System and method for pricing and allocation of commodities or securities

1. An auction server node in a computer network having one or more user nodes for conducting an auction run by an auction adviser for awarding securities from an issuer to bidders of the auction, such that the auction server node provides for:

a. real-time monitoring of the auction as it occurs;

b. a bid mechanism for receiving competitive bids from the bidders at the user nodes, wherein the competitive bids include:

i. a quantity of securities to be purchased,

ii. an initial price revealed to the other bidders, and

iii. a firm price not revealed to the other bidders and within a predetermined range of the initial price, wherein the predetermined range is set for the bidders;

c. determination of a single market clearing price that allocates to the bidders all of the securities in the auction;

d. an incremental adjustment of the market clearing price by at least one of the auction advisor and the issuer; and

e. an allocation of the securities to the bidders at the adjusted clearing price.

2. An auction server node according to claim 1 , wherein the securities include equity securities or debt securities.

3. An auction server node according to claim 1 , wherein the securities include commodities traded on a licensed commodity exchange.

4. An server node according to claim 3 , wherein the commodities include gold or silver.

5. An auction server node according to claim 1 , wherein the securities include money market instruments.

6. An auction server node according to claim 5 , wherein the money market instruments include one of United States treasury bills, bank certificates of deposit, commercial paper, and repurchase agreements.

7. An auction server node according to claim 1 , wherein the securities comprise one of corporate bonds, municipal bonds, mortgage-backed bonds, emerging market bonds, and junk bonds.

8. An auction server node according to claim 1 , wherein the bid mechanism is an open Dutch auction process.

9. An auction server node according to claim 1 , wherein each of the initial price and the firm price are expressed in terms of basis point increments.

10. An auction server node according to claim 1 , wherein each of the initial price and the firm price are expressed in currency.

11. An auction server node according to claim 1 , wherein an identity of the bidder associated with an initial price is not revealed to the other bidders.

12. An auction server node according to claim 1 , wherein the bid mechanism further receives non-competitive bids which specify a desired quantity of securities and no price limitation.

13. An auction server node according to claim 12 , wherein the securities are allocated to non-competitive bids before competitive bids.

14. An auction server according to claim 1 , wherein the adjusted clearing price equals the market clearing price.

15. An auction server according to claim 1 , wherein the adjusted clearing price is greater than the market clearing price.

16. An auction server according to claim 1 , wherein the adjusted clearing price is less than the market clearing price.

17. An auction server according to claim 1 , wherein the allocation of the securities assigns the securities on a pro rata basis for competitive bids at the adjusted clearing price.

18. An auction server according to claim 1 , wherein the allocation of the securities assigns the securities on a time stamp basis for competitive bids at the adjusted clearing price.

19. An auction server according to claim 1 , wherein the quantity of securities to be purchased includes:

i. an initial quantity revealed to the other bidders, and

ii. a firm quantity not revealed to the other bidders and within a pre-determined range of the initial quantity.