MXPA99002501A - Apparatus and process for transacting an expirationless option - Google Patents

Abstract

A system and process for use in transacting an expirationless option on a particular asset. A user using a video display (220) is prompted to input data representative of a particular asset, the option type, an exercise price, the current price, the historic price volatility and the margin requirement for the particular asset. These data may be also obtained from a data source (130) and are later stored in a storage medium (250 or 350). These data are used in an algorithm for obtaining the option premium data for use in transacting the expirationless option.

Description

APPARATUS AND PROCESS FOR CARRYING OUT TRANSACTIONS WITH A NON-EXPIRATION OPTION BACKGROUND OF THE INVENTION Technical Field The present invention relates generally to an apparatus and process for performing automatic transactions with a non-expired option for use in various markets, such as merchandise or securities markets. DESCRIPTION OF THE PRIOR ART An "option" is generally used to protect against a risk by the right to acquire or sell a good or another asset later at a set price with limited obligations. An option is similar to an insurance policy insofar as it assures the acquisition or sale of an asset later at a price established in counterpart for the payment of a premium, frequently known as an option premium, which is generally a relatively small percentage. of the current value of the asset. A first type of option, known as the "cali" option (purchase option) in the stock market, provides the option buyer with the right, but not the obligation, to acquire a particular asset subsequently at a guaranteed price, often known as the "exercise price". A second type of option, known as a "put" option (put option) in the stock market, provides the option buyer with the right, but not the obligation, to sell a particular asset subsequently to the strike price. (The option of "sale" can be considered as giving the holder the right to "sell" the title in the name of another person at the exercise price). In any case, the seller of the purchase option or of the put option has the obligation to carry out the associated transactions if the buyer chooses to exercise his option. For many years, options have been used in several asset-based transactions. For example, in the commodity market, commodity producers (eg, farmers) frequently enter into option relationships with users of commodities (eg, manufacturers) and speculators; In the real estate market, real estate owners frequently enter into option relationships with real estate buyers; and in the securities market, security holders frequently enter into option relationships with securities buyers. In an illustrative example for the merchandise market, a user of a commodity (for example, a cereal manufacturer) who thinks that he will need a certain amount of particular commodities (for example, corn and wheat) later (for example in six months) ), you can purchase a "buy" option from a speculator. In counterpart, the speculator receives the option premium for its obligation to obtain and sell the established amount of corn and wheat at the exercise price six months from the date on which the option was granted. Therefore, if the price of these goods increases in the six-month period, the cereal manufacturer will probably exercise the "buy" option and obtain the established amount of goods from the seller at the guaranteed exercise price. Therefore, by paying the option premium before knowing the real value of the goods six months later, the cereal manufacturer can save a substantial amount, especially if the price of corn or wheat increases substantially in the six-month period due to several factors (for example, bad weather). Obviously, if the price of these goods does not reach the exercise price in the six-month period, then the cereal manufacturer will simply not exercise his option and will buy the goods in the open market at the price then in effect. On the other hand, farmers who plant their fields many months before having a merchandise ready for supply and who wish to guarantee an established price for their merchandise in the future may acquire a "sale" option from a speculator. Here, if the price (value) of the farmer's goods goes down during the established period of time, for several reasons (for example, exceptionally good harvests between farmers), in counterpart for the payment of the first option, the farmer is guaranteed who will receive an established amount of minimum income for his efforts, from the speculator. The most frequent use of options is in the stock market, where millions of options are typically handled daily. In the stock market, investors can protect themselves against risk related to investing in securities associated with company shares, bonds, merchandise, real estate and other assets. It is important to note that the common denominator among the various systems of the prior art for carrying out transactions in asset-based options is that it can only carry out transactions with options that mature after a certain period of "time". In other words, the purchaser of the purchase or sale option that employs the prior art systems to handle their transactions with options has only the right to exercise its option before it expires or on the due date. As illustrated in Figures 8-11, for an established period of time, an option handled using a prior art system has a certain value associated with said option according to the type of option, the current value of the asset in relation to the price. of exercise and other variables. However, after the expiration of the option, an option acquired, as shown in figures 8 and 9, has no value which causes an option buyer who may have owned a valuable option one day to be the owner of an option. option without value the next day. Furthermore, not only the option has no value, but the buyer of the purchase or sale option is no longer protected against future price fluctuations associated with the asset. On the other hand, as shown in Figures 10 and 11, a sold option, which may fall in value, is automatically raised to the value of the option premium and removes all future risks for the option seller after the expiration of the option. Ignoring the effect of "time" and other nominal costs associated with transactions with options, the value of the options on the shares of Coca-Cola can increase or decrease based on the current price of the shares. For example, if the current stock price rises from $ 50 to $ 54, then the value of the purchased purchase option (figur 8) will increase because it is more likely to be exercised at the strike price of $ 55 per share. action. In addition, if the current price of the stock rises to '60 dollars, then the value of the purchased purchase option will increase even more because the owner of the purchased purchase option will now be able to buy the Coca-Cola shares at the price of exercise of 55 dollars and sell them at the price of 60 dollars in the open market, which will result in a profit of 5 dollars per share. In addition, the value of the purchase option acquired will continue to increase if the current price of Coca-Cola shares continues to increase more and more. Therefore, to the extent that the current price of the asset (Coca-Cola shares) continues to increase, the gains related to the return on investment for a buyer of a purchase option are unlimited. However, as can be expected, the opposite is true in the case of the seller of the put option (see figure 10) insofar as the losses attributed to the seller of a call option are unlimited. On the other hand, continuing to ignore the effect of "time", if the current price of shares drops from $ 50 to $ 45, then the value of the purchased purchase option decreases because it is less likely to be exercised in the exercise price. of $ 55 per share. furtherIf the current price of the stock continues to fall, the purchase option acquired is less likely to be exercised. However, unlike the previous situation where the value of the purchased purchase option continues to increase as the current price of the shares rises, in the case of a purchase option "acquired associated with an asset that decreases in terms of its value, the maximum loss associated with return on investment is limited to the option premium (in this case, $ 5 per share). Again, the seller of a purchase option gets exactly the opposite results to the extent that the gains made by the seller of a purchase option are limited to the option premium With reference to figures 9 and 11, the buyer and seller of a put option, respectively, can perform similar but opposite results, using a system of the previous technique to carry out transactions with options, here, considering that the investor P acquires an option of sale of investors that sell the sale option. Coca-Cola shares with an exercise price of $ 45 to six months in counterpart for a first option of $ 5 per share. Here, ignoring again the effect of "time and other nominal costs", if the value of the shares of Coca-Cola drops to $ 46, then the value of the put option purchased (Figure 9) will increase because it is more likely that is exercised. In addition, if the value of the shares continues to fall to $ 40, then the value of the put option will be further increased because the owner of the put option may obtain shares of Coca-Cola at a price of $ 40 per share. share and sell those shares at $ 45 per share exercising their put option which will result in a profit of $ 5 per share. Therefore, to the extent that the current price of the asset (Coca-Cola shares) continues to decline, the gains associated with the return on investment for the buyer of a put option are limited to the strike price (less the first option paid) if the price of the asset falls to zero. However, the seller of the put option (see figure 12) makes potential losses equal to the exercise price (less the option premium received) if the price of the asset falls to zero. On the other hand, if the current price of shares rises, then the value of the put option decreases because it is less likely to be exercised. However, regardless of the increase in the price of the shares, the maximum loss associated with the return on the investment that the buyer of a put option could make is limited to the option premium. In contrast, the seller of the put option makes a maximum profit equivalent to the option premium. Based on the aforementioned examples, it is probably apparent that, ignoring the "time" factor, the purchaser of a purchase or sale option that employs a prior art system to carry out transactions with an option can essentially make a profit unlimited while limiting your potential loss to the amount of the option premium. On the other hand, the seller of a purchase or sale option that employs the prior art system acts simply as an insurer for a period of "time" charging the option premium in counterparty to ensure that the buyer of the option can buy or sell, respectively, the underlying asset at the strike price during a certain period of "time". However, the problem with these systems of the prior art is that "time" can not be ignored. Specifically, said prior art systems limit the buyer to purchase and sell options only by pre-established "time" increments that may or may not be an adequate amount of time to protect the buyer and leave the buyer with a worthless asset. after the expiration of the pre-established increment of "time". Specifically, with reference to the arrows that indicate forward in figures 8 and 9, even if an acquired purchase option may be increased or an acquired sale option may decrease in value as the current asset price increases or decreases , respectively, the value of the purchase or sale option whose current price still does not reach the exercise price must always face "time". In other words, the closer the purchase or sale option is to its expiration date, the more the "time" factor will have a negative effect on the value of the purchase or sale option acquired because the "time" is running out for that the current price of the asset reaches the exercise price. In addition, if the current price of the asset on the due date is below the exercise price of the purchase option acquired or above the exercise price of the put option purchased, then, regardless of the current price, the holder of option (1) will have an option with no value and (2) will be unprotected as to their efforts to acquire or sell a particular asset later. Accordingly, there is a need for an apparatus and process to carry out transactions with options that do not depend on "time". In other words, there is a need for a system that carries out transactions with an option without expiration. It is important to note that experts in the stock market and other markets that relate to options have concluded for many years that such a system to carry out transactions with an option can only generate an option premium that is fair. for the buyer and seller of the option, if the data representing the "time" in which the option expires are recorded in the system. More specifically, all the algorithms that have been derived for the generation of fair option premiums include a variable to take "time" into account. Such algorithms include the Black-Sholes algorithms, Binomial Pricing and Analytical Approximation. However, not only is there a need for a system capable of carrying out transactions with a fair premium for an option independent of "time", but there is also a need for a system to automatically carry out purchases and sales of options without expiration instantly while managing (1) constantly changing asset prices and other variables associated with the establishment of the option premium price and (2) the high volume (millions) of options handled daily in the stock market and other markets. The aforementioned limitations, and other indications of the prior art systems for handling expired options are effectively overcome by the present invention, as will be described in more detail below.

