«2 United States Patent Sireau 2 US 7,206,762 B2 Apr. 17, 2007 (10) Patent No.: 45) Date of Patent: sy AND METHOD (73) Inventor: Jean-Yves Sirean, Hong Kong (HK) (73) Assignee: Regent Markets Group Ltd, Cyberjaya (MY) (7) Notice: Subject o any disclaimer, the term ofthis pateat is extended or adjusted uader 35 USC. 1540) by 1176 days (21) Appl. No. 097764,778 46325 4641 46328 32000 Vig 705-400 52004 Lallemant 70093 FOREIGN PATENT DOCUMENTS wo Wossos) ——TI997 wo Woon wip99 WO WODDTIID. KIB OTHER PUBLICATIONS Ext Receives Financial Being Licease, PR Newswire, Feb. 18, (22) Fil: Jan, 17,2001 eae Engen Pal Of, feisty of Een pt eliion 6) Prior Publication Data ‘No. 00 302 $301-1238, jun. 6, 2003, 57 pages. US 20010032169 A1 Oa. 18,200 oe (20) Foreign Application Priority Date Primary Exominr—logishN Patel aoe tosorsao 74) Atornes, Agent, o Frm—Sioel Rives LLP ‘Ape 27, 2000 (GB) 102107 Gy apsTRAcT Gh) we 06g 400 (200601) Blac be nen opener roses oPeable to atcep parame inp bya usr ad eating 1 eu Se TWS/3T; TOSH463; 70526 edolds bet on an aspect of a financial market; and a (58) Field of Clasifaton Seach ae a eee a6s26 ceming a finan ns ‘See application file for complete search history. Rancher ie raped ee aed el 9) References Cited of the parameters input by the user and the dita obtained frm te dit fos US. PATENT DOCUMENTS S709785 A 51998 Rowse 46 80 Claims, 1 Drawing Sheet Un Teminis3 | Fond te 4d ; atte] Haat | ae] Farm] coms commie Newer | (se | csingantine | __[ PSone | am es peesig mie ne be | ‘alba stg Fc 8 commas = Toa cen [ co Sunt Naga ‘oerU.S. Patent Apr. 17,2007 US 7,206,762 B2 FIG. 1 r..Ct™~CSY User Terminals 3 Financial Markets, | I Real-Time Historical Data Feed $ Second Data Communications Network 4 \Data Feed 6 First data Communications Network 2 ‘Payment System 9 Central processing machine 1 Data Storage | [—| Facility 7 I Third Data ‘Communications Network 10 ‘Accounting System 11 “Archival Data Storage Facility 8 Fourth Data, Communications ‘Network 13 Management Terminal 12US 7,206,762 B2 1 BETTING SYSTEM AND METHOD RELATED APPLICATIONS ‘This application cloims priority from European Patent Applicaton No. 003025301, filed Ma. 28, 2000, and UK Patent Application No. 001027017, fed Ape. 27, 2000. BACKGROUND “The present diselosure relates to a betting system and ‘method for buying and selling of fixed-odds financial bets ‘Although betting in maay diverse forms has beea in existence for thousands of years, the concept of a bet onthe futuee performance of one or more financial market indiea- torsisa relatively recent one. Such et may tke ne of two forms, as willbe described. ‘The first form of such a bet (the “spread bet") is one ‘which, ifwon bythe making ofa correc prediction, pays out sum proportional tothe market Muctuation. For instance, a speculator may bet that a given stock will fll within a set period of time, and, if this prediction is corret, may receive ‘Winnings in direet proportion to the amouat by whicl the stock fas fallen in that period of time. ‘The oer form that such a bet may take is known asthe > “digital option". Digital bes are of the same form as a traditional sporting bet in that the speculator predicts a certain event and receives either a fixed sum of winnings iE ‘that event does occur) or no winnings (ithe event doesnot ‘ceur).Forinstanee, a speculator may bet hata certain stock index will rise to a certain level by a certain time. Ifthe ‘named index does reach this level, the speculator wins an ‘greed amount of money inrespective of any amount by \hich the iadex has exceeded the predicted level. It is this, type of bet that i known asa “fixed odds” bet However, problems face the individual investor who wishes to place bots on the financial markets, The wide ‘universe of financial instrments and derivatives products i typically available ony to professional investors who bave the financial resources and know-how to access these pro vt. Problems also face the bookmaker who wishes to offer financial bes tothe private investor. These include the fact that financial bookmaking is labor-intensive, with skilled staff boing required constantly to adapt the dds offered on ‘an immense variety of possible bets to market conditions that are changing on a ssinute-by-minute basis, The average sizeof abet placed by an individval customer ‘will, in general, be very small compared to the average size of atypical stock market direct iavestment. The potential profit 1 the bookmaker from sueh small investment ill, therefore be too small fr it to be evonomically viable to employ skilled staff to calculate the odds to offer to indi- vidual speculators sulfciently quickly. A further problem facing bookmakers is that it is very ificlt to accurately price complicated or unusual bets, nd ‘bookmakers typically offeronly’a few standard bets ona few markets, ‘A need exists for a system and method that alleviates some ofall of the above problems, and which enables a bookmaker eficienly to offer a wide eange of financial bets to speculators wishing to place relatively small bets: SUMMARY. According to first embodiment, a fixed-odds beting system comprises a user terminal openble to accept para x“ 8 s 2 ters, input by a user, relating to 2 fixed bet on an aspect of a financial marke; and a conta processing ‘machine having data feed toa source of data concerning a financial market and means operable to calculate the ied ‘os forthe bet, base om at feast some ofthe paramcters fnput by th user and the data obtained fromthe data feed Aantageously, the user terminal may be operable t receive and display the odds calcolstad by the central processing machine Preferaby, the data fet the source of data concerning the fancal market comprises at leat a dita feed 10 realtime information concerning the financial markt. Con- ‘venient the data fet the source of data concering the financial marke may comprise data fed to historical data concerning the financial market. Advantageously, the data food is