U.S. patent application number 12/017355 was filed with the patent office on 2009-07-23 for system, method and graphic user interface for simulated gaming experience based on financial transactions.
This patent application is currently assigned to PIPSTRADE LTD.. Invention is credited to Oren TIROSH.
Application Number | 20090186678 12/017355 |
Document ID | / |
Family ID | 40876914 |
Filed Date | 2009-07-23 |
United States Patent
Application |
20090186678 |
Kind Code |
A1 |
TIROSH; Oren |
July 23, 2009 |
SYSTEM, METHOD AND GRAPHIC USER INTERFACE FOR SIMULATED GAMING
EXPERIENCE BASED ON FINANCIAL TRANSACTIONS
Abstract
A system, method and graphic user interface for providing a user
with a simulated gaming experience based on financial transactions
has a gaming interface presented to a user who provides, via the
gaming interface, a gaming input having a defined cost and a given
set of possible returns. A purchase order is then generated on
behalf of the user for a set of short-term digital options having
substantially the same set of possible returns as the gaming input.
When the actual return of the set of digital options of the
generated purchase order becomes available, a gaming result is
presented to the user via the gaming interface. The gaming result
is chosen to have a payout related to the actual return of the set
of digital options.
Inventors: |
TIROSH; Oren; (Ramat Gan,
IL) |
Correspondence
Address: |
DR. MARK M. FRIEDMAN;C/O BILL POLKINGHORN - DISCOVERY DISPATCH
9003 FLORIN WAY
UPPER MARLBORO
MD
20772
US
|
Assignee: |
PIPSTRADE LTD.
Bnei Brak
IL
|
Family ID: |
40876914 |
Appl. No.: |
12/017355 |
Filed: |
January 22, 2008 |
Current U.S.
Class: |
463/16 |
Current CPC
Class: |
G07F 17/32 20130101;
G06Q 30/08 20130101 |
Class at
Publication: |
463/16 |
International
Class: |
A63F 9/24 20060101
A63F009/24 |
Claims
1. A method for providing a user with a simulated gaming experience
based on financial transactions, the method comprising the steps
of: (a) presenting to the user a gaming interface; (b) receiving
from the user via said gaming interface a gaming input having a
defined cost and a given set of possible returns; (c) generating a
purchase order on behalf of the user for a set of short-term
digital options having substantially the same set of possible
returns as said gaming input; and (d) presenting to the user via
said gaming interface a gaming result having a payout related to an
actual return of said set of digital options of said generated
purchase order.
2. The method of claim 1, wherein said set of digital options are
chosen to provide a probability of each possible return similar to
probabilities of the corresponding possible returns of said gaming
input.
3. The method of claim 1, wherein said set of digital options are
based on at least one publicly available, continuously updated
underlying financial instrument.
4. The method of claim 3, wherein, during a first period of a day,
said set of digital options are based on at least one underlying
financial instrument traded in a first region of the world and,
during a second period of the day, said set of digital options are
based on at least one underlying financial instrument traded in a
second region of the world.
5. The method of claim 1, wherein said digital options are
over-the-counter options.
6. The method of claim 1, wherein said set of digital options
includes a plurality of binary options having differing possible
returns based on a common underlying financial instrument, said
plurality of binary options having the same expiry time and
different thresholds.
7. The method of claim 1, wherein each of said digital options is a
binary option with a predefined fixed return ratio between its
possible returns and its purchase price.
8. The method of claim 1, wherein said set of digital options are
generated dynamically in response to said gaming input.
9. The method of claim 6, wherein said digital options have a
lifetime from issue to expiry of less than one minute.
10. The method of claim 1, wherein said set of digital options are
selected from a pool of pre-published publicly available options
including a plurality of options with successive expiry times
separated by periods of less than one minute.
11. The method of claim 1, wherein said gaming interface is
configured to receive at least one possible gaming input having at
least three different possible returns.
12. The method of claim 1, wherein said gaming interface is a
roulette interface, and wherein said gaming input is indicative of
a value placed on at least one betting location on said roulette
interface.
13. The method of claim 1, wherein said gaming interface is a slot
machine interface.
14. The method of claim 1, wherein said gaming interface is
configured to present to the user, and to receive gaming inputs
corresponding to bets placed in, a game selected from the group
consisting of: Craps; Baccarat; Sic Bo; and Keno.
15. The method of claim 1, wherein said gaming interface is
configured to present to the user, and to receive gaming inputs
corresponding to bets placed in, a game of chance.
16. The method of claim 1, wherein the gaming result presented to
the user is selected in an apparently unordered manner from a set
of possible gaming results having a payout corresponding to said
actual return.
17. The method of claim 1, further comprising providing to the user
a trading interface providing information regarding said set of
digital options.
18. The method of claim 1 further comprising debiting a financial
account of the user the defined cost of the gaming input and
crediting to the financial account of the user any return from said
set of digital options.
