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Inside insider trading

Securities regulators need techniques to detect insider trading if it occurs and determine the extent of possible sanctions. Here, the author proposes a new probabilistic methodology particularly suited to illiquid markets.

New products, new risks

Structured equity products marketed in Europe present considerable risk management challenges. The author shows the danger of using naive model-based approaches to price and hedge them.

Analytical approach to credit risk modelling

The increasing popularity of VAR-based credit portfolio risk models has led to a growing recognition that Monte Carlo techniques are inadequate for economic capital calculations. Here, Michael Pykhtin and Ashish Dev present a new analytical alternative…

Himalaya options

Nothing epitomises the challenges of complex equity derivatives better than the so-called ‘mountain range’ products. In the second article looking at the challenges of this market, Marcus Overhaus analyses a particular product, the Himalayan option,…

Pushing the equities button

The increase in size, diversity and sophistication of the equity derivatives markets has spurred demand for more efficient technology. How are firms responding?

Books | The equities architect

Structured Equity Derivatives, the Definitive Guide to Exotic Options and Structured Notes by Harry Kat, John Wiley & Sons. 392 pages, $89.95. ISBN 0–461–48652–3

The risk breaker

To claw its way back from its problem-loan nadir in the late 1990s, Bank of America embraced risk-adjusted return metrics and credit risk distribution techniques. Amy Brinkley is overseeing its turnaround.

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