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Risk magazine

Ex-NAB traders to stand trial

Two former National Australia Bank (NAB) forex options traders, Vincent Ficarra and Gianni Gray, are to stand trial for their alleged part in the A$360 million ($275 million) rogue trading scandal uncovered by the bank last year.

Variance swaps and non-constant vega

Variance swaps have gained in popularity due to their ability to provide investors with purevolatility exposure – a fairly stable gamma exposure despite changes in the value of theunderlying. The vega exposure of this product, however, varies linearly…

Time for multi-period capital models

Several financial institutions use single-period models to determine their credit portfolio lossdistribution, calculate their loss volatility and assign economic capital. Here, Kevin Thompson,Alistair McLeod, Panayiotis Teklos and Shobhit Gupta…

Smile dynamics II

In an article published in Risk in September 2004, Lorenzo Bergomi highlighted how traditionalstochastic volatility and jump/Lévy models impose structural constraints on the relationshipbetween the forward skew, the spot/volatility correlation and the…

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