19. A method for providing a user with a simulated gaming
experience based on financial transactions, the method comprising
the steps of: (a) presenting to the user a roulette gaming
interface including a representation of a roulette table having
betting locations; (b) receiving from the user via said roulette
gaming interface a gaming input indicative of a value placed on at
least one of said betting locations, said gaming input having a
given set of possible returns according to the rules of roulette;
(c) generating a purchase order on behalf of the user for a set of
short-term digital options having substantially the same set of
possible returns as said gaming input; and (d) presenting to the
user via said roulette gaming interface a gaming result having a
payout related to an actual return of said set of digital options
of said generated purchase order.
20. A method for providing a user with a simulated gaining
experience based on financial transactions, the method comprising
the steps of (a) presenting to the user a slot machine gaming
interface including a representation of a plurality of reels; (b)
receiving from the user via said slot machine gaming interface a
gaming input indicative of actuation of the slot machine game, said
gaming input having a defined cost and a given set of possible
returns; (c) generating a purchase order on behalf of the user for
a set of short-term digital options having substantially the same
set of possible returns as said gaming input; and (d) presenting to
the user via said slot machine gaming interface a gaming result
having a payout related to an actual return of said set of digital
options of said generated purchase order.
21. A system for providing a user with a simulated gaming
experience based on financial transactions, the system comprising:
(a) a gaming interface operative to receive from the user a gaming
input having a defined cost and a given set of possible returns;
and (b) a purchase order generator operative to generate a purchase
order on behalf of the user for a set of short-term digital options
having substantially the same set of possible returns as said
gaming input wherein said gaming interface is further operative to
present to the user a gaming result having a payout related to an
actual return of said set of digital options of said generated
purchase order.
22. A computer readable medium having stored thereon computer
readable program code for providing a user with a simulated gaming
experience based on financial transactions, the program code being
operable to: (a) present to the user a gaming interface; (b)
receive from the user via said gaming interface a gaming input
having a defined cost and a given set of possible returns; (c)
generate a purchase order on behalf of the user for a set of
short-term digital options having substantially the same set of
possible returns as said gaining input; and (d) present to the user
via said gaming interface a gaming result having a payout related
to an actual return of said set of digital options of said
generated purchase order.
23. A method for facilitating financial transactions, the method
comprising: (a) presenting to a user a brokerage agreement, said
presented brokerage agreement providing that a gaming input
received by a gaming user interface be considered authorization to
purchase on behalf of said user a set of short-term digital options
having substantially the same set of possible returns as the gaming
input; (b) receiving via said gaming user interface a
user-generated gaming input having a defined cost and a given set
of possible returns, thereby authorizing, contingent on acceptance
by said user of said brokerage agreement, purchase on behalf of
said user of a set of short-term digital options having
substantially the same set of possible returns as the gaming input;
and (c) presenting via said gaming interface a gaming result having
a payout related to an actual return of said purchased set of
digital options purchased on behalf of said user.
24. A method for facilitating performance of financial transactions
by a user, the method comprising: (a) entering a brokerage
agreement, said brokerage agreement providing that a gaming input
received by a gaming user interface be considered authorization to
purchase on behalf of the user a set of short-term digital options
having substantially the same set of possible returns as the gaming
input; (b) providing via said gaming user interface a
user-generated gaming input having a defined cost and a given set
of possible returns, thereby authorizing according to said
brokerage agreement purchase of said set of short-term digital
options having substantially the same set of possible returns as
said gaming input; and (c) receiving via said gaming interface a
gaming result having a payout related to an actual return of said
purchased set of digital options purchased on behalf of said user.
Description
FIELD AND BACKGROUND OF THE INVENTION
[0001] The present invention relates to a system, method and
graphic user interface for providing a user with a simulated gaming
experience based on financial transactions.
[0002] Internet casinos and similar online gaming services have
proven to be a popular form of entertainment and excitement for
significant sectors of the public. However, various regulatory
limitations have been imposed in many jurisdictions limiting or
prohibiting the provision of casino games of chance online.
[0003] Although subject to strict regulation of its own, trading on
financial markets is not included in such prohibitions.
Particularly in transactions dependent upon short term market
fluctuations, some financial transactions give a user experience
somewhat similar to the aforementioned games of chance in the sense
that their outcomes are unpredictable and they offer a possibility
of immediate returns. Practically, however, many users are
inhibited from entering the financial markets with which they are
unfamiliar.
[0004] Many attempts have been made to popularize access to
financial trading by providing investor tools and "user-friendly"
interfaces. In some cases, the performance of financial instruments
has been presented in a metaphoric representation, for example,
displaying fluctuations in a currency exchange rate as a race
between two competitors. Even in such cases, the user still
directly selects the details of the financial transaction.
