, comprising:

a memory having at least one region for storing computer executable program code; and

a processor for executing the program code stored in the memory, wherein the program code comprises:

code to issue options to an employee on stock of an issuing company at a first time, the options comprising at least a strike price, a maturity date and a vesting date;

code to provide information on the options to a plurality of bidders at a second time that is after the first time, the information comprising strike price, maturity date and number of options;

code to receive bid information from the plurality of bidders;

code to select a probability distribution function;

code to compute a price density distribution for the plurality of bidders using the received bid information and the probability distribution function;

code to select a preferred bidder from the plurality of bidders based on the price density distribution; and

code to provide the bid information from the preferred bidder to the employee.