connecied to the source of data concerning the financial market over a fst data communications netork Profrably, the fist deta communications networks the lnvemat oa leased line. The cental processing machine ‘ay bave at least one other daa fed Wo a source of data concerning one or moe eter financial markets ‘The wserteminal andthe centel processing machine are preferably connected to one anner via second data communieations network sucha the Interne Convent the sytem muy fer comprise payment system fr dedting payment forthe bet fom the we, he ‘mechanism being linked to the ental processing machine “The payment system for deducting payment frm the user say include an E-cash or crit cir payment system. ‘The system may fuer comprise an secountng system linked to the cenel processing mschine anda management teminal openble provide information reirding the operation ofthe Beting system to an administrator thereo. Advantageously, the parameters for calculating the ods ‘ay include one of more of the following: the relevant financial marke: the amount tha the user wishes tobe or the amount thatthe user wishes to win; and one oF mare ari o target level ‘The system may furher comprise @ storage faiiy for storing information relating to bes. The etal processing amschine prfrably inludes means to retrieve information stored in the storage faciiy, and provide information to a ‘scr cating fo bet proviusy placed hy the see Preferably, the central processing machine ‘includes ‘means to calculate a price at which to ofc to purchase the previously placed bet frm the user and to display the price Calculate by the eental processing machine In another eubodineat, 2 method of operating a fixed cds bting system including a cena proessing machine in communication with a data feed to @ source of dita concern financial navel, and ower ternal in com- ‘munication with the central processing machine, comprises accepting fom a user parameters relating 10 ixo-adds bot oman aspect of fn market receiving one or more of the parameters at the central processing machine; obsining data conceming the financial market via the data fod: and te central processing machine caeulating a fxe-odds ic forthe bet based on at east one af the parameter input by the user and the data obtained from the data fed The metbod may father comprise the steps of displaying the calculated eds to the user and deducting of receiving payment from the wer for placing the bet Preferably, the step of receiving one or more parameters from the user inclodes the step of receiving infomation relating to one or more of the following? the relevantUS 7,206,762 B2 3 financial market; the amount that the user wishes to win oF the amount that the user wishes to bet; ane one or more barrier or anget levels “The step ofobiining data concerning he faancial market ‘may include the step of obtaining real-time data relating to ‘one or more of the following: market prices; option quotes, interest rates and dividend yields, “The step of obtaining daia concerning a financial market ‘may include the steps of obtaining historical data relating to ‘market prices. Preferably, the step of calculating the fxed-ads price ‘comprises the step of calculating an estimate ofthe future volaiity ofthe financial marke. Conveniently, the method may further comprise the steps of ehecking the parameters input by the user for logical inconsistencies therebetween and checking the opening times ofthe financial market Preferably, the method further comprises the step of providing at Teast one other data feed 10-2 source of data ‘concerning ane of more other financial markets. Conveniently, the step of receiving parameters from the ser preferably includes the step of receiving parameters relating to an aspect of the one or more other financial markets vo ‘Advantageonsly, the step of calculating the fixedodds * price for the bet preferably includes the step of calculating concation matrix containing information concerning the ‘nancial market and the one of more ther fsancial markets Preferably, dhe system fuser comprises the sep of pro viding a storage facility, accessible by the central processing ‘machine, for storing information relating to bets, Conveniently, the step of calculating odds includes the step of calculating a hedging factor based on information ‘concern previously placed bets obtained from the storage facility. The method may farther comprise the steps of: (1) calculating, at the central processing machine, a price at ‘which to olfer to buy a previously placed bet fom the user, ana proving the price tothe user via the user terminal In yet another embodiment,» computer program com- rises computer program code means adapted to: receive fone or more parameters from a user relating t a fixed-odds bet on an aspect ofa financial market; obtain data concem- ing a financial market via a data feed, and calculate a fixed-odds price for the bet based on at lest one of the parameters input by the user and the data obtined from the data feed, The computer program may be embodied on a computer readable medium or otherwise operable on a compute, In sill another embodiment, central processing machine having a data feed toa source of data concerning 2 financial :matket is operable to calculate fixed os, based on param ters input by a user and data obtained fom the data fed Conveniently, the data feed to the source of data concem- jing the fizancial market may comprise a data food to real-time information concerning the financial market, Advantageously, the data feed to the source of data ‘concerning the financial market may comprise data feed to at least historical data conceming the financial market Preferably, the data feed is connected to te souree of data concerning the financial market over a first data communi cations network such asthe Internet oF 2 leased line. ‘Advantageously, at least one other data feed may be provided tea source of data concerning one oF more other Tinancial marks, ‘The