[0005] There is therefore a need for a system, method and graphic
user interface for providing a user with a simulated gaming
experience where a gaming input of a user to a gaming user
interface would be interpreted as an order for a corresponding set
of financial transactions. It would also be advantageous to provide
a system, method and graphic user interface for simulating a game
of chance by commuting the possible returns of the game of chance
into a financial holding with a similar set of possible
returns.
SUMMARY OF THE INVENTION
[0006] The present invention is a system, method and graphic user
interface for providing a user with a simulated gaming experience
based on financial transactions.
[0007] According to the teachings of the present invention there is
provided, a method for providing a user with a simulated gaming
experience based on financial transactions, the method comprising
the steps of: (a) presenting to the user a gaming interface; (b)
receiving from the user via the gaming interface a gaming input
having a defined cost and a given set of possible returns; (c)
generating a purchase order on behalf of the user for a set of
short-term digital options having substantially the same set of
possible returns as the gaming input; and (d) presenting to the
user via the gaming interface a gaming result having a payout
related to an actual return of the set of digital options of the
generated purchase order.
[0008] According to a further feature of the present invention, the
set of digital options are chosen to provide a probability of each
possible return similar to probabilities of the corresponding
possible returns of the gaming input.
[0009] According to a further feature of the present invention, the
set of digital options are based on at least one publicly
available, continuously updated underling financial instrument.
[0010] According to a further feature of the present invention,
during a first period of a day, the set of digital options are
based on at least one underlying financial instrument traded in a
first region of the world and, during a second period of the day,
the set of digital options are based on at least one underlying
financial instrument traded in a second region of the world.
[0011] According to a further feature of the present invention, the
digital options are over-the-counter options.
[0012] According to a further feature of the present invention, the
set of digital options includes a plurality of binary options
having differing possible returns based on a common underlying
financial instrument, the plurality of binary options having the
same expiry time and different thresholds.
[0013] According to a further feature of the present invention,
each of the digital options is a binary option with a predefined
fixed return ratio between its possible returns and its purchase
price.
[0014] According to a further feature of the present invention, the
set of digital options are generated dynamically in response to the
gaining input.
[0015] According to a further feature of the present invention, the
digital options have a lifetime from issue to expiry of less than
one minute.
[0016] According to a further feature of the present invention, the
set of digital options are selected from a pool of pre-published
publicly available options including a plurality of options with
successive expiry times separated by periods of less than one
minute.
[0017] According to a further feature of the present invention, the
gaming interface is configured to receive at least one possible
gaming input having at least three different possible returns.
[0018] According to a further feature of the present invention, the
gaming interface is a roulette interface, and wherein the gaming
input is indicative of a value placed on at least one betting
location on the roulette interface.
[0019] According to a further feature of the present invention, the
gaming interface is a slot machine interface.
[0020] According to a further feature of the present invention, the
gaming interface is configured to present to the user, and to
receive gaming inputs corresponding to bets placed in, a game
selected from the group consisting of: Craps; Baccarat; Sic Bo; and
Keno.
[0021] According to a further feature of the present invention, the
gaming interface is configured to present to the user, and to
receive gaming inputs corresponding to bets placed in, a game of
chance.
[0022] According to a further feature of the present invention, the
gaming result presented to the user is selected in an apparently
unordered manner from a set of possible gaming results having a
payout corresponding to the actual return.
[0023] According to a further feature of the present invention, a
trading interface providing information regarding the set of
digital options is also provided to the user.
[0024] According to a further feature of the present invention, a
financial account of the user is debited the defined cost of the
gaming input and credited any return from the set of digital
options.
[0025] There is also provided according to the teachings of the
present invention, a method for providing a user with a simulated
gaming experience based on financial transactions, the method
comprising the steps of: (a) presenting to the user a roulette
gaming interface including a representation of a roulette table
having betting locations; (b) receiving from the user via the
roulette gaming interface a gaming input indicative of a value
placed on at least one of the betting locations, the gaming input
having a given set of possible returns according to the rules of
roulette; (c) generating a purchase order on behalf of the user for
a set of short-term digital options having substantially the same
set of possible returns as the gaming input; and (d) presenting to
the user via the roulette gaming interface a gaming result having a
payout related to an actual return of the set of digital options of
the generated purchase order.
[0026] There is also provided according to the teachings of the
present invention, a method for providing a user with a simulated
gaming experience based on financial transactions, the method
comprising the steps of: (a) presenting to the user a slot machine
gaming interface including a representation of a plurality of
reels; (b) receiving from the user via the slot machine gaming
interface a gaming input indicative of actuation of the slot
machine game, the gaming input having a defined cost and a given
set of possible returns; (c) generating a purchase order on behalf
of the user for a set of short-term digital options having
substantially the same set of possible returns as the gaming input;
and (d) presenting to the user via the slot machine gaming
interface a gaming result having a payout related to an actual
return of the set of digital options of the generated purchase
order.
