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Structured products

Forging an index

Efforts by miner BHP Billiton to create an iron ore index that would represent the underlying benchmark for a series of derivatives instruments appear to be floundering as Chinese steel producers press hard for pricing advantage. Kathleen Kearney reports

Transition revamp

The asset transition business is undergoing a major transformation, with strong risk management and pre-trade analysis capabilities becoming an increasingly important service differentiator. How are transition managers meeting the needs of Asian clients?…

NYSID causes first monoline CDS default

An auction is to be held to settle credit derivatives linked to Syncora, the monoline formerly known as XL Capital Assurance, after a committee declared a credit event to have occurred on the firm on May 1.

Pricing options on film revenue

This article illustrates two models for cumulative revenues from films, a time-changed gamma process and a compound Poisson process, and how these models can be used to price options. Don Chance, Eric Hillebrand and Jimmy Hilliard find that while both…

Managing diversification

Attilio Meucci introduces a diversification index that represents the effective number of bets in a portfolio. With this index, based on entropy and constrained principal component analysis, he performs mean-diversification management adjusted for…

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