central processing machine may’ further comprise 3 storage facility for storing information relating to bets s 4 ‘The central processing machine may aso have means to caleulate a price at which to offer to purchase a previously placed bet from the user. Advantageously, the central processing machine may further comprise a management terminal operable to display information regarding the operation of the betting sytem to ‘an administrator thereo. Additonal characteristics and advantages will be appar- cnt trom the following detsiled description of prefered embodiments which proceeds with reference to the aecom- paying drawing, BRIEF DESCRIPTION OF THE DRAWING FIG. 1 shows a schematic layout ofthe components ofa ‘rating system in aecordance with 2 prefered embodiment othe present invention. DETAILED DESCRIPTION OF PREFERRED. EMBODIMENTS, With reference to FIG, 1, a central processing machine 1 cof a betting system in accordance with a preferred embodi- ‘ment comprises a server running a server operating system A computer program embodying an aspoct of the beting system is loaded onto the cental processing machine 1, a8 will be described in greater detail bel. The central pressing machine 1 is linked vi a fist data ‘communications network 2 oa plurality of wer teinals 3. Preferably, the fist network 2 is the Internet. The user terminals comprise PC's, or other suitable machines, ran fing an appropriate operating system to interlace” with prospective customers, for inslance a Windows or UNIX {ype operating system, “The centeal processing machine 1 is further connected via second dita communications nesvork 4 1 two data feeds, ‘one of which isa data feed § toa source of realtime market information, and the other of whichis a data feed 6 to a source of historical market information. Preferably, the sacond network 4 s the Internet or a leased ine. Examples of real-time market quotes data feeds are those provided by financial information providers such as Reuters, Bloomberg, ‘Bridge, DBC, etc. The primary requirement for this data ink is that it shouldbe real-time, which isto say thatthe quotes, retrieved via the data Tink are up-o-thesecond realtime market quotes. ‘The betting system of FIG. 1 further comprises a data storage facility 7, comprising a file server operable to store information conceming placed, pending and expired bets on ‘one of more disks. The data storage facility is connected to anatchival data storage fcilty 8, which is operable to retain information oa a plurality of apes or oer long-temn storage medi The betting system inchodes an E-cash or ereit card ‘payment system 9, which is inked tothe central processing ‘machine I by a third data communications aetwork 10, Aa accounting system 11 is also included in the betting system, this accounting system being direty linked to the een processing machine 1 ‘A management ternal 12 also comprises part of the betting system. This management terminal 12s linked tthe central processing machine I via a fouth data communica tions network 13, which is preferably th Internet Tn operation, an individual users able to log on tow user terminal 3 for the purpose of placing a fixed-ods financial bet. user-id and password, provided (othe individual by the administrator ofthe betting system, may be required toUS 7,206,762 B2 5 4 so. In practice, the user terminal 3 may comprise a edicated temninal in a public betting fecilty, or may alternatively comprise the user's own PC. ‘When the wser attempts to log on to the betting system at the user terminal 3, the user terminal 3 connec to the central processing machine 1 via the first network 2. Ifa password is raquired, the password must be accepted by the central processing machine I before the user is allowed to log on to the betting system, “The user is now able to place a fixed-odds financial bet using the betting system. The user teminal 3 presents the user with a suitable interfoe for doing so, this interface ‘comprising & numberof menus othe lke through which the ‘user may navigate to glean information or select bet param ers. Bet parameters thatthe user may select may include, among other: the financial marke(s) upon which the bets to be based (for instance a foreign exchange rate); the ‘amount thatthe user wishes to bet or the amount that the user wishes to win; or one or more baricr or target levels (cating to market performance) which seta threshold for the financial market parameter being monitored, Once the ‘bet parameters are devided upon hy the user, these param fers are submitted tothe central processing machine I via the frst network 2 “The fist step performed by the ceatml processing ” ‘machine 1 upon receipt of the bet parameters fom the user terminal 3 is to ascertain whether or not the bet defined by the bet parameters is within reasonable reach of current ‘market prices. In order to decide whether or not this isthe case, the central processing machine 1 gathers information concerning the current markt prices fom the data fed $10 the souree of real-time market information. If the data derived thereftom indicates that there is na realistic possi= bility ofthe market price changing with the rapidity required by the bet, then the central processing machine 1 will reject the bet [Next the bet parameters put by the user are checked by the central processing machine 1 for logical inconsistencies, and the bet is rejected if'such inconsistencies are found 1 be presen. For instance, if @ user has input bet parameters defining a bet that a certain financial index will remain ‘erwoen a high value of 110 and a low value of 120, the central processing machine 1 will determine thatthe het is logically inconsistent and reject te bet. A further step performed by the central processing machine 1 on receipt of a set of bet parameters from user terminal 3 isto check the opening times of the relevant financial markets. The cetral processing machine 1 has, for ‘his purpose, a link oa source of information