[0027] There is also provided according to the teachings of the
present invention, a system for providing a user with a simulated
gaming experience based on financial transactions, the system
comprising: (a) a gaming interface operative to receive from the
user a gaming input having a defined cost and a given set of
possible returns; and (b) a purchase order generator operative to
generate a purchase order on behalf of the user for a set of
short-term digital options having substantially the same set of
possible returns as the gaming input, wherein the gaming interface
is further operative to present to the user a gaming result having
a payout related to an actual return of the set of digital options
of the generated purchase order.
[0028] There is also provided according to the teachings of the
present invention, a computer readable medium having stored thereon
computer readable program code for providing a user with a
simulated gaining experience based on financial transactions, the
program code being operable to: (a) present to the user a gaming
interface; (b) receive from the user via the gaming interface a
gaming input having a defined cost and a given set of possible
returns; (c) generate a purchase order on behalf of the user for a
set of short-term digital options having substantially the same set
of possible returns as the gaming input; and (d) present to the
user via the gaming interface a gaming result having a payout
related to an actual return of the set of digital options of the
generated purchase order.
[0029] There is also provided according to the teachings of the
present invention, a method for facilitating financial
transactions, the method comprising: (a) presenting to a user a
brokerage agreement, the presented brokerage agreement providing
that a gaming input received by a gaming user interface be
considered authorization to purchase on behalf of the user a set of
short-term digital options having substantially the same set of
possible returns as the gaming input; (b) receiving via the gaming
user interface a user-generated gaming input having a defined cost
and a given set of possible returns, thereby authorizing,
contingent on acceptance by the user of the brokerage agreement,
purchase on behalf of the user of a set of short-term digital
options having substantially the same set of possible returns as
the gaming input; and (c) presenting via the gaming interface a
gaming result having a payout related to an actual return of the
purchased set of digital options purchased on behalf of the
user.
[0030] There is also provided according to the teachings of the
present invention, a method for facilitating performance of
financial transactions by a user, the method comprising: (a)
entering a brokerage agreement, the brokerage agreement providing
that a gaming input received by a gaming user interface be
considered authorization to purchase on behalf of the user a set of
short-term digital options having substantially the same set of
possible returns as the gaming input; (b) providing via the gaming
user interface a user-generated gaming input having a defined cost
and a given set of possible returns, thereby authorizing according
to the brokerage agreement purchase of the set of short-term
digital options having substantially the same set of possible
returns as the gaming input; and (c) receiving via the gaming
interface a gaming result having a payout related to an actual
return of the purchased set of digital options purchased on behalf
of the user.
BRIEF DESCRIPTION OF THE DRAWINGS
[0031] The invention is herein described, by way of example only,
with reference to the accompanying drawings, wherein:
[0032] FIG. 1 is a schematic representation of part of a display
from a graphic user interface for implementing a method,
constructed and operative according to the teachings of the present
invention, illustrating an example of a gaming input;
[0033] FIG. 2A is a graph illustrating the set of possible returns
of the gaming input of FIG. 1 as a function of the landing location
of a ball on a roulette wheel (positions 0-36);
[0034] FIG. 2B is a graph equivalent to FIG. 2A in which the
results having similar returns are grouped together to construct a
probability distribution of returns;
[0035] FIG. 3A illustrates a probability function for variations in
value of an underlying financial instrument over the term of a
short-term option according to the present invention;
[0036] FIGS. 3B and 3C illustrate two binary options based on the
underlying financial instrument of FIG. 3A used together according
to the teachings of the present invention to provide a set of
possible returns similar to that of FIG. 2B;
[0037] FIG. 4A illustrates the variation in value of the underlying
financial instrument over the term of the binary options of FIGS.
3B and 3C, while FIG. 4B is a reproduction of FIG. 3A on the same
axes as FIG. 4A;
[0038] FIG. 5 is a flow diagram illustrating an implementation of a
method, according to the teachings of the present invention, for
providing a user with a simulated gaming experience based on
financial transactions;
[0039] FIG. 6A is a detailed flow diagram of the "Generate Purchase
Order" step of FIG. 5;
[0040] FIG. 6B is a detailed flow diagram of the "Present Gaming
Result" step of FIG. 5;
[0041] FIG. 7 is a generalized schematic block diagram of a system,
constructed and operative according to the teachings of the present
invention, for implementing the method of the present
invention;
[0042] FIG. 8 is a functional system diagram of the system of FIG.
7; and
[0043] FIG. 9 is a block diagram of one preferred client-side
implementation of FIGS. 7 and 8.
DESCRIPTION OF THE PREFERRED EMBODIMENTS
[0044] The present invention is a system, method and graphic user
interface for providing a user with a simulated gaming experience
based on financial transactions.
[0045] The principles and operation of systems, methods and user
interfaces according to the present invention may be better
understood with reference to the drawings and the accompanying
description.
[0046] Referring now to the drawings, by way of an overview, FIGS.