SUMMARY OF THE INVENTION In accordance with the teachings of the present invention, a new computerized system is provided to carry out transactions with options without expiration. The present invention is especially useful for carrying out options transactions without expiration in the stock market, but can be used in several other asset-based markets. The realization of the present invention is possible through the existence of margin positions, which are prevalent in the stock market. A margin position is a means for an investor to buy rights to a particular asset (for example, securities) for an indefinite period of time (without maturity) without having to pay the full value of the asset at the time of acquisition.

An investor acquires the right over a particular asset by opening a "long" margin position or a "short" margin position. A long margin position (also known as a conditional acquisition) is opened when the investor expects the value of the asset to increase, and a short margin position (also known as a conditional sale) is opened when the investor expects the value of the asset to decrease. As illustrated in Figure 12, an investor with a long margin position performs an ROI equal to the current value of an asset when the investor closes the margin position minus the value of the asset when he opened the positioned margin. Therefore, if the value of an asset increases from $ 20 to $ 30, then the investor with a long margin position makes a profit of $ 10 when closing the margin position. However, if the value of the asset decreases to $ 5, then the same investor has a loss of $ 15. On the other hand, as illustrated in Figure 13, an investor with a short margin position performs an ROI equal to the value of the asset when the investor opened the margin position minus the value of the asset when closing the margin position. Therefore, if the value of an asset decreases from $ 20 to $ 5, then the investor with a short margin position makes a profit of $ 15 when closing the margin position. However, if the value of the asset is raised to $ 30, then the same investor has a loss of $ 10. A margin requirement, especially in the stock market, for a particular asset is typically substantially higher than an option premium for an option with expiration on the same asset in accordance with that described in the Background on the Invention section. One reason for the substantial difference between the margin requirement and the option premium for a maturing option is that the entity (for example, the broker) that offers the margin position assumes essentially more risk because, unlike the option with maturity, the margin position does not automatically expire after a pre-established period of "time" (unless, of course, the underlying asset expires, such as futures or contracts on merchandise). Since any asset with expiration must be a derivative or representative of a contingent claim, it is assumed that the margin position is in the base asset or it is an asset without maturity. In the case of a corn futures contract, even though the margin position is in fact for the futures contract that will expire, it can be shown that the margin requirement actually represents the margin requirement for corn, or active of base, too. In the prior art, a change in the futures contract is achieved by "refinancing", or by exchanging one contract for another to maintain the maximum date of delivery or sale futures. The present invention makes this unnecessary. Also, since, unlike an option premium, the margin requirement is essentially returned to the investor of a margin position because the margin requirement is applied to the acquisition price (current value) at the moment in which the investor of a margin position closes the margin position, the entities responsible for regulating margin positions are selected (unscientific) a margin requirement that balances the demand of investors, speculators and compensators with the protection of the respective market against default risk. These entities typically present margin requirements either as a fixed dollar amount (margin amount) associated with a particular asset or a fixed percentage (margin percentage) of the current price (value) of the particular asset. The present invention exploits the inefficiencies related to the margin requirements selected in a non-scientific manner. More specifically, the present invention can combine the non-maturity feature of the margin position and the limited risk of the matured option recognizing that, since the margin requirement is selected unscientifically, there is a price (premium of option) that would make many interested in dealing with margin positions and maturing options find great benefits when carrying out transactions with options without expiration. The present invention exploits the margin requirements selected unscientifically (imperfectly) by recognizing a particular relationship between margin positions and options. As shown in Figure 14, a long margin position is equivalent to a purchase option with an expired date and a put option with expiration sold when the "time" effect is discounted. In addition, as illustrated in Figure 15, a short margin position is equivalent to a purchase option with expired sales and a put option with purchased maturity. In summary, if the effect of "time" is discounted, an entity that allows an investor to open a margin position (for example, a long margin position) is in the same position it would be if it simply allowed an investor purchase an expired option (for example, a purchase option) and sell an expired option (for example, a put option). A significant feature of the present invention is that it can discount the effect of "time" to allow a margin position to be equivalent to an option purchased and sold, in accordance with what has been described above. Specifically, the present invention can employ any of a number of expiring option algorithms for determining option matures with fair maturity, in accordance with that indicated in the Background of the Invention section, to discount the effect of "time". All expired option premium algorithms, in addition to including a "time" variable, include easily observable variables, such as the current value (price) of the asset, the historical price volatility of the asset (the standard deviation of the historical movement). of the price of the asset) and the interest rate without current risk (the rate of return without risk of default, such as the rate of treasury bonds of the US government). In addition, all expired option premium algorithms include variables for the strike price. Accordingly, the present invention employs the expired option premium algorithms to discount the effect of "time" in accordance with the following process: (1) the exercise price is set to be equal to the current price of the asset and ( 2) the option premium is established to be equal to the margin requirement for the asset. The present invention then employs the reward algorithm of option with expiration to generate the anticipated point of "time" (implicit time) when an option would expire if the buyer paid an option premium equal to the margin requirement established in an unscientific way of the asset and if the exercise price was equal to the price of current assets (as is the case in a margin position at the time of opening). The present invention uses the above process because the exercise price is always equal to the current asset price at the moment when the margin position is opened, and it is the point of time when an investor from a margin position would willingly pay an inflated option premium equal to the margin position requirement to limit its risk. Accordingly, the present invention can discount "the time" to establish the price of an option purchased and sold in such a way that they are equivalent to a margin position at the point at which the price of the asset is considered equal to the exercise price. . After generating the implicit time value, the