Fee and Investment Income
Proprietary Trading
Maple Financial trades securities and derivatives for its own account. Our activities include convertible bond trading, program trading, statistical arbitrage between pairs or clusters of stocks with a stable trading relationship, and dispersion trading of the spread between the volatility of an index and the volatility of its components. Our trading activities are biased towards being “long the accident” – that is, structured to take advantage of widening credit spreads or increased market volatility.

Maple’s long-term success in trading is attributable in equal parts to a pervasive risk management mindset and to our proprietary computing systems. Our systems and software have been developed in-house to allow constant market scanning and very rapid execution. The trading platform in Germany, for example, is fully automated and capable of executing complex transactions without human intervention, although we continually review trades for acceptance or refusal in light of current market conditions. Since almost all Maple trades are cleared and financed in-house, very low-margin transactions – which often have the lowest risk – are profitable for us.

The growth of Maple’s proprietary trading operations since 1986 has given the Company a huge reservoir of management expertise, investment data and intellectual capital. As we build Maple’s new lines of business, proprietary trading will inevitably diminish in its relative contribution to revenues and profitability. Yet trading will in no way diminish in its importance as an incubator of strategies, products and knowledge base that can help generate fee and investment income in other lines of business. This is a natural evolution that we believe will continue to make the best use of one of the financial world’s most successful trading operations.