Keeping your options open
The burgeoning popularity of credit default swaps has sparked much talk about the development of a market in credit options. Ian Clague asks whether 2003 will see the birth of this market and investigates the opportunities arising from credit options and the barriers to their growth
Options usually represent a major part of any derivative market. They are, in a sense, the perfect hedge, providing protection when the market moves against a portfolio and conveniently becoming irrelevant when market moves are favourable. In many ways options are like insurance to an investor: they can buy an asset but also buy the opportunity to sell it later at a certain price if the investment
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Markets
Euro Stoxx 50 to get major revamp
Removing supersector caps and more regular rebalancing could spur increased activity in eurozone index
Continuous verification holds key to keeping AI on track
Decision-by-decision testing will help users trust AI judgement calls
Jackpot for JGB asset swaps after hedging rush
Multi-leg trade turned profitable as corporate cross-currency hedging flows helped push yen swap rates above JGB yields
Forward volatility: a model-free framework for hedging options risk
A model-free approach to extracting, hedging and managing forward volatility risk
Panellists warm to Treasury plan to lend TGA cash in repo
Goldman’s Chambers backs the idea, while JP Morgan and BNY execs say payoff depends on repo trading above IORB
Hedge funds sit out Treasury market volatility
Flattening of yield curve prompts traders to scale back steepeners
Hedge funds reload UK rates bets after euro-led rout
Traders slowly returning to sterling market after ECB comments caused front-end and curve stop-outs
Why AI agents are like staff you can’t trust
Uncertainty implicit in GenAI systems means risk managers have to take a more adversarial approach