1-4B illustrate various aspects of a preferred implementation of a
method according to the present invention for providing a user with
a simulated gaming experience based on financial transactions. The
method is itself presented as a flow diagram in FIG. 5 and further
detailed in FIGS. 6A and 6B. A corresponding system, constructed
and operative according to the teachings of the present invention,
is presented in FIGS. 7-9.
[0047] In general terms, the method of the present invention may be
described as follows. A gaming interface is presented to a user who
provides, via the gaming interface, a gaming input having a defined
cost and a given set of possible returns. A purchase order is then
generated on behalf of the user for a set of short-term digital
options having substantially the same set of possible returns as
the gaming input. When the actual return of the set of digital
options of the generated purchase order becomes available, a gaming
result is presented to the user via the gaming interface. The
gaming result is chosen to have a payout related to the actual
return of the set of digital options.
[0048] At this stage, it will already be appreciated that the
present invention provides a user experience closely paralleling
that of an online casino or other game of chance while in fact
being based on an engine which performs conventional financial
transactions, thereby steering clear of various regulatory or other
limitations associated with online gambling. This and other
advantages of the present invention will be better understood with
reference to the detailed description below.
Definitions
[0049] Before addressing the features of the present invention in
more detail, it will be helpful to define certain terminology as
used herein in the description and claims. Firstly, the term
"gaming" is used to designate elements of the system and method of
the present invention which are associated with, or appear to be
associated with, an online game in which money can be bet and,
depending on the result of the game, a return may be won. More
particularly, the term "gaming" is used herein to refer primarily
to "games of chance", i.e., in which the outcome results from a
process assumed to be random, such as rolling of dice, the dealing
of well-shuffled cards, landing of a ball in a roulette wheel or
the final position of slot-machine reels. Excluded from "games of
chance" in this definition are games based even in part on the
skill of the user, or on the performance of a player, an animal or
a natural phenomenon. In most preferred cases, the games in
question are games generally considered casino games, typically
selected from the group consisting of: Roulette, Slot Machines;
Craps; Baccarat; Sic Bo; and Keno.
[0050] In accordance with the above definition of "gaming", a
"gaming user interface" is a user interface which presents to the
user a game, or simulated game, as defined above and allows the
user to enter an input related to the game. A "gaming input" is one
or more input, of a type suited to the game in questions, which
indicates the user's position for the upcoming game and/or the
user's intent to take part in, or initiate, the game. In certain
cases, such as in a slot machine user interface, the gaming input
may be simply a "start" input which starts the next round of the
game. In other cases, the gaming input may include the placing of
one or more bets on certain particular outcomes of the game.
[0051] The "defined cost" of a given gaming input is the payment or
cost to which the user obligates himself or herself by submitting
the gaming input. Thus, in the case of one or more bets, the
defined cost is typically the total value of the bets placed, give
or take any additional service charges. In the case of a slot
machine, the defined cost will be the fixed cost per round of play.
Similarly, the "set of possible returns" is the set of possible
payouts which could result from possible outcomes of the game for
the given gaming input. The set of possible returns is defined by
the rules of the game being played (or rather, simulated), which
are typically the standard rules for the corresponding game, but
may in certain eases be "house rules", as is known in the art.
[0052] The term "gaming result" is used to refer to an outcome of
the game in question. In the context of the present invention, the
gaming result is a simulated result that is chosen to correspond to
the actual return of the set of digital options. In cases in which
there are a plurality of possible outcomes with the corresponding
return, one of the appropriate outcomes is preferably chosen in an
apparently unordered manner. The phrase "apparently unordered
manner" is used herein to refer to any manner of selecting an
outcome which would offer the user a plausible impression of a
random game result. Thus, the unordered manner may in fact be a
random or pseudo-random selection amongst the group of suitable
equivalent outcomes, or may be selected according to some arbitrary
non-sequential order.
[0053] In the financial transaction aspect of the invention,
reference is made to "digital options." The term "digital option"
is used to refer to an option in which the values of the possible
returns are predefined at the time of purchase of the option. The
most common digital option is a "binary option" in which the return
is either zero or a fixed sum, although the term "digital option"
is used more broadly to encompass the possibility of three or more
predefined possible returns. The digital options employed by the
present invention may be exchange-traded options or
over-the-counter options. Even in the case of over-the-counter
options, the options may be registered securities.
[0054] The digital options employed by the present invention are
typically based on at least one publicly available, continuously
updated underlying financial instrument. The phrase "financial
instrument" is used herein to refer to any financial instrument on
which an option can be based including, but not limited to, any one
or combination of: an index; a single stock; a bond; a currency
exchange rate; a commodity price; other traded securities such as
future contracts, options, etc.; or a specially defined non-traded
index based on any combination of other financial instruments.
Digital options based on non-financial variables also fall within
the general scope of the present invention, although in most
circumstances they are less practical.
