A method for providing financing for long/short trading strategies including convertible arbitrage transactions

摘要

A method for providing financing for long/short trading strategies including convertible arbitrage transactions is described. First, this strategy packages longs and shorts into a single purpose transparent vehicle based on a Single Risk Based Strategy. Second, the platform contains rules-based modules which apply variable margins against securities positions. The Unitary Financial Platform 110 performs daily pricing, risk-based computer modeling, custodial monitoring, client interfacing, and risk reporting to external parties. Third, the funding structure requires that clients contribute capital thereby creating equity in the entity. A margin payment is received from a client, where a portion of the margin payment represents a variable margin payment. The remainder represents a fixed payment which is treated as capital in exchange for an equity interest in an entity. If multiple parties are involved in a single entity, this requirement puts all clients at risk with respect to the other clients in the context of the rules and provides a clearinghouse like aspect to risk sharing within the entity.