present invention establishes the time value in the option premium algorithm with expiration equal to the implicit time value. The present invention then generates an option premium without expiration based on the particular exercise price selected by the investor. The present invention can be implemented in several computing systems. More particularly, the present invention employs a computer system for receiving and storing representative data of a particular asset, a type of option (purchase option or put option), a required exercise price and numerous other variables related to the handling of an option without expiration on the asset. Then, in response to the data received, the present invention uses the computer system to generate representative data of a first option without expiration, and carries out transactions with the non-maturity option using the option premium without expiration. In use, when a user wishes to acquire or sell an option without expiration, the user is instructed to record data representative of the asset, the type of option and the exercise price required for the asset, by means of a keyboard or other device. of the computer system. The apparatus and process of the present invention then indicate to the user that it records certain other data related to transactions of an option without expiration on the asset. The other data includes the current price of the asset in the open market, the historical volatility of the price of the asset, the interest rate without current risk and the margin requirement associated with the asset. Due to the fact that these data change frequently, in general, the present invention can alternatively receive this data from one or more data sources (for example, a database or a real-time quote service such as S &; P ComStock), connected to the computation system of the present invention. After receiving all the data, they are stored in a storage medium of the computer system. The present invention then uses one of the expired option premium algorithms to generate the representative data of the option premium without expiration. More specifically, the present invention temporarily sets the variable option premium of these algorithms to the margin requirement data, temporarily sets the exercise price variable of these algorithms in the current asset price data and generates data for the implicit time of these algorithms. The present invention then uses the implicit time data and the exercise price data recorded by the user to generate the data for the option premium variable of these algorithms. The option premium data generated is the non-maturity option premium used to carry out transactions with the non-maturity option for the particular asset. Accordingly, the option premium data is sent for use to complete the option transaction without expiration. The present invention is especially important for those who wish to protect themselves against price changes for indefinite periods of "time". In other words, individuals and entities can now only worry about the future price of an asset and stop worrying about the seemingly impossible task of predicting the "time" in which the asset will reach this price. For example, a cereal manufacturer whose cereal prices for its customers depend to a large extent on the purchase price of wheat can now better assure its customers constant prices of cereals by acquiring a purchase option without expiration by employing the present invention. More specifically, the cereal manufacturer can now ensure that it can continue to acquire wheat at a certain price or below a certain price (the exercise price), regardless of the "time" in the future when the price of wheat rises by above the exercise price. With reference to Figure 16, by using the present invention, in counterpart for the payment of the option premium, the cereal manufacturer can acquire a purchase option without expiration that has an unlimited positive potential, a limited negative potential ( the option premium) and never totally lose its value. On the other hand, a farmer whose family depends on being able to sell their entire wheat crop at a set minimum price would also obtain significant advantages. Specifically, the farmer who could not predict if wheat prices could fall the following year or in five years may purchase a put option without expiration using the present invention to ensure that his wheat will be purchased at a certain price (the price of exercise) regardless of the "time" in the future when the price of wheat falls below the strike price. With reference to Figure 17, using the present invention, in counterpart for the payment of the option premium, the farmer may acquire a put option without expiration that has an unlimited positive potential, a limited negative potential (the option premium) and it never becomes worthless. Another aspect of the present invention is that it can handle current asset prices of constant change and other variables associated with the generation of the option premium price and carry out transactions with the option without expiration. As described above, through the use of one or several data sources, data from various parties can be updated and stored constantly, regardless of location, for use to generate the price of the option premium at any given time. A further aspect of the present invention is that it can perform transactions automatically and essentially instantaneously in the stock market and in other markets in the world. This is especially important in the stock market because typically millions of option contracts are handled per day. This characteristic is also important due to the volatility of the variables used to generate the price of the option premium. This makes the essentially instantaneous transaction capacity imperative, especially in the stock market. Another additional aspect of the present invention is that it can handle extinction bands. An extinction band is a price higher than the exercise price for a put option and a price lower than the exercise price for a put option. The price of the extinction band is selected because a particular entity responsible for handling stock exchanges may wish to implement options without expiration without significantly increasing the accounting requirements for the respective stock exchange. By introducing bands of extinction, or forced closure of an option without expiration not based on time, but in the distance of the exercise price of the current price of the asset, a stock exchange can retain the aforementioned benefits of the options without expiration for its members without significantly increasing the accounting requirements. The price setting algorithm for this non-maturity option assumes that both the band, the maximum distance from the exercise price of the asset price and the termination date (or the effective date of measurement of the exercise price from of the current asset price) for these options is known. If these variables are not known, then the option without expiration with bands of extinction is established in terms of price exactly - in the same way as the option without expiration without extinction bands. The aforementioned aspects as well as other aspects of the present invention are described in more detail below in combination with the accompanying drawings. BRIEF DESCRIPTION OF THE DRAWINGS Figure 1 represents a diagram of a preferred computation system for implementing the present invention. Figure 2 depicts components of an end-user workstation for the computation system of Figure 1 to implement the present invention. Figure 3. Represents components of a server for the computer system of Figure 1 to implement the present invention. Figure 4 represents a flow diagram of a preferred embodiment for the Main Module of the present invention. Figure 5 represents a flow chart of a preferred mode for the CALC module of the present invention, which calculates the option premium without expiration ignoring the extinction bands.