[0055] The phrase "publicly available" is used herein to denote a
financial instrument about which information is available via
channels of information available to the public. This includes
information from any source, whether freely available or available
only through commercial subscription information suppliers or other
specialized sources. The phrase "continuously updated" is used to
refer to information which is updated at intervals of no more than
about 1 minute, and with a delay of no more than about 1 minute. In
many cases, real-time financial data is available with updates at
intervals of no more than about 10 seconds and minimal delay behind
real-time market values.
[0056] When reference is made to "short-term" options, this refers
to options having a period of less than one day between sale and
expiration, and preferably less than one day between issue and
expiration. In certain implementations, as will be discussed below,
the present invention may employ super-short-term options for which
the entire lifetime from issue to expiry is less than one
minute.
Details of Method
[0057] Turning now to the features of the present invention in more
detail, FIG. 5 illustrates the main steps of a method, generally
designated 10, according to the teachings of the present invention.
In most cases, a first step of method 10, performed prior to a
first use of the system, is setting up of a brokerage agreement
(step 12) between the user and the service supplier. Since the
inputs of the user during operation of the system are essentially
gaming inputs given in the context of a gaming user interface,
prior authorization is typically needed in order to empower the
service provider to commute the gaming inputs into corresponding
financial transactions and to perform a binding set of financial
transactions on behalf of the user.
[0058] Then, at step 14, a gaming interface is presented to the
user through which the user provides a gaming input (step 16) as
defined above. Then, at step 18, the gaming input is commuted into
a purchase order on behalf of the user for a set of short-term
digital options having substantially the same set of possible
returns as the gaming input, and the purchase order is implemented
(step 20). The purchase order implementation is typically either by
allocating to the user digital options according to the purchase
order which were issued by the service provider, or by transmitting
the purchase order to an external issuer of options. On expiry of
the set of digital options, the actual return is evaluated (step
22) and a corresponding gaming result is presented to the user via
the gaming interface (step 24).
[0059] One particularly preferred but non-limiting implementation
of step 18 is illustrated in FIG. 6A. Specifically, the system
first calculates all possible outcomes of the game round according
to the particular gaming input supplied (step 26). Outcomes having
the same financial value are grouped together (step 28), and may
optionally be sorted, for example into ascending order of payout
(step 30). For each group, a purchase order is generated (step 32)
for an option having a possible return equal to the difference in
value between the previous value of return and the current group.
This procedure will be further understood with reference to a
specific example, as will be set out below.
[0060] One particularly preferred but non-limiting implementation
of step 24 is illustrated in FIG. 6B. Specifically, at step 34, the
system identifies the group of outcomes from step 28 which share a
financial value corresponding to the actual return of the set of
digital options after expiry. Where more than one gaming outcome
corresponds to the actual return of the set of digital options, one
of the appropriate outcomes is selected in an apparently unordered
manner (step 36) for display on the gaming user interface.
Example: Roulette
[0061] The invention may be better understood with reference to the
following specific example of a Roulette gaming interface. FIG. 1
shows schematically a part of a Roulette gaming user interface,
namely, a display of a Roulette table for receiving bets placed in
a round of Roulette. In this case, the user's gaming input is
indicative of a value placed on at least one betting location on
the roulette interface. In the example illustrated here, the user
has placed a five dollar chip on "ODD" and a ten dollar chip on
number "7".
[0062] FIG. 2A depicts the payout for all possible game outcomes
(i.e., the ball falling on each value from "0" through "36"). Thus,
if the ball falls on "0", no payout is due (i.e., zero return). If
it falls on "1", a 2:1 return is due on the $5 only, namely, a $10
return. On "2", zero payout is due. On "3", $10 is due, and so on.
If the ball lands on "7", payment is due on $10 at 36:1 plus the $5
at 2:1, giving a total of $370.
[0063] FIG. 2B shows the same set of possible outcomes as FIG. 2A
rearranged so as to group together outcomes with the same payout.
In the case illustrated here, the groups are arranged in ascending
order of payout, although this is not critical. The proportional
number of outcomes resulting in each value of payout corresponds to
the probability of that payout.
[0064] FIG. 3A illustrates a probability distribution for
variations in an underlying financial instrument over the time
period set for a digital option. FIG. 3B illustrates the
corresponding return function of an Option "A" according to which a
$5 option pays out $10 if the underlying financial instrument ends
up outside the range of -X to X, and zero if it remains within that
range. Option "B" is a second option based on the same underlying
variable according to which a $10 pays out $360 if the underlying
financial instrument ends up outside the range of -Y to Y, and zero
if it remains within that range. The overall set of possible
returns thus parallels the possible returns of the game input as
illustrated in FIG. 2B.
[0065] FIG. 4A illustrates the actual variation of the value of the
underlying financial instrument over the period of Options A and B,
and shows a value on expiry which lies between -X and -Y. As a
result, Option "A" ends up "in the money", paying out $10, while
Option "B" ends up "out of the money" and returns nothing.