containing the ‘opening hours and public holidays of all ofthe markets upon which bets are offered. Ifa user is allowed to et upon the performance of a market during @ period for which that ‘markets closed he user gains an uafir advantage and thus such a bet would be rejected Once it as been established by the eental processing ‘machine I thatthe bet parameters input by the user define 3 valid bet, the next step isto determine the real-time ra ‘market valves from which to calculate the price of the bet. Inorder todo ths, the centeal processing machine | accesses the data foed Sw the source of real-time market information, ‘The data derived thereftom may include current market prices, option quotes, interest rate levels, dividend yields (in the case of stocks or stock indices) or carving casts (e., storage, delivery or insurance costs inthe case of commod ties) The central processing machine T may also access the data feed 6 to the source of historical market infomnation, s 6 and the data gathered therefrom may include historical closing prices for the relevant markets (Once a set of valid bet parameters have been received by the conta processing machine 1 and the relevant infoma- tion has been gathered from the data feeds 5,6, the central processing machine 1 uses the information to caleulate the ‘dds that willbe offered to the user forthe bet. ‘The first step in the process isto calculate the implied volatility ofthe or each market ypon which the bets based ‘The volatility ofa markets defined as the amount by whieh the market fluctutes during a given period, and is often defined as the annualized standard deviation of the natural Tgarithm ofthe price retums ofthe dey closing values of the market ‘The implied volatility is the market volatility thatthe listed options market implies forthe fiture, market volatility being a major fctor in the determination of the price of an ‘option. Ifthe price of the listed options relating to a given, ‘market for a piven time period is known, this FIGURE can ‘oe reverse-engincerd to calculate the future volatility of the ‘market implied by that option pice, Various techniques exist for this reverse engineering operation, the most comatoaly vwsed of which is an algorithm based on the Black and Scholes option priciag model, however the skilled person will ealize that any of several alternative algorithms may be sed instead ‘A standard option priciag model such as the Black and Scholes model assumes thatthe facial markets fallow a {og-normal dstibution. This assumption does not, however, accurately reflect the market panies (like the 1987 stock ‘market crash), which occur witha higher requency than ‘would be expected in a purely lognormal distribution. To adjust forthe “fatter tls" ofthe real distribution of market returns, the concept of “volatility smile” is introduced, ‘whereby options with diferent strike prices trae at diferent implied volailities. Options wit different expiry dates also trae at different implied volatilities, reflecting diferent expectations of markot volatility over differen ime poriog Since there wil likely not be any option with exactly the sume expiry date and target price as the bet, interpol ‘ill bused to arrive a the best estimate ofthe voat the bet To calculate the volatility to be used to price the bet, options prices are gathered from the data feed § to the real-time source of market information. The implied vola- lites ofthe options with strike prices closest othe bartier for target level ofthe be, and with expiry dates closest tothe ‘expiry date othe bet, ae computed, These implied volatility poiuls are then interpolated oareve atthe implied volatility ‘most appropiate for the expiry date and barrier or target level ofthe bet (if the bet has several barir or target levels, the Kevel that will lad tothe highest selling price for the bet ‘may be nsed) This interpolated implied volatility is used by the central processing machine Ito calculate the odds forthe bat Tis also necessary for the cental pressing machne 1 to take into account the grow of the market oF markets in question. In order to derive this valu, the intrest rate and ‘other components of the carrying cost for each market (extracted from the data feed $ to the real-time source of ‘market information are required. For stocks or stock indi- 2s, the growth ofthe market is typically approximated as ‘being te interest rate minus the annualized dividend vio Ina similar manner to that deseribed above, the interest ite for an arbitrary time period may be estimated by interpo- lating between the deposit rates for earlier and later matu- ‘ie o arrive at an appropriate value. For foreign exchangeUS 7,206,762 B2 1 ‘ates, the grow rates defined as the diference between the {epost rats in each currency and for other markets such as commodities, the growth rate incorporates factors such as storage or dlivery costs, and insurance fees A complex bet may involve predictions on the perfors s smanees of several diferent markets, and if such a bet is placed then correlation muti for these different markets will need to be computed. Such a conlation matex is computed by calculating te correlation coefiients of the relevant markets over a period of historical data cbtained_ 10 from the data feed 6 t0 the source of historical market information. Ideally, this time period isin proportion to the Tength of the bet Once all ofthe necessary information has been gathered ‘or computed by the ceatral processing machine 1, the cena processing machine I proceeds o calculate the odds forthe bet defined by the bet parameters, There ae various ways in \which this may be performed for each type of bet that might. be placed by the user. Common bets that might be placed include: ‘an “upidown" bet that a given market will be above oF below a given level on a given date; ‘an “expiry range” bet tata given markot will be between two given levels ona given date a “rainbow” bet, which is essentially a mulkimarket > expiry range bet; ‘a bullseye” bet that a given market will have an exactly sven value on a given date: “one-touch” bet that a given market will touch a given barrier level at some point before the expiry of the bet, “noctouch” bet that given marke wll ot tonch a given barrier level at any point before the expiry of the bet, ‘a“range” bet that a given market wil touch neither of wo ativen barier levels at ny point before the expiry ofthe bet “double onetoveh” bet that a given market will touch both of two given barrier levels at some point before the expiry ofthe bet: a “win”, “place” or “show” bet that a market will be respectively the best, or within the top two best, oop three ‘ost, performing markets (in percentage tems) over a given period; and ‘a “quinella”, “tierce” or “extota” bet defined from their rctrack equivalents. An example of how the price of an expiry range bet might be caleuated is as follows ‘The formula forthe underiying asset price S is given by: aS-mssie 8 where ms the grow rate, sis dhe volatility, tis time and isa variable that follows a Wiener process. The variable 7 ‘can be understood by considering the changes in the value thereof over small intervals of time. Consider a small interval of time having a duration of dt and define das the change in during dt. There ae two basi properties that dz ‘must have for2 to he following a Wiener process: dz must be related to dt by the equation where € isa random drawing from a standantized normal istribution (Le, a normal distibution with a mean of 270 and a standard deviation of 10), and the values of dz, forany to diferent shoe intervals of time dt, must be independent. Solving this equation, we obtain « SiS eager d¥4e00) 8 ‘where S( isthe asset price at ime tan S isthe initial asset price Lot p be the probability of success ofa bet in this model at ‘expiry time t, Te present value ofthis bet thn hecome: Prescre where Ps the present value (oF fair price) of the bel isthe interest cate, and ti the time to maturity. We denote: slo and ‘whore S(t) is the asst price atime isthe time to maturity, S is the intial asset price, r is the interest rate, g isthe dividend rate ands is the volaiity. ‘Then, he variable x is defined as Xow and is normally distributed with probability density: mde tw eat woe fie where N(x) is the cumulative probability of the normal distibution, Let S be the inital market price, and let eee) ‘where UT and D are the up and down bartiees of the bet respectively. The peice of the expiry ange bet, defined by U and D, is then given by: Gebel Other formulae for different types of bets may realy be derived by emplaying the same principles, The type of forma employed is also not essential to the working ofthe system—many different methods of caleulating odds exist, fad any ofthese may’ be use ia the system,US 7,206,762 B2 9 (Once the price ofthe bet defined by the bet parameters input by the user is determined, a house mark-up is added ‘and the bet is offered to the user via the user teminal 3, Since te systom operates on real-time values derived from the constantly fluctuating markets, the customer is allowed only a shoct time in which to decide whether or not to purchase the beta the calculated price. This time period is, preferably, no more than thisy to sixty seconds, andthe olfer 4s withdeawn after this time. the user decides vo purchase the bet, he or she will be prompted to input a username and password (if these were ‘ot input at an earir stag). This information is verified by the central processing machine 1 and i itis accepted, will, check the credit balance of the user onthe accounting system, 11, If this reveals that the user has sufficient funds 10 purchase the bet, the transaction with the usr i effected nd the bet is recorded on the data storage facility 7. Fach user ofthe system may, on entering his or her valid ‘username and password, view a ist of oustanding bets that he or she has placed ona user terminal 3. In onder to provide this list the central processing machine 1 recieves infor. ‘mation regarding the user's previously placed bets from the ata storage facility 7. The central processing machine 1 snus, for each previously placed bet, determine whether the bet has: already expired or flilled the conditions ofthe bet. 0 thatthe user has won the bet; sleady expired or cont ‘vened the conditions of the bet so that the user has lost the bets or has aot yet reached the date or conditions af expiry. ‘The central processing machine 1 derives this information ‘by comparing the bet parameters with both real-time market information and historical market information for the rel. ‘evant time period obtained via the data feeds 8, 6, The status ‘of each previously placed bet is passed tothe ser terminal 3 for display to the use. IFthe user has won any ofthe bets, the central processing machine 1 insiicts the accounting system IT to credit the user's acconnt accoedingly ‘The system may also be provided with a facility to offer to buy an unexpired bet back from the user. The price that. is offered for a bet is calelated by fist determining the value ofthe bet using similar techniques to those desrbed 40 above, witha house mark-up being included in the price. As eseribed above, the user is given no more than thiety to sixty seconds to decide whether or aot to aecept the price offered before the offer is withdrawn. All of the wansactions between the senttal processing ‘machine 1 and the users ofthe system may be monitored by an administrator of the system athe management terminal 12. This facility allows the administrator to ensure that the system is running smoothly and thatthe algorithms and/or ‘models employed by the contal processing machine 1 are producing appropriate resus ‘Asa frther consideration, the administrator of the system, :may’be concemed about his or her financial exposure athe system may accordingly include means to inform the admin istrawr, in real-time, of the financial exposure via the ‘management terminal 12. This facility allows the adminis- trator to “hedge” in the futures and options markets, There are four types of hedging ratio commonly used, namely the ela, theta, gamma and vega hedging ratios. These ratios, along with the appeopriate hedging echnigues, are well ‘known in the ar. In an altomative embodiment, the E-cash or credit card payment system 9 is replaced by a system that operates with, “viral” or “fantasy” money instead of real fund. In such an embodiment, betors are allocated an initial amount of “fantasy” money to purchase bets, Suevessfl bettors ave the chance to win prizes or ober benefits 10 As a further consideration, whether or not the payment system comprises real or fantasy” money, the administrator of the system may wish 10 ack the bettors who are consistenily successful at forecasting the direction of the 5 financial markets, The wministator knows that under the assumption of efficent markets, no person may consistently forecast the financial markets, and therefore succesful et- tors are simply those that have beea suocessfl by chance However, tracking successful bets may provide useful 10 information forthe administrator, such as useful elves for ‘wocking down problems with this embodiment. The admin istrator may also sell or provide the information comprised ofthe ongoing bes of the sucessful bettors, o third partes ‘who may choose to use or rely upon this information onthe 1 elif thatthe succesful bettors have a special gift rather than being simply lucky. ‘The betting system for caleulating the fixed-price odds that may be offered to a prospective bettor is particularly ‘well-suited to bets placed on the financial markets since the 2 calculation of fixed-price okl is suliciently dial, time consuming and computationally intensive o make caleula- tion thereof by humans inefficient forall but the largest of bots. The systom described herein allows an administrator of the system to offer reasonable and well-alculated odds in reabtime to individual speculators beting small sums of ‘money on an almost unlimited number of eventualites, ‘without the need o employ highly-skilled staff to do so, This servie has not been available in the past will be obvious to those having skill inthe at that many ‘changes may be made to the deals of the above-described cembodiments without departing fom the underlying pein- ciples theroof, The scope of the preset invention should, therefore, be determined only by the following claims, “The invention claimed is: 1. A method of operating a fixed-odds betting system including a cena processing mochine in communication wit a data feed o a soure of data concerning a financial ‘market, and a user terminal in communication with the central processing machine, the method comprising the steps of Via the user terminal, accepting from a user multiple parameters relating toa ixed-odls hot on an aspect of ‘financial market: at the central processing machine, receiving one of more of the parameters from the user terminal; atthe central processing machine, obtaining data coacem- ing the financial market via the data feed; at the central processing machine, calculating a fhxed- fodds price for the bet based on at least one of the parameters ceived from the user terminal and the dsta obtained from the dat feed; and communicating the fixed-odds price to the user. 2. A method according to claim 1 further comprising displaying the calculated fixed-ods price to the user. 3. A method according to claim 1, father comprising: receiving an authorization from the user to place the bet ‘and receiving a payment from the user foe placing the bet. 4, A method according to claim 1, futher comprising: placing the bet; and crediting an account ofthe user in response to uctation of said aspect of the fiancial market satisfying the parameters ofthe bt. 5, A method according to claim 1, wherein the step of obiaining data concerning the financial market includes biasing eeul-time data sUS 7,206,762 B2 aT 6.4 method according to claim 1, wherein the step of obiaining data concerning a financial market includes oblaiaing historical data representative ofa history of mar et prices. 7. A method according to claim 1, wherein the sep of $ calculating the fixed-odds price comprises calculating an estimate of a future volatility of the financial marke. 8. A.method according to claim 7, whercin: the sep of obtaining data concerning the financial market inlides obtaining real-time data concerning the finan- cial marke; and the step of caleulating the estimate ofthe fature volatility ‘ofthe fmancial market is at eat partially based on the realtime data 9, A method according to claim 1, futher comprising: befor: calculating the fixeddds price, checking the parameters input by the user fr logical inconsistencies therebetween, 10. A method according to claim 1, further comprising: ‘before calculating the fxed-odds pice, checking an open ing time of the fnaneial market 11, A method according to claia 1, wherein the central processing machine is in communication with, ‘a second dala ead to a source of data concerning a second financial market different from the financial * market and the step of receiving parameters from the user terminal includes receiving parameters relating to an aspect of the second financial market. 