Figure 6 represents a flowchart of a preferred embodiment for the DATA_ENTRY module of the present invention, which instructs the user to record certain data to carry out transactions with the option without expiration. Figure 7 illustrates a flow chart of a preferred embodiment for the CALC_E module of the present invention, which calculates the option premium without expiration with extinction bands. Figure 8 represents a graph illustrating the potential Return on Investment (ROI) versus the Value of an Asset (Asset Value) for an option with acquired maturity managed in a prior art system. Figure 9 represents a graph illustrating the potential ROI versus the Asset Value for a put option with acquired maturity managed in a prior art system. Figure 10 illustrates a graph showing the potential ROI versus the Asset Value for an expired option sold handled in the prior art system. Figure 11 shows a graph illustrating the potential ROI versus the Asset Value for a sold sell option sold in a prior art system. Figure 12 shows a graph that illustrates the potential ROI versus the Asset Value of a long margin position. Figure 13 shows a graph that illustrates the potential ROI versus the Asset Value of a short margin position. Figure 14 illustrates the equivalent relationship between a long margin position and an option without purchased purchase expiration (option with expiration with discounted time) plus an option with no expiration of sale sold (option with expiration with discounted time). Figure 15 illustrates the equivalent relationship between a short margin position and an option with no sale expiration sold (option with expiration with discounted time) plus an option without expiration of sale bought (option with expiration with discounted time). Figure 16 shows a graph illustrating the ROI potency versus the Asset Value of an option without purchased purchase expiration managed by using the apparatus and process of the present invention Figure 17 shows a graph illustrating the potential ROI versus the Asset Value of a put option with no expiration acquired managed using the apparatus and process of the present invention.

DETAILED DESCRIPTION OF THE INVENTION The apparatus and process of the present invention can be implemented in various types of computer systems, but are preferably implemented in a client / server network 100 as illustrated in Figure 1. The client / server network 100 includes a server 110 connected to several clients 120, also known as end user work stations, and a data source 130 operating in a ring environment of bit configurations. As illustrated in Figure 2, each end-user workstation 120 preferably includes a microprocessor 210, a video display 220 (eg, a CRT projector or monitor), a keyboard 230, a mouse 240, a printer 260, and a storage medium 250 (e.g., an array of disks, tape, optical drive, tape drive, or soft disk drive). End-user workstations 120 may be an IBM-compatible PC, a laptop, or a pen computer that handles Microsoft Windows 95 or its equivalent. As shown in Figure 3, each server 110 preferably includes a microprocessor 310 and a storage medium 350. The server can use Microsoft NT or peer-to-peer with a dedicated peer as server or its equivalent. The data sources 130 can be a Quotron system or its equivalent, which can regularly receive data through satellite communications 135, and terrestrial line connections (eg, a modem) 137 or the like. However, any other source capable of receiving and providing data relevant to the options transactions without expiration may be employed in the present invention. The preferred client / server network of the present invention is a Windows NT PC LAN. Even when these are the clients, servers and preferred client / server networks, a person with certain knowledge in the field will observe that suitable equivalents can be used. The following flow diagrams illustrate the operation of the present invention. In a preferred embodiment, when the user wishes to acquire or sell an option without expiration in relation to a particular asset, the user can see the video display 220 of the end user workstation 120 for instructions on how to handle the contract on option without expiration. With reference to Figure 4, in step 410 of the Main Module, the person is indicated through the video display 220 indicating when the user is ready to carry out transactions with the option without expiration. By pressing the ENTER key of the keypad 230 or by clicking on the START box in the video display 220 with the mouse 240, the present invention begins to operate the transaction on the option without expiration proceeding to the step 420. For simplification purposes, it can be considered that the microprocessor 210 of the end-user workstation 120 and the microprocessor 410 of the server 110 coordinate all the tasks of the end-user workstation 120 and the server 110 of the end-user system. computation, respectively, and all tasks between the two. In step 415, the video display instructs the user to record representative data of a particular asset. Upon receiving the representative data of a particular asset, the present invention proceeds to step 420. In step 420, the video display 420 instructs the user to select which option pricing algorithm he wishes to employ to carry out the transaction. on the option without expiration. Such algorithms include, but are not limited to, the Black-Sholes algorithm, the Binomial Pricing algorithm, the Finite Difference, and the Analytical Approach. These algorithms are widely used in relation to the determination of expired option premiums and are available both in the programmatic itself and in the shared programmatic of Montgomery Investment Technology, which provides a price calculator to all persons with access to the Internet as well as algorithms for Establish extensive and fast option prices. The prices of the options provided in this detailed description were determined using this free Internet service, and it was shown that any option establishment algorithm can be used to determine option prices without expiration. For example, the algorithm Black-Sholes is: where c = OPT_PREM = the option premium 15 s = ASSET_PRECIO = the current price of a particular asset X = X_PRECIO = the exercise price r = T_BILL = the interest rate without current risk sigma = VOLATILITY = the standard deviation of the movement 20 to white historical price commonly known as asset volatility T = time to maturity (for an option with expiration) i In another example, the Binomial Establishment algorithm of Prices is: L J! (N -j)! (L - p) nJ max [?, Uj cTj S - K] J or C = r "Where c = OPT_PREM = the option premium S = ASSET_PRICE = the current price of a particular asset K = X_PRICE = the price of exercise r = T_BILL = the interest rate without current risk n = the number of periods (time) to maturity (for an option with expiration) r - dp = .u - du = minimum value of an upward movement of the asset price underlying (for example, $ 1/8 -avo in most shares), and d = minimum value of a downward movement in the price of the underlying asset ($ 0.0001 in most futures or commodities) Note: the stock exchange establishes generally "u" and "d" and said values can be stored in a storage medium for their access or they can be registered simply in the system based on need.

