System and methods for pricing and allocation of commodities or securities
Systems and methods for conducting an auction of securities on the Web. The system and methods provide a bid mechanism whereby bidders are rewarded for priority of anonymously revealing their bids and provide an allocation of the securities which allows winning bidders to pay a single market-clearing price that sells out the securities. In addition, the systems and methods allow all participants to monitor the auction in real time.
1. A computerized method for conducting an auction of securities to auction participants, the method comprising:
providing a bid mechanism in a computer system for receiving a plurality of competitive bids each having:
i. an initial bid component, having an initial quantity and an initial price, and having an associated bid time stamp, and
ii. a final bid component within a predetermined range of the initial bid component, having a final quantity and final price, and having the associated bid time stamp of the initial bid component, wherein the predetermined range is set for the auction participants;
using the computer system to provide, based on the final bid components and associated bid time stamps, an allocation of the securities; and
using the computer system to provide monitoring of the auction as it occurs.
2. A computerized method according to claim 1 , wherein the securities are allocated based on a single clearing price that sells all of the securities.
3. A computerized method according to claim 2 , wherein bids at the clearing price are awarded pro-rata.
4. A computerized method according to claim 1 , wherein the securities are allocated at a single clearing price that sells all of the securities.
5. A computerized method according to claim 1 , wherein the securities are allocated at a single clearing price that sells all of the securities, adjusted by an increment determined by at least one of a security issuer and an auction adviser.
6. A computerized method according to claim 1 , wherein the auction participants are limited to investors registered with a designated underwriter.
7. A computerized method according to claim 1 , wherein if the final bid component is not within a predetermined range of the initial bid component, then the bid receives a new bid time stamp.
8. A computerized method according to claim 1 , wherein the final bid component is the initial bid component by default.
9. An apparatus for conducting an auction of securities to auction participants, the apparatus comprising:
a computer system, connected to a computer network whereby the auction participants at remote terminals can communicate with the computer system;
a bid mechanism means coupled to the computer system for receiving a plurality of competitive bids each having:
i. an initial bid component, having an initial quantity and an initial price, and having an associated bid time stamp, and
ii. a final bid component within a predetermined range of the initial bid component, having a final quantity and final price, and having the associated bid time stamp of the initial bid component, wherein the predetermined range is set for the auction participants;
an allocation means coupled to the bid mechanism means for allocation of the securities based on the final bid components and associated bid time stamps; and
a display means at the remote terminals, coupled to the computer system via the computer network for monitoring the auction as it occurs.
10. An apparatus according to claim 9 , wherein the securities are allocated based on a single clearing price that sells all of the securities.
11. An apparatus according to claim 10 , wherein bids at the clearing price are awarded pro-rata.
12. An apparatus according to claim 9 , wherein the securities are allocated at a single clearing price that sells all of the securities.
13. An apparatus according to claim 9 , wherein the securities are allocated at a single clearing price that sells all of the securities, adjusted by an increment determined by at least one of a security issuer and an auction adviser.
14. An apparatus according to claim 9 , wherein the computer system limits the auction participants to investors registered with a designated underwriter.
15. An apparatus according to claim 9 , wherein if the final bid component is not within a predetermined range of the initial bid component, then the bid receives a new bid time stamp.
16. An apparatus according to claim 9 , wherein the final bid component is the initial bid component by default.
17. A computer program product stored on a computer useable medium comprising computer code segments configured to:
conduct an auction of securities on a computer network to auction participants; provide a bid mechanism for receiving a plurality of competitive bids each having:
i. an initial bid component, having an initial quantity and an initial price, and having an associated bid time stamp, and
ii. a final bid component within a predetermined range of the initial bid component, having a final quantity and final price, and having the associated bid time stamp of the initial bid component, wherein the predetermined range is set for the auction participants;
provide an allocation of the securities based on the final bid components and associated bid time stamps; and
provide a system for monitoring the auction as it occurs.