12. A method secording to claim 1, wherein: the ceatral processing machine i in communication with 1 second data food to a source of data concerning & second fnancial market different from the financial smarket; and the step of caleuating the fixed-adds price for the het includes calculating a conelation matrix containing information concerning the financial market and the second financial market 13. A method according to claim 1, wherein the system further includes a data storage facility accessible By the central processing machine, and furter comprising storing in the daa storage facility information eating to previously placed bes 14. A method according to claim 13, fuer comprising reading from the data storage failty the stored information relating to previously placed bets, and wherein the step of caleulating the fixed-odds price for the bet includes ealeu- lating» hedging factor based on te information concerning previously placed bets read from the storage facility 15, A.method according to claim 13, futher comprising: at the central processing machine, calculating a price at which to oll to buy one or more of the previously placed bets 16. A method according to claim 18, further comprising providing the price to the user via the user termi 17. Amethod according 1 claim 1, wherein the financial ‘market includes a foreign cureney market. 18, A method accorting 1 claim 1, wherein the financial market includes a commodities market 19. A method according t claim 1, wherein the financial ‘market includes a stock market 20, A method according to claim 1, wherein the aspect of the financial market includes change ina market index. 21. A method according to claim 1, wherein the aspect of the financial market includes a change ina stock price x 8 s 12 22. A method acconding to claim 1, wherein the aspect of ‘he financial market includes a change in a foreign currency exchange ete 23. A method acconling to claim 1, wherein the step of receiving one or more parameters from the user terminal includes receiving an identifier of a selected financial mar et 24, A method acconling to claim 1, wherein the step of receiving one or more parameters from the user terminal includes receiving information regarding an amount thatthe ser wishes to win, 25, A method acconling to claim 1, whercin the step of receiving one o more parameters from the user terminal includes receiving 2 target level ofthe aspect of te financial market. 26. A computer program embodied on a computer read able medium and operable on a central processing machine in communication with a data fed, for: receiving one or more parameter from a use relating 10 a fixed-odds bet on an aspect of financial market; obtaining dota conceming the financial market vi the data foods calelating fixes price for the bet based on at least ‘one of the parameters received from the user aud the data obiined via the data feed; and communicating the fixed-odds price to the user. 27.8 computer program according to claim 26, whercia the step of calculating the fxed-ods price comprises cal~ culating an estimate of a fiture volatility of the financial market 28. A computer program according to claim 27, wherein: the data feed includes a realtime data feed: nd the step of obtaining data concerning the financial market includes obtaining real-time data conceming the finan- cial market via the data feed; and the step of calulating the fixed-odds price is atleast, partially based om the real-time dat 29. A fixed-odds betting system comprising: ‘means for accepting bet parameters from user relating 0 a fixed-ods bet on an aspect of financial market; means for obtaining financial market data; means for calculating a ixed-ods price forthe fined-odds bet based on at least one ofthe bet parameters from the user and at least some of the financial market data obtained; and means for communicating the fxed-oclds price to the wer. 30. A fixed-odds beting system according to claim 29, ‘wherein at least one of the bet parameters is @ predicted performance of an aspect of the financial market and further comprising. means for calculating. a fixed odds for the predicted performance ofthe financial market 31. A fixed-odds beting system aecording to claim 30, wherein the predicied performance includes a predicted ‘Muctuation of the aspect of the financial market during abet period of the bet. 32. A fixed-odds beting system comprising: ‘user terminal operable to accept from a user multiple parameters relating toa fixed-ods bet on an aspect of a financial market; 1 data feed to a source of data conceming the financial market and ‘central processing machine in communication withthe ata fee aad the user ternal, the central processing ‘machine operable to calculate fxed-odds price forthe fixed-odds bet based on at Least one of the parameters ‘input by the user and data obtained fom the data feed.US 7,206,762 B2 13 33. A system according to claim 32, wherein the data feed includes a real-time data food to a source of real-time data ‘concerning the financial market 34. Asystom according to claim 32, wherein the source of data conceming the financial market includes a source of historical data eonceming the finaacil market. 35. A system according to claim 32, wherein the central processing machine isin communication with the data feed ‘over a data communications network. 36. A.ystem according to claim 32, further comprising a sevond data feed to a source of data concering a second Financial marke different from the fsancil market. 37. A sysiem according to claim 36, wherein the central processing machine is operable to compute a coalation ‘matrix for the financial market and the second financial market. 238. A system according to claim 32, wherein the central processing. machine is in communication with the user terminal over a data communication network. 39. A.gystem according to claim 38, wherein the central processing machine serves an interface to the user terminal, And the user teminal is operable to display the interface to the user for facilitating input ofthe parameters. 40. Asystem according to ela 39, wherein the interface includes set of menus from which the user ean select at least some of the parameters, 41 Asystem according to elsim 32, further comprising data storage fxility aocessible by the central processing ‘machine the data storage fality operable for string iafor- ‘mation regarding previously placed bes. 42, A ystem acconding to claim 32, futher comprising snultiple other user terminals in communication with the central processing machine for accepting bets from other users, and wherein the central processing machine is oper- able to identity one or more successful users whose bets are consistently success 43. \ system according to claim 42, further comprising means for proving toa third party information concerning bets placed by one or more ofthe succesful users. 