Selective Early Settlement of Futures Contracts to Reduce Data Load

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Solution Overview

Problem

The computational resources of exchange computing systems are overwhelmed by the large number of futures contracts, particularly interest rate futures, due to the need to maintain and process extensive data for contracts with varying durations and expiration dates, leading to inefficiencies in resource utilization.

Innovation Solution

The system selectively prematurely expires financial instruments, determining a final settlement price in advance using overlapping shorter duration contracts, thereby reducing the number of contracts maintained and processed, allowing for more efficient use of computational resources.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If the exchange maintains and processes extensive data for futures contracts with varying durations and expiration dates, then the completeness and accuracy of contract data is improved, but the computational resource consumption increases

Engineering Contradiction:

Improvecompleteness of contract dataVSAvoidcomputational resource consumption

Core Design Contradiction:

ReliabilityVSUse of energy by moving object

Solution Approach 1:

The patent extracts and removes expired futures contracts from the active contract database. By systematically identifying contracts that have reached their expiration dates and removing them from further processing, the system reduces the volume of data that requires computational resources while maintaining data integrity for active contracts.

Inventive Principle:

Principle #2Taking out (Extraction)

Solution Approach 2:

The patent implements preliminary expiration determination by identifying contracts that will expire soon and preparing them for removal in advance. This proactive approach allows the system to minimize computational overhead by preventing expired contracts from continuing to consume resources during processing operations.

Inventive Principle:

Principle #10Preliminary action

2Adaptability or versatility

If the exchange processes a large number of futures contracts, then the variety of financial instruments available is improved, but the system complexity increases

Engineering Contradiction:

Improvevariety of financial instrumentsVSAvoidsystem complexity

Core Design Contradiction:

Adaptability or versatilityVSDevice complexity

Solution Approach 1:

The patent segments the futures contract portfolio by expiration dates, creating distinct groups of active, expiring, and expired contracts. This segmentation allows the system to apply different processing rules to different segments, simplifying the overall management complexity while supporting a diverse range of financial instruments with varying durations.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The patent implements a systematic process for discarding expired contracts from active processing and recovering computational resources. By automatically identifying and removing contracts that have reached their expiration dates, the system maintains versatility in offering various financial instruments while reducing the complexity of managing active contract data.

Inventive Principle:

Principle #34Discarding and recovering

3Duration of action of stationary object

If the exchange maintains data for contracts with extended contract life, then the duration of contract availability is improved, but the quantity of data to be processed increases

Engineering Contradiction:

Improvecontract lifeVSAvoidquantity of contract data

Core Design Contradiction:

Duration of action of stationary objectVSQuantity of substance

Solution Approach 1:

The patent ensures continuous identification and removal of expired contracts throughout the system operation. By maintaining an ongoing process that monitors contract expiration dates and systematically removes expired contracts, the system supports extended contract lifetimes for active instruments while preventing accumulation of obsolete data that would increase processing quantity.

Inventive Principle:

Principle #20Continuity of useful action

Solution Approach 2:

The patent changes the temporal parameter of contract data by implementing time-based expiration criteria. Contracts are automatically identified for removal based on their expiration dates, allowing the system to maintain data for contracts with extended useful lives while systematically reducing the quantity of outdated data through parameter-driven expiration management.

Inventive Principle:

Principle #35Parameter changes

Data Source

PatentUS12443991B2Minimization of the consumption of data processing resources in an electronic transaction processing system via selective premature settlement of products transacted thereby based on a series of related products

Publication Date: 2025.10.14 CHICAGO MERCANTILE EXCHANGE INC

AI summary

The disclosed embodiments relate to an exchange computing system which selectively prematurely expires financial instruments in order to finally settle them and remove them from the computing system. In particular, the disclosed embodiments recognize that during the pendency of a futures contract between first available trade date and the expiration, the exchange computing system must facilitate trading thereof by tracking traders positions, providing regular pricing data as well as transacting trades therefore. This consumes exchange resource especially given the number of products offered and the extended length of term for some. Accordingly where contracts can be settled early and thereby removed from being transacted, exchange resources may be conserved.