Landfall Option Interface With Zip Code Settlement Mapping
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Solution Overview
Problem
There is no efficient computerized system to match sellers and buyers of weather derivatives based on storm landfall predictions, and there is a lack of a system to facilitate different ways for buyers and sellers to purchase or sell these derivatives.
Innovation Solution
A computerized platform that enables trading of binary options based on storm landfall predictions, using a database to map latitude/longitude pairs to zip codes, allowing buyers and sellers to trade hurricane landfall options through a graphical user interface, and facilitating clearing and settling of orders.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If a computerized system is implemented to match sellers and buyers of weather derivatives, then trading efficiency and settlement speed are improved, but system complexity and infrastructure requirements increase
Solution Approach 1:
The platform performs multiple functions including order matching, settlement processing, data mapping, and notification services through a single integrated system, reducing the need for separate specialized systems while improving overall trading efficiency
Solution Approach 2:
The system introduces a centralized platform as an intermediary between buyers and sellers of weather derivatives, facilitating automated matching and settlement while reducing the complexity of direct peer-to-peer negotiations and contract management
2Measurement precision
If detailed latitude/longitude mapping to zip codes is implemented, then landfall location precision is improved, but data processing complexity and storage requirements increase
Solution Approach 1:
The system pre-establishes mapping relationships between latitude/longitude coordinates and zip codes before storm events occur, organizing geographic data in advance to enable rapid and precise landfall location determination without complex real-time processing
Solution Approach 2:
The system creates a simplified digital representation of geographic relationships through coordinate-to-zipcode mapping tables, allowing efficient lookup and comparison of landfall locations against predefined geographic zones without requiring complex geometric calculations
3Loss of time
If rapid settlement of binary options is enabled, then payment speed to buyers is improved, but system responsiveness and real-time processing requirements increase
Solution Approach 1:
The system continuously monitors storm tracking data and automatically triggers settlement processes when landfall conditions are met, creating a feedback loop that enables rapid response and timely payment without requiring constant manual intervention
Solution Approach 2:
The platform automates the entire settlement process including landfall detection, contract validation, and payment execution, allowing the system to handle settlements autonomously without extensive human intervention while maintaining rapid processing speeds
Data Source
AI summary
An apparatus, method, and non-transitory medium for betting on weather predictions are disclosed herein. A plurality of longitude and latitude coordinate pairs may be received from a remote device. The display device may render data on a graphical user interface representing a binary option based on whether a storm will make landfall within the certain radius. The display device may show a plurality of landfall probabilities on the map. A request to purchase the binary option may be received. It may be determined whether the landfall location corresponds to a zip code associated with the given longitude latitude pair in the memory.