Referring back to FIG. 2B, the actual return of the set of digital
options, namely, a $10 payout, corresponds to the set of outcomes
in which the Roulette ball falls on an odd number other than "7".
One such outcome, for example, falling on "19", is then chosen for
presentation to the user. This result is typically presented in the
context of a graphic display depicting the occurrence of the
selected gaming outcome. The debit or credit is then performed to
the user account, which may either be administered by the service
provider or by an independent banking or other financial
institution. The debit or credit may be performed immediately, or
may be implemented at the end of a session.
[0066] In the above example, it will be noted that the outcomes of
the different options are interdependent, reflecting the particular
situation in the game; a result of "7" is always also an "odd"
result. In such circumstances, nesting of multiple options using a
single underlying variable and having the same expiry times is
intuitively appropriate. By following the aforementioned procedure
of grouping all possible outcomes in order of payout, it is
typically possible to construct suitable sets of digital options
based on a single underlying variable for all situations.
Nevertheless, in certain cases where two or more independent
variables are involved in the game represented by the gaming
interface, implementations employing options based on more than one
independent underlying variable may be used.
Option Types and Pricing
[0067] As stated, the preferred implementation of the present
invention uses digital options to provide a set of possible returns
substantially the same as the possible returns of the gaming input.
The digital options employed may be of substantially any type which
provides the required pre-defined set of possible returns.
Particularly preferred are European cash-or-nothing binary
options.
[0068] The option type and strike price(s) or threshold(s)
typically determine a range of prices within which the price of the
underlying instrument should be at the time of option expiration
for the option to be considered in-the-money. Depending on option
type, the price of the underlying must be above a strike price,
below a strike price, within a range defined by two prices or
outside of such a range. In certain cases, other types of
thresholds may be employed, such as, for example, barrier options
where the outcome depends not only on the final value of the
underlying instrument but on whether a threshold was exceeded
during the entire lifetime of the option.
[0069] Offered Options may have their strike prices defined as a
move of the price relative to the quoted price at the time the
option is purchased rather than an absolute value. Similarly, the
expiration time is preferably defined as an interval relative to
the time of purchase.
[0070] In order to be offered to the public in the US, the options
are preferably registered securities and a prospectus of the
options is filed with the Securities & Exchange Commission
(SEC). While exchange-traded options are always registered
securities, over-the-counter options are typically unregistered
since they are considered a private placement. Certain preferred
implementations of the present invention employ a combination of an
over-the-counter option which is registered and offered to the
public. Over-the-counter options are a direct contract between two
parties and do not require a broker or exchange as an
intermediary.
[0071] The system is described here as publishing or offering the
options in advance. This may or may not be required for compliance
with current regulatory requirements. A system with generally
equivalent functionality may be described as generating or writing
customized options in response to the client requests. If a
pre-published prospectus is required, any customization is
performed within the parameters defined in the prospectus as
published.
[0072] A further distinctive feature of preferred digital options
for implementation of the present invention is that they exhibit a
predefined fixed return ratio between its possible returns and its
purchase price. In other words, unlike the conventional approach
according to which the strike price and the possible returns of the
digital option are fixed and the price varies, preferred digital
options according to the present invention have predefined returns
and a fixed price, thereby defining fixed return ratios. The strike
price is the remaining available variable which is preferably
chosen in order to make the fixed purchase price a fair price (to
be discussed below) and/or to provide a probability of each
possible return similar to probabilities of the corresponding
possible returns of the gaming input.
[0073] In order to determine a fair strike price (or
threshold/range according to the type of option), an option pricing
model is used. An option pricing model is a mathematical
relationship between the attributes describing of the option
contract (time, strike price, etc) and its estimated fair market
value. Any conventional option pricing model may be used. One
popular non-limiting example is the Black-Scholes option pricing
model. The pricing model is usually employed in order to determine
the market value. However, in the present invention, the system
preferably employs the model "in reverse" to calculate the option
parameters (specifically, the strike price) required to make the
predefined fixed price of the offered option into a fair market
price.
[0074] The equations describing the model may be solved
(analytically or numerically) for the option strike price as a
function of return. Alternatively, reversing the model may be as
simple as applying it the conventional manner (forward) for
multiple strike prices and choosing the strike price where the
resulting price most closely matches the desired fixed price for
the option yielding the desired return.
[0075] In order to provide a dynamic gaming effect, the period
between placing of the gaming input and receipt of the gaming
result must be kept short, typically to less than one minute, and
most preferably, less than half a minute. In order to render the
synthesized gaming experience readily available on demand, it is
necessary to make available suitable digital options with closely
spaced expiry times. In most cases, suitable exchange traded
options are not likely to be available at sufficient frequency,
even if they were to match the needs of the present invention in
other respects. For this reason, over-the-counter options are
preferred.
[0076] There are typically two approaches to providing the required
digital options. According to a first approach, the set of digital
options are generated dynamically in response to the gaming input.
