Alter Securities is a service mark and/or trademark of Alter Securities. Supporting documentation for any claims and statistical information will be provided upon request. Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

 

The risk of loss in online trading of stocks, options, futures, forex, foreign equities, fixed income and derivatives can be substantial.

 

Derivatives involve risk and are not suitable for all investors. For more information read the "Characteristics and Risks of Derivatives". Before trading, clients must read the relevant risk disclosure statements on our Warnings and Disclosures document -

Warning and Disclosures. Trading on margin is only for sophisticated investors with high risk tolerance. You may lose more than your initial investment.

Regulatory:

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Tranched Value Securities™

Raise your performance and expand your investment opportunities.
Tranched Value Security™ (TVS)* is a security whose income payments, and hence value is derived from and collateralized (or "backed") by the value of a single asset, group of assets, stream of cash-flows or any other entity or product possibly having a determinable value (and / or price). Value of TVS™ is derived either from a value share of a specific underlying, or from a minimum contract value, which can equal to the value share of a specific underlying at the contract initiation, given that a higher-level (or “prior”) TVSs™ are satisfied.”
* Patent pending. Patent application number: 62791754.

Mortgage-Backed Securities Structure

People take out mortgages. Financial institutions group hundreds of subprime mortgages into Mortgage-Backed Securities (MBS).

The securities are grouped into tranches by levels of risk and earnings potential for bond holders. When everybody can pay their mortgage in full each month, each group of bond holders gets paid; otherwise the most junior tranches absorb losses first.

Tranched Value Securities Structure

TVS Payment Structure

First-tier value tranche have the first claim priority on corresponding value, making these tranches safer, while lower-tier value tranches have opportunity to generate higher returns from the same underlying.

Low Yield      First Paid      Lower Risk

Higher Yield      Last Paid      Higher Risk

Tranched Value Securities™ benefit all market participants leading to improved market efficiency.

Tranched Value Securities™ in action

TVS™ is state-of-the-art financial derivative.

Equity Underlying

Underlying: General Electric Ordinary Common Stock (NYSE: GE)

Legend: 5 TVSs were issued on 01/01/2007 with GE as underlying

Performance assessment: monthly, 01/01/2007-01/12/2017

Value Tranches:

Code

Value Share (%)

Min Value (US$)

GETVS-A

0.30

11.22

GETVS-B

0.25

9.35

GETVS-C

0.20

7.48

GETVS-D

0.15

5.61

GETVS-E

0.10

3.74

Performance

Combined TVS and Underlying Price Data (US$)

TVS Price Share of Total Price of Underlying (%)

Securities Performance (Limited to -100% to +100%)

Debt Underlying

Underlying: APPLE INC. DL-NOTES 2013(13/23) WKN A1HKKX | ISIN US037833AK68

Legend: 5 TVSs were issued on 07/05/2013 with Apple notes as underlying

Performance assessment: daily, 07/05/2013-12/12/2018

Value Tranches:

Code

Value Share (%)

Min Value (US$)

AAPLTVS-A

0.30

29.76

AAPLTVS-B

0.25

24.80

19.84

0.20

AAPLTVS-C

AAPLTVS-D

0.15

14.88

AAPLTVS-E

0.10

9.92

Performance

Combined TVS and Underlying Price Data (US$)

TVS Price Share of Total Price of Underlying (%)

Securities YTM (Limited to +0% to +40%)

Additional Data

TVS can be of multiple types increasing the opportunities to infinity.

By varying internal and external parameters of tranched value securities, the possibilities for creating new types of instruments are endless, which could potentially satisfy a wide range of market participants with different objectives – be it speculation, long-term investment, hedging operations or any others.

Benefits for Investors

  • New investment strategies

  • Enhanced leverage

  • Performance transformation

  • Lower transaction fees

  • Improved liquidity

  • Enhanced risk management

  • Efficient risk allocation and transfer

  • Information discovery

  • Diversification opportunities

  • Tax liability management

  • Lower minimum investment

  • Limited liability

  • Access to unavailable products

  • More predictable earnings

Benefits for Issuers

  • New ways to raise capital

  • Wider investment groups available

  • Better planning for cost of capital

  • Additional fees

  • Better liquidity

  • Improved balance sheet

  • Enhanced risk management

  • Accessing inaccessible investors

IMPROVED MARKET EFFICIENCY

Learn More

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  • Econometric Modeling: Financial Markets Regulation (#3)

  • Econometric Studies of Private Equity, Venture Capital, Entrepreneurship & Innovation (#5)

  • Innovation Finance & Accounting (#8)

  • Innovation & Finance (#9)

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