In addition, as a person with certain knowledge in the matter could easily observe, other options algorithms with related maturities can be used to carry out transactions with an option without expiration. Upon receipt of a number related to the algorithm selected by the keyboard user 230 or by clicking on the appropriate number in the video display with the mouse 240, the present invention proceeds to step 430. Obviously, the present invention could be implemented for simply offer an expiration option algorithm, such that the selection step of expiry option algorithm 420 can be completely removed. In step 430, the video display 220 instructs the user to record whether or not to include extinction bands in the option transaction without expiration. If the user selects no, then the present invention proceeds to step 500, otherwise it follows step 700. If the user decides not to include extinction bands in the transaction, then, with reference to Figure 5, the present invention proceeds. to the CALC Module in step 500. The CALC Module is used to calculate the option premium without expiration ignoring the extinction bands. Obviously, if it is used exclusively in markets or in stock exchanges without extinction bands, step 430 can be completely removed.

The present invention proceeds after the DATA_ENTRY Module (Data entry) in step 600. The DATA_ENTRY Module (data entry) as illustrated in Figure 6, is used to instruct the user to record data and accept the entry of data by the user. In step 601, the video display 220 instructs the user to record the current price for the particular asset. The user can obtain the current price for the particular asset from several sources, such as data source 130. In step 602, the present invention then checks whether the current price of the asset has been received. If this is not the case, then the present invention returns to step 601. Otherwise, the present invention stores the current price of the asset received under the variable ASSET_PRICE (Asset Price) on storage medium 250 and proceeds to step 603. In another embodiment, steps 601 and 602 may be replaced by a step that automatically accesses the current price for a particular asset from data source 130. In another embodiment, steps 601 and 602 may be replaced by a step which automatically accesses the current price for a particular asset from the storage medium 350 of the server 110 which can be automatically updated by the data source 130 or manually by means of a network administrator. In step 603, the video display 220 indicates the user to record the interest rate without current risk. The user can obtain the current risk-free interest rate from several sources, such as data source 130. In step 604, the present invention then checks whether the interest rate has been received without current risk. If this is not the case, then the present invention returns to step 603, otherwise, the present invention stores the interest rate without current risk received under the variable T_BILL (treasury bond) in a storage means 250 and proceeds to the step 605. In another embodiment, steps 603 and 604 may be replaced by a step that automatically accesses the current risk-free interest rate from data source 130. In another embodiment, steps 603 and 604 may be replaced. by a step that automatically accesses the interest rate without current risk from a storage device 350 of the server 110 that can be automatically updated by the data source 130 or manually by a network administrator. In step 605, the video display 220 instructs the user to record the standard deviation of the price movement in relation to the asset known as "the historical price volatility of the asset". The user can obtain the historical price volatility of the asset from several sources, such as data source 130. In step 606, the present invention then checks whether the historical price volatility of the asset has been received. If this is not the case, then the present invention returns to step 605, otherwise, the present invention stores the historical price volatility of the asset received under the variable "VOLATILITY in the storage medium 250 and proceeds to step 607. In another mode, steps 605 and 606 may be replaced by a step that automatically accesses the historical price volatility of the asset from data source 130. In another embodiment, steps 605 and 606 may be replaced by a step that automatically accesses the historical price volatility of the asset from the storage medium 350 of a server 110 which can be automatically updated by the data source 130 or manually by a network administrator. video 220 instructs the user to record the exercise price for the particular asset In step 608, the present invention then verifies whether the exercise price The asset has been received. If this is not the case, then the present invention returns to step 607, otherwise the present invention stores the exercise price of the asset received under variable X_PRICE (price X) in storage means 250 and proceeds to step 609. In step 609, the video display 220 instructs the user to record the type of option (either a purchase option or a put option). In step 610, the present invention then checks whether the type of option has been received. If this is not the case, then the present invention returns to step 609, otherwise the present invention stores the type of option under the variable OPT_TYPE (option type) in the storage medium 250 and proceeds to step 611. In step 611, the video display 220 indicates the user to record the margin requirement (amount of margin or margin percentage) in relation to the particular asset. The user can obtain the margin requirement from several sources, such as data source 130. In step 612, the present invention then checks whether the margin requirement for the asset has been received. If this is not the case, then the present invention returns to step 611, otherwise, the present invention stores the margin requirement for the asset received under the variable MARGIN (margin) in the storage medium 250 and proceeds to step 699, which returns the present invention to step 510 of the CALC Module of Figure 5. In another embodiment, steps 611 and 612 may be replaced by a step that automatically accesses the margin requirement from data source 130. In In another embodiment, steps 611 and 612 may be replaced by a step that automatically accesses the margin requirement from the storage medium 350 of the server 110 that can be automatically updated by the data source 130 or manually by an administrator. network. In step 510, the present invention establishes the temporary option premium equal to the value of the margin requirement (MARGIN) (margin) and stores the option premium under the variable TEMP_OPT_PREM in the storage medium 250. The present invention follows up to step 520, where a temporary exercise price equal to the current asset price is established (ASSET_PRICE) (asset price) and the temporary exercise price is stored under variable TX_PRICE (price tx) in storage medium 250. The present invention then proceeds to step 530. In step 530, the present invention determines the time implied for the option without expiration using the price detection algorithm selected by step 420, where each option price setting algorithm will provide approximately the same implicit time value. The implicit time is then stored under the variable IMPLD_T in the storage medium 250. The present invention then proceeds to step 540. In step 540, the present invention then determines the option -real premium for the option without expiration using again the option price setting algorithm selected in step 420, the X_PRICE selected in step 607, and the implicit time value (IMPL_T). The present invention then follows step 440 of the Main Module in Figure 4. With reference again to step 430, if the user selects to include extinction bands in the option transaction without expiration, then the present invention proceeds to the CALC_E Module in the step 700. With reference to figure 7, the module CALC_E in step 700 calculates the option premium without expiration taking into account the extinction bands. The present invention then proceeds to the DATA_ENTRY Module (data entry) in step 600. Again, the DATA_ENTRY Module, as illustrated in Figure 6, is used to instruct the user to record data and to accept the data recorded by the user. user. In step 601, the video display 220 instructs the user to record the current price of the particular asset.

