Structured products
WHAT IS THIS? Structured products are investments that have multiple components. For retail investors, the most common form is a bond plus an option – these tend to be standardised, sold in small tickets and large volumes. Managing the risks of large structured products portfolios is one of the biggest challenges dealers face.
Energy structured deals: dynamic vs quasi-static hedging
Traditional pricing and hedging approaches often fail to work properly for complex energy structures due to market incompleteness, liquidity problems or unusual price dynamics. In this article, Stefano Fiorenzani suggests some specific adjustments that…
Commodity Rankings: Reclaiming the top spot
The 2010 Risk/Energy Risk Commodity Rankings reveal which companies have been able to prosper despite the difficult conditions of 2009. Lianna Brinded analyses the results and talks to key market participants about their views
The lure of click-to-trade systems
Growing demand from high-net-worth investors for bespoke structured products is leading to smaller deal sizes. As a result, arrangers are planning to increase their use of automated systems to mitigate the costs of delivering and servicing small trades…
In search of the perfect match
Demand from pension funds for structured products has slumped during the financial crisis due to the great sell-off of equity risk. But the downturn has raised awareness of how derivatives can help match assets and liabilities, a strategy that is on the…
Maintaining interest
Axa IM has found its own ways to reduce counterparty risk and overcome the problems caused by low interest rates. It is now confident there will be a return to structured products. Clare Dickinson reports
Wrestling with correlation
The correlation risk inherent in most structured products represents an ongoing headache for manufacturers. While new regulatory proposals would affect how much risk banks keep on their books, market dynamics are at play, especially the rise in…
