Method and system for creating and trading corporate debt security derivative investment instruments

Abstract

A method of creating and trading corporate debt security derivative investment instruments on an exchange, as well as a trading facility for trading such derivatives, is disclosed. Corporate debt security derivative investment instruments are created by identifying a credit rating service that includes a plurality of risk categories. Unique monetary values are mapped to risk categories and an entity rated by the credit rating service is identified. A corporate debt security derivative investment instrument is then created whose value is determined at least in part by the monetary value to which the risk category associated with the rated entity is mapped.

1 .- 13 . (canceled) 
     
     
         14 . A computerized method for facilitating the trading of corporate debt security derivative instruments, the method comprising the following steps:
 receiving, by a trading exchange computer, one or more orders for corporate debt security derivative instruments, wherein the corporate debt security derivative instruments are settled to a price that corresponds to a credit rating category, which is published by a credit rating service;   matching, by the trading exchange computer, a first one of the received orders for corporate debt security derivative instruments to a second one of the received orders for corporate debt security derivative instruments, wherein the second one of the received orders for corporate debt security derivative instruments is a contra order to the first one of the received orders for corporate debt security derivative instruments; and   executing, by the exchange computer, a trade that includes the first one of the received orders for corporate debt security derivative instruments and the second one of the received orders for corporate debt security derivative instruments.   
     
     
         15 . The computerized method of  claim 14 , wherein the corporate debt security derivative instruments are instruments that derive their value based on a credit rating of an entity. 
     
     
         16 . The computerized method of  claim 15 , wherein the entity comprises one of: a corporation, municipal government, a national government, or a supranational government. 
     
     
         17 . The computerized method of  claim 14 , wherein the price that corresponds to the credit rating category is determined by mapping unique credit rating categories to the price. 
     
     
         18 . The computerized method of  claim 14 , wherein the corporate debt security derivative instruments are options. 
     
     
         19 . The computerized method of  claim 14 , wherein the corporate debt security derivative instruments are futures. 
     
     
         20 . A computerized method for facilitating the trading of corporate debt security derivative instruments, the method comprising the following steps:
 receiving, by a trading exchange computer, one or more orders for corporate debt security derivative instruments, wherein the corporate debt security derivative instruments are settled to an index that has a price that corresponds to a credit rating category, which is published by a credit rating service;   matching, by the trading exchange computer, a first one of the received orders for corporate debt security derivative instruments to a second one of the received orders for corporate debt security derivative instruments, wherein the second one of the received orders for corporate debt security derivative instruments is a contra order to the first one of the received orders for corporate debt security derivative instruments; and   executing, by the exchange computer, a trade that includes the first one of the received orders for corporate debt security derivative instruments and the second one of the received orders for corporate debt security derivative instruments.   
     
     
         21 . The computerized method of  claim 20 , wherein the corporate debt security derivative instruments are instruments that derive their value from the index that indicates a credit rating of an entity. 
     
     
         22 . The computerized method of  claim 21 , wherein the entity comprise one of: a corporation, municipal government, a national government, or a supranational government. 
     
     
         23 . The computerized method of  claim 20 , wherein the price that corresponds to the credit rating category is determined by mapping unique credit rating categories to the price. 
     
     
         24 . The computerized method of  claim 20 , wherein the corporate debt security derivative instruments are options. 
     
     
         25 . The computerized method of  claim 20 , wherein the corporate debt security derivative instruments are futures. 
     
     
         26 . A trading system for facilitating the trading of corporate debt security derivative instruments, the trading system comprising:
 an interface configured to receive orders; and   a processor in communication with the interface, the processor configured to:
 receive one or more orders for corporate debt security derivative instruments, wherein the corporate debt security derivative instruments are settled to a price that corresponds to a credit rating category, which is published by a credit rating service; 
 match a first one of the received orders for corporate debt security derivative instruments to a second one of the received orders for corporate debt security derivative instruments, wherein the second one of the received orders for corporate debt security derivative instruments is a contra order to the first one of the received orders for corporate debt security derivative instruments; and 
 execute a trade that includes the first one of the received orders for corporate debt security derivative instruments and the second one of the received orders for corporate debt security derivative instruments. 
   
     
     
         27 . The trading system of  claim 26 , wherein the corporate debt security derivative instruments are instruments that derive their value based on a credit rating of an entity. 
     
     
         28 . The trading system of  claim 27 , wherein the entity comprises one of: a corporation, municipal government, a national government, or a supranational government. 
     
     
         29 . The trading system of  claim 26 , wherein the processor is further configured to assign the price that corresponds to the credit rating category by mapping unique credit rating categories to the price. 
     
     
         30 . The trading system of  claim 26 , wherein the corporate debt security derivative instruments are options. 
     
     
         31 . The trading system of  claim 26 , wherein the corporate debt security derivative instruments are futures. 
     
     
         32 . A trading system for facilitating the trading of corporate debt security derivative instruments, the trading system comprising:
 an interface configured to receive orders; and   a processor in communication with the interface, the processor configured to:
 receive one or more orders for corporate debt security derivative instruments, wherein the corporate debt security derivative instruments are settled to an index that has a price that corresponds to a credit rating category, which is published by a credit rating service; 
 match a first one of the received orders for corporate debt security derivative instruments to a second one of the received orders for corporate debt security derivative instruments, wherein the second one of the received orders for corporate debt security derivative instruments is a contra order to the first one of the received orders for corporate debt security derivative instruments; and 
 execute a trade that includes the first one of the received orders for corporate debt security derivative instruments and the second one of the received orders for corporate debt security derivative instruments.