The quest for the perfect tail risk solution

Tail risk has become a hot topic as nervous investors seek assurances and product creators try to second-guess what the governments and the financial markets may throw at them next. Hannah Collins investigates the strategies and products on offer to cope with the need to take view on an uncertain future


Tail risk, broadly defined as the risk of an asset moving more than three standard deviations from its current price, has typically been associated with the fear of future loss. But the concept of tail risk has taken a new direction since the beginning of the year, with some market participants now labelling the potential of missing the "rebound of the century" as a tail risk.

"When talking about tail risk, most investors are thinking about a Lehman Brothers story with the whole market going to

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