The user can obtain the current price for a particular asset from several sources, such as data source 130. In step 602, the present invention then checks whether the current price of the asset has been received. If this is not the case, then the present invention returns to step 601, otherwise the present invention stores the current price of the asset received under the variable ASSET_PRICE (asset price) in storage means 250 and proceeds to step 603. In another embodiment, steps 601 and 602 may be replaced by a step that automatically accesses the current price from data source 130. In another embodiment, steps 601 and 602 may be replaced by a step that automatically accesses at the current price from the storage medium 350 of the server 110 which can be updated automatically by a data source 130 or manually by a network administrator. In step 603, the video display 220 instructs the user to record the interest rate without current risk. The user can obtain the current risk-free interest rate from several sources, such as data source 130. In step 604, the present invention then checks whether the interest rate without current risk has been received. If this is not the case, then the present invention returns to step 603, otherwise, the present invention stores the interest rate without current risk received under the variable T_BILL (treasury bond) in the storage means 250 and proceeds to the step 605. In another embodiment, steps 603 and 604 may be replaced by a step that automatically accesses the current risk-free interest rate from data source 130. In another embodiment, steps 603 and 604 may be replaced by a step that automatically accesses the interest rate without current risk from the storage medium 350 of the server 110 that can be automatically updated by the data source 130 or manually by a network administrator. In step 605, the video display 220 instructs the user to record the standard deviation of the price movement in relation to the asset known as the "historical price volatility of the asset". The user can obtain the historical price volatility of the asset from several sources, such as data source 130. In step 606, the present invention then checks whether the historical price volatility of the asset has been received. If this is not the case, then the present invention returns to step 605, otherwise the present invention stores the historical price volatility of the asset received under the variable VOLATILITY in storage medium 250 and continues to step 607.

In another embodiment, steps 605 and 606 may be replaced by a step that automatically accesses the historical price volatility of the asset from data source 130. In another embodiment, steps 605 and 606 may be replaced by a step that automatically accesses the historical price volatility of the asset from the storage medium 350 of the server 110 that can be automatically updated by the data source 130 or manually by a network administrator. In step 607, the video display 220 instructs the user to record the exercise price for the particular asset. In step 608, the present invention verifies afterwards whether the exercise price of the asset has been received. If this is not the case, then the present invention returns to step 607, otherwise, the present invention stores the exercise price of the asset received under the variable X_PRICE (price X) in storage means 250 and proceeds to step 609 At step 609, the video display 220 instructs the user to record the type of option (either a purchase option or a put option). In step 610, the present invention then checks whether the option type has been received. If this is not the case, then the present invention returns to step 609, otherwise the present invention stores the type of option under the variable OPT_TYPE (option type) in the storage means 250 and proceeds to step 611. In the step 611, the video display 220 instructs the user to record the margin requirement (amount of margin or margin percentage) in relation to a particular asset. The user can obtain the margin requirement from several sources, such as data source 130. In step 612, the present invention then checks whether the margin requirement for the asset has been received. If this is not the case, the present invention returns to step 611, otherwise the present invention stores the margin requirement for the asset received under the variable MARGIN (margin) in storage means 250 and proceeds to step 699, which returns the present invention to step 510 of the CALC_E Module in Figure 7. In another embodiment, steps 611 and 612 may be replaced by a step that automatically accesses the margin request from the data source 130. In another embodiment, Steps 611 and 612 can be replaced by a step that automatically accesses the margin requirement from the storage medium 350 of the server 110 which can be updated automatically by the data source 130 or manually by means of a manager of the net. In step 710, the video display 220 instructs the user to record whether or not he wishes to determine the extinction band in percentages or in dollars. If the user selects percentages, then the present invention proceeds to step 720. Otherwise, the present invention proceeds to step 750. In step 720, the video device 220 instructs the user to record the price movement as a percentage to be used to determine the extinction band and the percentage is stored under the variable PERCENTAGE in the storage medium 250. The present invention then proceeds to step 725, where it determines whether the option type without expiration (OPTION_TYPE) (option type) it is a "purchase" option or a "sale" option. If the non-expired option is a "buy" option, then the present invention proceeds to step 730, otherwise the present invention proceeds to step 735. In step 730, the current asset price (ASSET_PRICE) (price of asset) for the option of "purchase" is established in the current asset price (ASSET_PRICE) (asset price) multiplied by the compound value of the price movement in percentage (PERCENTAGE) plus one. On the other hand, in step 735, the current asset price (ASSET_PRICE) (asset price) for the "sale" option is set to the current asset price (ASSET_PRICE) (asset price) multiplied by the composite value of the percentage price movement (PERCENTAGE) minus one. The present invention proceeds after step 730 or step 735 to step 775. The present invention, in step 775, it gives access and receives the date of extinction for the particular asset (EXT_DATE) (expiration date) that has been established by the stock exchange and stored by the system administrator from storage means 250 or 350. Obviously, the date of extinction can also be recorded manually by the user of the present invention, who can manually record the date of extinction established by the stock exchange each time the system is used. The present invention then proceeds to step 780. In step 780, the present invention then determines the option premium for the option without expiration taking into account the extinction band by again using the option price setting algorithm selected in step 420 and sets the value of the time to expiration of the algorithm in EXT_DATE (extinction date). The present invention then proceeds to step 799. With reference again to step 710, if the user selects the use of dollars to determine the extinction band, then the invention proceeds to step 750. In step 750, the video display 220 instructs the user to record the movement of the minimum dollar price to be used to determine the extinction band, and the price movement in dollars is stored under the variable TICK in the storage medium 250. In step 755, the present invention then set the variable BAND (band) for dollars. The present invention then proceeds to step 760, where it determines whether the type of option without expiration (OPTION_TYPE) (option type) is a "buy" option or a "sell" option. If the non-expired option is a "buy" option, then the present invention proceeds to step 765. Otherwise it proceeds to step 770. In step 765, the current asset price (ASSET_PRICE) is set (price of active) for the "buy" option in the current asset price (ASSET_PRICE) (asset price) plus the BAND divided by the price movement in dollars (TICK). On the other hand, in step 770, the current asset price (ASSET_PRICE) (asset price) for the "sale" option is set to the current price (ASSET_PRICE) (asset price) minus the BAND divided by the movement of price in dollars (TICK). The present invention proceeds after step 765 or step 770 to step 775. The present invention, in step 775, gives access and receives the date of extinction for the particular asset (EXT_DATE) (date of ext.) That has been established by the stock exchange and stored by the system administrator from the storage means 250 or 350. Obviously, the date of extinction can also be recorded manually by the user of the present invention, who can manually record the date of extinction established by the stock exchange every time the system is used. The present invention then proceeds to step 780. In step 780, the present invention then determines the option premium for the option without expiration by taking into account the extinction band by again using the option price setting algorithm selected in the step 420 and setting the time to expiration value in the algorithm to EXT_DATE (ext. date). The present invention then proceeds to step 799. In step 799, the present invention proceeds to step 440 of the Main Module in Figure 4, where it stores the option premium without expiration under the variable OPT_PREM in the storage means 250. In step 450, the present invention then terminates the option transaction without current expiration by sending a purchase or sale copy (ticket) to the user, which includes the option premium and other pertinent information related to the transaction.