44, system according to claim 32, further comprising 8 faciity for buying hack the fixed-odds bet from the usr. 45. A system acconling to claim 32, fuer comprising a ‘payment system in communication with the central process- ing machine and configured to reeive a payment from the user forthe Hixed-odd pice. 46. Asystem acconting fo claim 32, futher comprising an accounting system inked tothe central processing machine 47. Asystem according to claim 46, wherein the ac {ng gystem maintains an account forthe user and ered the ‘account in response to fuetustion of said aspect of the financial market satisfying the parameters of the fixedodds bet 48. A computerimplemented method for beting on a ‘nancial market, comprising: presenting an interface including a set of memus for facilitating selection ofa set of parameters fora bet; receiving the set of parameters from a user via the imerface; obtaining financial market data conceming the finsocil market caleulating a fxed-odd price forthe bet based on the se ‘of parameters received from the user and ut least some of the financial market data offering the bet to the user forthe fixed-odds price: and receiving from the user an acceptance ofthe oller and a paymeat of the fixed-adds price, 8 s 14 49. A method according to claim 8, wherein the finan market includes a foreign cureney market 50. A method according to claim 48, wherein the financial ‘market includes a commodities market. 1. Amethod according to claim 4, wherein the financial ‘market includes stock marke 52. A method acconling to claim 48, wherein the set of parameters includes a change in a market index. 53. method acconling to claim 48, wherein the set of parameters includes a change in a stock price 54. A method acconling to claim 48, wherein the set of parameters includes a change ina foreign curency exchange rte. 58. A method acconling to claim 48, wherein the set of parameters includes a selected financial market, 56. A method acconling to claim §8, wherein the set of parameters includes: ‘target fr the selected financial market: 1 second selected financial market; and ‘target fr the second selected financial market 57. A method according to claim 86, wherein the step of calculating the fixed-odds price fr the bet includes ealeu- lating correlation matrix for the selected fiaaacal market and the second selected financial market. 58. A method acconling to claim 48, wherein the set of parameters includes a bot period, 59. A metho! acconting.to claim $8, wherein calculating te fixed-odds price comprises estimating a future volatility of the faancil market during the bet period 60. A method acconting to elim 48, wherein the set of parameters includes a bet expiration time: ‘61. A method accondingto claim 60, wherein calculating the fixed-odds price comprises estimating a fue volatility of the fmuncial market for @ period preceding the bet expiration time, 62. Amethod according to claim 48, wherein the financial ‘market data ineludes real-time market data 63. Amethod according to claim 48, wherein the financial ‘market data includes historical market data 64. method acconling to claim 48, wherein the set of parameters includes a target for an aspect ofthe financial market 65. A method acconting to claim 64, wherein the target includes a range. (6. A method acconting to claim 64, wherein the target includes a hair 67. Amethod according to claim 64, wherein the finan ‘market includes @ foreign euerency’ market and the target includes a predicted currency exchange rate 68 A method according to claim 64, wherein the financial market includes a stock market and the target includes a predicted stock price, 69, Amethod according to claim 64, wherein the aspect of the financial market includes a market index. 70. A method according to claim 69, wherein the financial ‘market includes a commodities market. ‘TL-Amethod according to claim 69, wherein the financial ‘market includes a stock mack. 72. A method according to claim 48, futher comprising ‘monitoring the financial market; and in response to the financial market meeting the set of parameters, providing a et payollt the ser. 7B. A method acconling to claim 72, wherein the set of parameters inludes abet period and the step of monitoring ofthe financial market ineludes obtaining market data for the bet periodUS 7,206,762 B2 15 74. A method according to claim 48, whersin the step of offering the bot to the use involves offering the bot to the ser fora limited time. 78. A method according to claim 74, wherein the limited time is between 30 seconds and 60 seconds. 6. A method ccordng to claim 48, whecn: the financial market has a growth rate; and the step of calulating the fixe-odds price is at least partially based on the growth rate 7A method according to claim 48, wherein the bet has ‘bet expiation time, an, after rceiving the acceptance and the payment from the user and before the het expiration ‘ime, further comprising: calulating a cureat value ofthe bet; and offering to buy the bet from dhe use fra price based on the Value ofthe bet. 16 78. A method according to claim 48, futher comprising: storing information conceming the bet and one or more other previously-ploced bets; and calculating a hedging factor based on the bet and the 5 previously-placed bets. 79. A method according to claim 48, further compising: storing predictions made by multiple betors: ‘comping te predictions o outcomes of events to which the prodictions relate; and identifying at least one successful bettor whose predic- tions ar consistently similar to the outcomes 80, A method according to claim 79, further comprising offering toa third party information comprising subsequent predictions made by the atleast one succesful bettor