In this case, the digital options preferably have a lifetime from
issue to expiry of less than one minute. Alternatively, in certain
cases, it may be preferable to provide a pool of pre-published
publicly available options including a plurality of options with
successive expiry times separated by periods of less than one
minute. Suitable digital options are then selected from this pool
on the basis of each gaming input.
[0077] As discussed above, the short-term digital options are
preferably based on short-term variations in an underlying
financial instrument. Since the various markets have limited
trading hours, each underlying financial instrument typically has
dead-time during which there are no real-time updates as to the
value of the instrument. In order to provide the simulated gaming
experience of the present invention over extended hours of the day
(beyond the trading hours of any one market), certain preferred
implementations of the invention are such that, during a first
period of a day, the set of digital options are based on at least
one underlying financial instrument traded in a first region of the
world and, during a second period of the day, the set of digital
options are based on at least one underlying financial instrument
traded in a second region of the world. By switching choice of
underlying financial instrument, it is possible to operate the
system of the present invention effectively around the clock.
System Description
[0078] Turning now to FIGS. 7-9, there is shown a system, generally
designated 100, constructed and operative according to the
teachings of the present invention, for implementing the method of
the present invention.
[0079] Referring first to FIG. 7, in general terms, the system of
the present invention includes a client computer 102 including a
processor 102a and memory storage 102b, and a server computer 104
including a processor 104a and memory storage 104b. Client computer
102 and server computer 104 are interconnected for data
communication via a wide area network such as Internet 106. One or
both of client computer 102 and server computer 104 are also
interconnected, directly or indirectly, to a source of information
about financial markets 108, which may be a service provided by a
financial market directly or any data feed provider which provides
time-varying signals representing the price fluctuations of
instruments traded in one or more market.
[0080] Each of computers 102 and 104 may be implemented as one or
more device of any type of computer capable of performing at least
a subset of the recited functions. Examples of suitable computers
include, but are not limited to: desktop computers; notebook
computers; mobile telephones and PDA's.
[0081] A functional overall representation of system 100 is
illustrated in FIG. 8. Here, system 100 is seen to include a gaming
user interface 110 which typically provides the simulated gaming
display, receives gaming inputs from the user, and presents to the
user a gaming result. Gaming user interface may also include
additional components for implementing an initial user brokerage
agreement authorizing purchase of digital options based upon a
gaming input, and may provide additional user tools and/or a direct
access financial transaction interface in parallel to, or as a
switchable replacement for, the gaming interface. A purchase order
generator 112 typically provides the functions of commuting the
gaming input into a purchase order for a corresponding set of
digital options with substantially the same possible returns as the
gaming input. A purchase engine 114 typically implements the
purchase order generated by purchase order generator 112, either by
transmitting the purchase order to an external issuer of the
digital options (e.g., to an electronic address of a brokerage
house) or by directly implementing the sale if the service provider
is also the issuer of the options.
[0082] Each of these system components can be implemented in any
combination of software and hardware. In one non-limiting
embodiment, the gaming interface includes one or more web component
(for example, .html, Javascript, plug-ins, ActiveX, etc.). The
implementation of any component may be on the server side, the
client side or any combination thereof.
[0083] Turning now to FIG. 9, this illustrates a particularly
preferred client-side implementation of the present invention in
which gaming user interface 110 and purchase order generator 112
are implemented primarily as dedicated software running on client
computer 102. The client side software in this case preferably
performs some or all of the following functions: [0084] Connect to
server 104 via data network 106; [0085] Identify and authenticate
client identity; [0086] Receive details of published Options from
server 104; [0087] Accept commands from user with a variety of User
Interfaces; [0088] Convert user gaming inputs into a request to the
server for an Option or set of Options; [0089] Receive
acknowledgment and status messages and convert them for display in
the User Interface; and [0090] Facilitate registration within the
system, and deposit and withdrawal of funds to and from
accounts.
[0091] In this case, there is also illustrated a preferred option
according to which the system includes a trading interface 116
which provides directly to the user information regarding the set
of digital options, and may allow direct performance of option
purchases and/or other financial transactions by the user. Trading
interface 116 may be provided in parallel to, or as a switchable
alternative to, gaming user interface 110.
[0092] It is noted that any of the embodiments described above may
further include receiving, sending or storing instructions and/or
data that implement the operations described above in conjunction
with the figures upon a computer readable medium. Generally
speaking, a computer readable medium may include storage media or
memory media such as magnetic or flash or optical media, e.g. disk
or CD-ROM, volatile or non-volatile media such as RAM, ROM, etc. as
well as transmission media or signals such as electrical,
electromagnetic or digital signals conveyed via a communication
medium such as network and/or wireless links.
[0093] It will be appreciated that the above descriptions are
intended only to serve as examples, and that many other embodiments
are possible within the scope of the present invention as defined
in the appended claims.
* * * * *