(xpost
/r/BitcoinStocks)
Hello > Securities >,
I'm presently in the late stages of establishing a series of funds that will allow for the short trading of various securities. My goal is to have the first two fund-pairs filed this weekend or early next week to enable investors and traders direct, in-market access to short positions on BTCT:ASICMINER-PT and BTCT:ACTIVEMINING, which I'm choosing to start with based on their volume.
Each short will consist of a pair of funds, one of which (the lending fund) acts like a pass-through with the additional revenue generated from the lending of securities to the shorting fund. The goal of the short fund will be to achieve a beta between -0.75 and -1.00. Neither fund will use any amount of marginal leverage outside of the cost of lending between them.
This is not a 'virtual' short such as the virtual mining assets that have arisen recently.
The shorting fund will use the sale of shares to create an initial cash position that will serve as collateral against the borrowing of shares from the lending fund. The cash generated from short sales, as well as treasury shares of the short fund, will be utilized to manage the market price of shares should the highest bid/lowest ask cross the threshold of the fund's NPV/share.
The short fund, once listed and being traded, will short and cover shares borrowed from the lending fund - and pay interest on loaned shares equal to 1% of the BTC value of the shares at the time they were borrowed plus any dividends. Management fees will collect a small percentage of the cash position of the short fund and half of the interest paid on shares.
If successfully launched additional short fund-pairs, leveraged ETFs, and index funds will follow.
I appreciate any questions / comments, and if you're holding either ASICMINER-PT or ACTIVEMINING long on BTCT and would be interested in earning some additional return please let me know via PM.
I will attempt to follow this thread and the crosspost on reddit throughout the day while I'm at work, and I will be able to respond more thoroughly to questions and comments after about 9pm UTC.
Such comments or statements as made by "Cryptonomics, SA", "davosBTC" or "davos" should not be read to constitute advice to purchase a security or financial product or as any form of investment advice. Margin trading is only for sophisticated investors and is subject to significant risk of loss.
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