Journal of Risk

Risk.net

Bits, bets, and making book on an index

George S. Oldfield

ABSTRACT

This paper develops the concept of a superpool, a new way to create synthetic index derivative instruments. A superpool clarifies the links between index investments, insurance contracts, index derivatives, and index bets. In a superpool, equivalent risk-neutral probabilities are operational measures that are central to pricing and odds formation. A superpool also provides a way to offer index derivatives without the superpool itself matching the index. Moreover, gaming techniques lead to simple mechanisms for price or odds quotations. Finally, forward and futures superpools can be developed too.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

If you already have an account, please sign in here.

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: