Trading in derivatives is often undertaken using futures or options contracts. Futures contracts, for example, are entered into with respect to many different assets or commodities, such as gold, platinum, and oil. Futures contracts are typically entered into as speculation on future market movements, or as “hedging” measures. For instance, the price of gold may presently be $900 per ounce, and a trader may enter into a futures contract to buy 100 ounces of gold at $905 per ounce in one month's time. The trader does this in the hope that the price of gold will rise in that time. If, at the end of the month, the price of gold is $910 per ounce, the trader will be in a position to profit by $5 per ounce of gold, i.e. $500 in total.
A futures contract will normally be entered into with an investment bank or other securities trading entity. In order for both parties to the contract to be satisfied that the result is equitable, there must be for the underlying asset of the contract an index or other price metric on which both parties agree. At present, futures contracts cannot be bought for diamonds. The principal reason for this is that diamonds are not fungible, whereas a certain quantity of gold or oil may be, for all intents and purposes, the same as another quantity of gold or oil. Therefore, a futures contract can deal with merely a quantity of gold or oil. On the other hand, diamonds are individually classified by a number of parameters in addition to weight (carats), and those other parameters (such as color) are variable across diamonds of the same weight and significant factors in setting prices for diamonds.
The present invention is directed to a system for establishing diamond profiles that are useful for pricing diamonds in a standardized way to thereby make diamonds amenable as commodities or assets for derivative trading via futures contracts or the like.
Another aspect of the present invention provides a computer program comprising computer program code, or code adapted to perform all the steps of establishing diamond profiles when said program is run on a computer.
Preferably, the computer program is embodied on a computer readable medium.
Other features and advantages of the present invention will become evident upon a review of the entire specification, drawings, and claims of this application.