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1. WO2002025398 - HANDLING DEFAULTS IN ELECTRONIC-BASED MARKETS

Note: Text based on automatic Optical Character Recognition processes. Please use the PDF version for legal matters

[ EN ]

What is claimed is:

1. A method of closing positions for a defaulting subscriber in an electronic market, comprises:

offsetting contracts of the defaulting subscriber against opposite side, open interest in the market on a last-in first-out basis at a price established on the day that offsetting is ordered.

2. The method of claim 1 wherein the price is equal to the settlement price on the day that liquidation is ordered.

3. The method of claim 1 wherein the price is a price

established by officials of the board.

4. The method of claim 1 wherein the offsetting of positions mutualizes risk among market participants.

5. The method of claim 1 wherein offsetting allows for orderly disposition of the defaulting subscriber's positions and allows the exchange to operate with minimal capital reserves for handling defaults.

6. A computer program product residing on a computer readable medium for closing positions for a defaulting subscriber in an electronic market, comprises instructions for causing a computer to:

offset contracts of the defaulting subscriber against opposite side, open interest in the market on a last-in first-out basis at a price established on the day that offsetting is

ordered.