The present invention then proceeds to step 470, where the video display 220 instructs the user to determine whether or not to make another transaction on an option without expiration. If the answer is affirmative, then the present invention proceeds to step 420, where the user is again asked through the video display 220 to select an option price processing algorithm. If this is not the case, then the present invention proceeds to step 499, where the option transactions without expiration for the current user ends. It is important to note that the preferred embodiment of the present invention considers that, although they may not be so at present, the interest rates and dividend yield associated with each particular asset (e.g., an action, bonus, etc.) they are zero The reason for this consideration is that the algorithms used in connection with the pricing of the underlying asset already factor the interest rate and dividend yield into the asset price. These algorithms can be mathematical, inductive, or both. Accordingly, the present invention for effecting transactions with non-expiring options by employing the same algorithms as those for expired options factored the interest rate and dividend yield on the option premium, but at a value of zero to ensure that both the purchase option and the sale option in S = X have a price equal to the margin requirement. The following examples illustrate the time / cost relationship between options with maturity, premiums, options without maturity and margin requirements. Both examples consider a margin requirement of 25%, a current asset price of 50, a historical price volatility of 35%, and a current risk-free interest rate of 6%. Thus, using the Black-Sholes algorithm, an implicit time of 1210.09 days is derived. The first example considers a purchase option with an exercise price of US $ 60 requested by an investor.

Time to Premium Premium Requirement expiration option option without margin • maturity expiration Six months 2.15 9.29 12.5 One year 4.59 9.29 12.5 Eighteen months 6.65 9.29 12.5 Two years 8.56 9.29 12.5 Three years 11.87. 9.29 12.5 Five years 16.63 9.29 12.5 Ten years 27.04 9.29 12.5 The second example considers a put option with an exercise price of US $ 40 requested by the investor.

Time to Premium of Requirement Premium the maturity option with no margin due maturity Six months 0.85 6.91 12.5 One year 1.78 6.91 12.5 Eighteen months 2.45 6.91 12.5 Two years 2.96 6.91 12.5 Three years 3.66 6.91 12.5 Five years 4.29 6.91 12.5 Ten years 4.45 6.91 12.5 What has been described above is a preferred embodiment of the present invention. Obviously, it is not possible to describe all conceivable combinations of components or methodologies to describe the present invention, but persons with certain skill in the art will recognize that many additional combinations and permutations of the present invention are possible. For example, options without expiration can be used to construct any permutation combination of expired options currently employed. These include Asían, or average price / rate and exercise options; Barrier, which removes or adds with and without rebate; Binary, including binary barrier, all or none and difference; Chooser, which is an option to choose a sale option or purchase option in the future; Compound, an option over an option; Crack / Spread, or an option on the difference between the prices of two assets; Currency Translated, or foreign exchange options transferred in another currency; Ju p, establishing a price using a diffusion process by jumping; Lookback or an option based on minimum or maximum price within a certain period of time; Rainbow, or an option on the minimum or maximum level of two assets; options on US government securities or foreign "stabilized" divided into two or more instruments of principal and interest or price and dividend, as well as options on securities, notes, bonds and certificates of deposit municipal, agency, stabilized corporations; options on documents payable on demand; or securities payable on demand with premium or discount; and options on Odd-First, -Last, -Middle, or values with various coupon / dividend periods. Although not limited to these options, this list provides a clear example of the breadth of application of the American Options without Maturity. Also, even though the present invention has been described substantially in terms of the use of the margin requirement of a margin position in the stock market, equivalents to the margin requirement in other markets can be used (for example, bonds in the securities market). real estate) . Furthermore, even though the preferred embodiment of the present invention is described considering that the margin requirement in the underlying securities is the same for both long positions and short positions, this does not have to be the case. Specifically, even in cases where the margin position requirements are different, it will be apparent to a person with certain knowledge in the art that the present invention can be used to determine the non-maturity option premiums comprising each respective position by the use of the long position margin requirement to purchase non-expired purchase options and sell put options without expiration, while using the short position margin requirement for the purchase of put options without expiration and the sale of purchase options without expiration. All these modifications are included within the scope of the claimed invention, in accordance with that defined in the appended claims.

