Storm Landfall Binary Options Trading Interface
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Solution Overview
Problem
There is no efficient computerized system to match sellers of weather derivatives with buyers, nor is there a system to provide buyers and sellers with various options for purchasing or selling these derivatives based on storm landfall predictions.
Innovation Solution
A computerized apparatus and method for trading binary options based on storm landfall predictions, which includes a processor to receive longitude and latitude coordinate pairs, generate associations between these pairs and nearby zip codes, and render a graphical user interface to facilitate the trading of binary options.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If a computerized system is implemented to match buyers and sellers of weather derivatives, then trading efficiency is improved, but system complexity increases
Solution Approach 1:
The system segments the weather derivatives market into distinct binary option contracts, each tied to specific geographic locations (zip codes) and storm parameters. This segmentation allows for standardized, easily tradable units that improve market liquidity and trading efficiency without requiring complex customized derivative structures.
Solution Approach 2:
The patent introduces a centralized computerized platform as an intermediary that matches buyers and sellers of weather derivatives. This intermediary system handles order matching, contract specification, and settlement processes, thereby improving trading efficiency while containing system complexity within a single coordinating platform rather than requiring complex peer-to-peer negotiations.
2Adaptability or versatility
If multiple landfall location options are provided, then user versatility is improved, but information processing complexity increases
Solution Approach 1:
The system provides different levels of landfall location specificity tailored to user needs: exact zip code landfalls, landfalls within specified radii of reference points, and landfalls within polygonal boundaries. This local quality approach allows users to select the appropriate level of geographic detail for their risk management needs without requiring the system to process all possible location variations simultaneously.
Solution Approach 2:
The patent extends the landfall location specification from simple point coordinates to multiple spatial dimensions including radius-based circular areas and polygonal boundary regions. This dimensional expansion provides greater versatility in defining landfall zones while using standardized geometric calculations that keep information processing manageable through efficient spatial algorithms.
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 representing a binary option based on whether a storm will make landfall within the certain radius. 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.