Equity markets

Markovian projection for volatility calibration

Vladimir Piterbarg looks at the Markovian projection method, a way of obtaining closed-form approximations of European-style option prices on various underlyings that, in principle, is applicable to any (diffusive) model. The aim is to distil the essence…

A growing gap

More and more dealers are entering the hedge fund derivatives market, and ever more complex structures are being launched. But while the fund-linked derivatives market has grown strongly, there is little consensus on the best way to manage the risks…

Purchase timing

Managing purchase timing risk is a constant issue for wholesale power buyers. Pavel Diko reviews products that reduce this risk, proposes a lookback option that can eliminate it completely and outlines a hedging strategy for the option writer

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