IP Library › Patent Application 12387820
Patent Application
App. No. 12/387,820

Method for valuing forwards, futures and options on real estate

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Quick Facts
Patent No.
US None
App. No.
12/387,820
Abstract

A system and method for matching buy and sell orders is provided. A daily cash index of real estate values for a local region is maintained and a trading instrument representative of an interest in real estate in the local region is created. In this regard, a cash settlement of the trading instrument is a function of the daily cash index on the date of said cash settlement. In addition, a plurality of buy orders relating to the instrument are generated; a plurality of sell orders relating to the instrument are generated; and the buy and sell orders are matched to determine a purchase and sale of the instrument.

Claims (37)

1 . A method for matching buy and sell orders, comprising the steps of:

maintaining a daily cash index of real estate values for a local region, said daily cash index based, at least in part, on one or more of absorption rates and capitalization rates;

creating a trading instrument representative of an interest in real estate in the local region, wherein a cash settlement of the trading instrument is a function of the daily cash index on the date of said cash settlement;

generating a plurality of buy orders relating to the instrument;

generating a plurality of sell orders relating to the instrument; and

matching the buy and sell orders to determine a purchase and sale of the instrument.

2 . The method of claim 1 , wherein the trading instrument is a futures contract.

3 . The method of claim 1 , wherein the trading instrument is a forward contract.

4 . The method of claim 1 , wherein the trading instrument is an option on a futures contract.

5 . The method of claim 1 , wherein the trading instrument is an option on a forward contract.

6 . The method of claim 1 , wherein each day's daily cash index is generated as a function of a survey of actual real estate transactions executed on said day.

7 . The method of claim 6 , wherein the real estate transactions are real estate leases.

8 . The method of claim 6 , wherein the daily cash index is calculated on a weighted average basis.

9 . The method of claim 6 , wherein the daily cash index is calculated on a moving average basis.

10 . The method of claim 6 , wherein the daily cash index is calculated on an exponential moving average basis.

11 . The method of claim 8 , wherein the daily cash index is weighted according to building classes, wherein the building classes include at least Class A building, Class B buildings, and Class C buildings.

12 . The method of claim 1 , wherein the daily cash index is aggregated on a monthly basis to provide a monthly index value.

13 . The method of claim 1 , further comprising generating a volatility value of the daily cash index, said volatility value being a function of a historic performance of the daily cash index.

14 . The method of claim 13 , wherein the historic performance is a function of aggregated monthly values of the daily cash index over a plurality of years.

15 . A method for trading futures contracts in real estate, comprising the steps of:

a. maintaining a daily cash index of real estate values for a local region, said daily cash index based, at least in part, on one or more of absorption rates and capitalization rates;

b. creating a futures contract representative of an interest in real estate in the local region, the futures contract having a settlement date, wherein a cash settlement of the futures contract is a function of the daily cash index on the settlement date;

c. receiving a plurality of buy orders relating to the futures contract;

d. receiving a plurality of sell orders relating to the futures contract;

e. matching the buy and sell orders to determine a purchase and sale of the futures contract.

16 . The method of claim 15 , wherein the daily cash index is aggregated on a monthly basis to provide a monthly index value.

17 - 51 . (canceled)

52 . A method for matching buy and sell orders, comprising the steps of:

maintaining a daily cash index of hotel room values for a local region, said daily cash index based, at least in part, on one or more of revenue per room and profit per room;

creating a trading instrument representative of an interest in hotel room occupancy (or vacancies) in the local region, wherein a cash settlement of the trading instrument is a function of the daily cash index on the date of said cash settlement;

generating a plurality of buy orders relating to the instrument;

generating a plurality of sell orders relating to the instrument; and

matching the buy and sell orders to determine a purchase and sale of the instrument.

53 . The method of claim 52 , wherein the trading instrument is a futures contract.

54 . The method of claim 52 , wherein the trading instrument is a forward contract.

55 . The method of claim 52 , wherein the trading instrument is an option on a futures contract.

56 - 76 . (canceled)