Risk Management for Investors - What's the name of the game?


Volatility has become the name of the game for hedge funds and institutional investors, and variance swaps - instruments offering pure exposure to volatility - have become hugely popular.

A whole new range of variance-related products and strategies have been created by dealers, such as variance options, 'up-var' swaps and 'gamma' swaps (see page S2). But is the market in such instruments really ready to take off?

It is not surprising that structured products houses are pushing these instrumen

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