Arbitrage Trading Account Arbitrage Trading Account (Notes)

9 Months Ended

Sep. 30, 2016

Schedule of Investments [Abstract]

Arbitrage Trading Account and Arbitrage Funds [Text Block]

Arbitrage Trading Account

At September 30, 2016 and December 31, 2015, the fair and carrying values of the arbitrage trading account were $603 million and $377 million, respectively. The primary focus of the trading account is merger arbitrage. Merger arbitrage is the business of investing in the securities of publicly held companies which are the targets in announced tender offers and mergers. Arbitrage investing differs from other types of investing in its focus on transactions and events believed likely to bring about a change in value over a relatively short time period (usually four months or less).

The Company uses put options, call options and swap contracts in order to mitigate the impact of potential changes in market conditions on the merger arbitrage trading account. These options and contracts are reported at fair value. As of September 30, 2016, the fair value of long option contracts outstanding was $1.2 million (notional amount of $53.9 million) and the fair value of short option contracts outstanding was $0.7 million (notional amount of $103.6 million). Other than with respect to the use of these trading account securities, the Company does not make use of derivatives.