Futures contracts on restricted compensation securities
Futures contracts on options contracts are provided in which the duty to purchase the right to purchase a commodity or security may be agreed upon by two or more parties. The futures contract segment of the exchange device is the duty to purchase the underlying options contract at a specific time. The options contract segment of the exchange device is the right to buy an underlying security or commodity. Margin schemes may be included in either segment of the exchange device or the exchange device as a whole.
1. A method, comprising the steps of:
at a computer of an electronic trading system designed to trade futures on restricted compensatory securities, receiving from a first party an order to trade a futures contract on restricted compensatory securities, the restricted compensatory securities being a financial instrument of an issuer that issued the restricted compensatory securities an initial issuee of the restricted compensatory securities as compensation for employment by or services to the issuer, the futures contract creating a duty on the purchaser to purchase or sell the restricted compensatory securities at a delivery date;
receiving at a computer of the electronic trading system a counter order for the futures contract from a counter party; and
as a result of matching of the order and counter order, issuing transfer instructions to transfer the futures contract on the restricted compensatory securities between the first party and the counter party.
2. The method of claim 1 , further comprising the step of:
in the electronic trading system, maintaining and executing data instructing delivery of the restricted compensatory securities on the delivery date.
3. The method of claim 1 , wherein the restricted compensatory securities is a restricted employee option contract.
4. The method of claim 3 :
wherein the restricted compensatory securities comprises at least one vesting condition;
the method further comprising holding, in an escrow account, at least a portion of proceeds from the transfer of the futures contract until the at least one condition for vesting is satisfied.
5. The method of claim 1 , wherein
the restricted compensatory securities is a convertible employee option.
6. The method of claim 1 :
wherein the restricted compensatory securities include an employee option;
the method further comprising issuing at the delivery date new restricted compensatory securities to satisfy a purchaser of the futures contract.
7. The method of claim 1 , wherein:
the futures contract is transferred subject to one margin scheme based on both the future and the restricted compensatory securities.
8. The method of claim 1 , wherein:
the restricted compensatory securities is transferred subject to a first margin scheme for the restricted compensatory securities; and
the futures contract is transferred subject to a second margin scheme for the futures contract.
9. The method of claim 1 , wherein:
the futures contract order covers a futures on restricted compensatory securities with a plurality of vesting dates.
10. The method of claim 1 , wherein:
the restricted compensatory securities include stock of the issuer.
11. The method of claim 1 , wherein:
the restricted compensatory securities include a bond of the issuer.
12. The method of claim 1 , wherein:
the restricted compensatory securities include a convertible bond of the issuer.
13. A system for trading a futures contract, comprising:
a processor; and
a memory, the memory having stored therein at least one software module that when executed is operable to cause the processor to:
receive from a first party an order to trade a futures contract on a restricted compensatory securities, the restricted compensatory securities are financial instruments of an issuer that issued the restricted compensatory securities to the initial issuee of the restricted compensatory securities as compensation for employment by or services to the issuer, and the futures contract creating a duty on the purchaser to purchase or sell the restricted compensatory securities at a delivery date;
receive a counter order for the restricted compensatory securities from a counter party; and
as a result of matching of the order and counter order, issue instructions to transfer the futures contract on the restricted compensatory securities between the first party and the counter party.
14. The system of claim 13 , the method further comprising the step of:
in the electronic trading system, maintaining and executing data instructing delivery of the restricted compensatory securities on the delivery date.
15. The system of claim 13 , wherein:
the restricted compensatory securities is a restricted employee option contract.
16. The system of claim 15 :
wherein the restricted compensatory securities comprises at least one vesting condition;
the method further comprising holding, in an escrow account, at least a portion of proceeds from the transfer of the futures contract until the at least one condition for vesting is satisfied.
17. The system of claim 13 , wherein:
the restricted compensatory securities is a convertible employee compensatory option.
18. The system of claim 13 :
wherein the restricted compensatory securities is an employee compensatory option;
the method further comprising issuing at the delivery date a new restricted compensatory securities to satisfy a purchaser of the futures contract.
19. The system of claim 13 , wherein:
the futures contract is transferred subject to one margin scheme based on both the future and the restricted compensatory securities.
20. The system of claim 13 , wherein:
the restricted compensatory securities are transferred subject to a first margin scheme for the restricted compensatory securities; and
the futures contract is transferred subject to a second margin scheme for the futures contract.