Claims (17)

1. CLAIMS 1. A data processing apparatus for use in transactions in connection with an option without expiration on a particular asset, said data processing apparatus comprising: (A) a device for receiving data representative of a particular asset, a type of option, an exercise price for the particular asset, the current price of the particular asset, the historical price volatility of a particular asset and the margin requirement for the particular asset; (B) a storage medium adapted to store the data received by said receiving device and an expired option premium algorithm; (C) a device, which responds to the data received by said receiving device, to generate data representative of an option premium for the option without expiration on the asset using the expired option premium algorithm; and (D) a device for providing the option premium data for use in transactions with the option without expiration. The data processing apparatus according to claim 1, further comprising a device for recording at least part of the data received by the receiving device. 3. The data processing apparatus according to claim 2, wherein said recording device is selected within the group consisting of: a keyboard and a mouse. 4. The data processing apparatus according to claim 1, further comprising one or more data sources for sending at least part of the data to the receiving device 5. The data processing apparatus of claim 1, said output device is selected within the group consisting of: a video display and a printer 6. A process for operating a computer system for performing transactions with an option without expiration, said process comprises the steps of: (A) indicate to a user that it has to register representative data of a particular asset, (B) receive a first signal from the user, where said first signal is representative of data for the particular asset, (C) indicate to the user that it records data representative of a type of option; (D) receiving a second signal from the user, wherein said second signal is representative of data for the type of option; (E) instruct the user to record data representative of an exercise price for a particular asset; (F) receiving a third signal from the user, wherein said third signal is representative of data for the exercise price for the particular asset; (G) receiving a fourth signal from a data source or from the user, where said fourth signal is representative of data related to the current price for the particular asset, the interest rate without current risk, the historical price volatility for the particular asset and the margin requirement for the particular asset; (H) in response to said first, second, third and fourth signals and using an expired option premium algorithm: (i) setting each variable of the option premium algorithm to its associated data value received in steps (B) ) and (G), (ii) establish the exercise price variable to be equal to the current price for the particular asset data from said fourth signal; (iii) establish the option premium variable to be equal to the margin requirement for the particular asset data; and (iv) generate representative data of an implicit time; and (I) use the expired option premium algorithm; (i) establish the exercise price variable to be equal to the exercise price data of said third signal, and (ii) generate data representative of an option premium for use in transactions with the non-maturity option. The process of claim 6, wherein said second signal is representative of data for the type of option selected within the group consisting of: a put option or a purchase option. 8. The process of claim 6, which further comprises the step of: (J) registering the option premium data in a storage medium. The process of claim 6, further comprising the step of: (J) providing the option premium data. 10. A process to operate a computer system to perform transactions with an option without expiration, said process comprises the steps of: (A) instructing a user to record relative data of a particular asset; (B) receiving a first signal from the user, wherein said first signal is representative of data for the particular asset; (C) instruct the user to record data representative of a type of option; (D) receiving a second signal from the user, wherein said second signal is representative of data for the type of option; (E) instruct the user to record data representative of an exercise price for the particular asset; (F) receiving a third signal from the user, wherein said third signal is representative of data for the exercise price for the particular asset; (G) receiving a fourth signal from a user data source, where said fourth signal is representative of data related to the current price of the particular asset, the interest rate without current risk, the historical volatility of the price of the particular asset and the date of extinction for the particular asset; (H) in response to said first, second, third and fourth signals and using an expired option premium algorithm: (i) setting each variable of the option premium algorithm to its associated data value received in the steps (B), (F) and (G), (ii) establish a time variable equal to the extinction date for particular asset data from said fourth signal; and (iii) generate data representative of an option premium for use in transactions with the option premium without expiration. The process of claim 10, wherein said second signal is representative of data for the type of option selected within the group consisting of: a put option or a purchase option. The process according to claim 10, further comprising the step of: (I) registering the option premium data on a storage medium. The process of claim 10, further comprising the step of: (I) providing the option premium data. The process of claim 11, wherein said fourth signal is further representative of data related to percentage for an extinction band, and where step (H), before sub-step (iii), further comprises the step of establishing the variable Asset price equal to the percentage data plus one for the current price of the particular asset data if the option type is a purchase option or by setting the asset price variable equal to one minus the percentage data for the price Current for the particular asset data if the option type is a put option. The process of claim 11, wherein said fourth signal is further representative of data related to a record of a dollar amount for an extinction band and a dollar amount for the extinction band, and where the step (H) , before sub-step (iii), further comprises the step of establishing the asset price variable equal to the extinction band data divided by the recorded data plus the current price of the particular asset data if the option type is a purchase option or by setting the asset price variable equal to the current price for the particular asset data minus the extinction band data divided by the recorded data if the option type is a put option. 16. A non-maturity financial instrument produced by the process of: (A) instructing a user to record data representative of a particular asset; (B) receiving a first signal from the user, wherein said first signal is representative of data for the particular asset; . (C) instruct the user to record data representative of a type of option; (D) receiving a second signal from the user, wherein said second signal is representative of data for the type of option; (E) instruct the user to record data representative of an exercise price for the particular asset; (F) receiving a third signal from the user, wherein said third signal is representative of data for the exercise price for the particular asset; (G) receiving a fourth signal from a data source or from the user, where said fourth signal is representative of data related to the current price of the particular asset, the interest rate without current risk, the historical volatility of the price of the particular asset and the margin requirement for the particular asset; (H) in response to said first, second, third and fourth signals and using an expired option premium algorithm: (i) setting each variable of the option premium algorithm to its associated data value received in steps (B) ) and (G), (ii) establish the exercise price variable equal to the current price for the particular asset data from said fourth signal; (iii) establish the option premium variable equal to the margin requirement for the particular asset data; And (iv) generate representative data of an implicit time; and (I) employing the maturity option premium algorithm: (i) establishing the exercise price variable equal to the exercise price data of said third signal, and (ii) generate data representative of an option premium for use in the production of an option financial instrument without expiration. 17. A non-maturity option financial instrument produced by the process of: (A) instructing a user to record data representative of a particular asset; (B) receiving a first signal from the user, wherein said first signal is representative of data for the particular asset; (C) instruct the user to record data representative of a type of option; (D) receiving a second signal from the user, wherein said second signal is representative of data for the type of option; (E) instruct the user to record data representative of an exercise price for the particular asset; (F) receiving a third signal from the user, wherein said third signal is representative of data for the exercise price for the particular asset; (G) receiving a fourth signal from a user data source, where said fourth signal is representative of data related to the current price of the particular asset, the interest rate without current risk, the historical volatility of the price of the particular asset and the date of extinction for the particular asset; (H) in response to said first, second, third and fourth signals and employing an expired option premium algorithm: (i) setting each variable of the option premium algorithm to its associated data value received in the steps (B), (F) and (G), (ii) establish a time variable equal to the extinction date for particular asset data from said fourth signal; and (iii) generate data representative of an option premium for use in the production of the non-maturity option financing instrument.