Derivatives
299 white papers and resources
Risk Library provides derivatives white papers which consider current issues and thinking, market conditions and how derivatives can be used to their best effect. In Business, a derivative is a form of contract where its value is derived from the value of underlying assets. Derivatives can be used to both hedge risk and for speculation. The most common types of derivatives are futures, options, forwards and swaps.
Shipping freight derivatives - theory and practice
As an inherently volatile industry, shipping is characterised by a high risk-high return profile, making its rates and prices difficult to forecast, and as a consequence business projects less accurately budgeted. The identification and management of any such business risks is imperative.
Yield enhancement on Asian equity indexes through call overwriting
Call overwriting (selling calls against stocks one holds) can both increase returns and lower risk, and is a common investment strategy in the US, Europe and Australia. RBS provides evidence why investors should also seriously consider covered call strategies on Asian equity indexes.
Market change – slow but certain
As the European Union’s (EU's) Carbon Market Initiative nears implementation of Phase III, Navita Systems’ Anette Nordskog discusses the recent developments in the carbon market, along with the practical and technological challenges it faces.
Hedging commodity exposure
Speaking at Energy Risk Asia, BNP Paribas’ head of Commodity Derivatives for Asia Pacific, Frederic Hervouet, discussed hedging strategies, products and commodity exposure at mining and resource companies.
Building on lessons learned
With African roots and a presence in 17 African countries and 33 countries worldwide, Standard Bank has been working with commodities clients since 1994. In 2006, the bank hired Janelle Matharoo as managing director, global head of energy sales & trading, to help grow the business. He talks to…
Using options to improve portfolio risk/returns
How can investors use options to improve the overall risk/return of a portfolio? Knowing that implied volatility has empirically exceeded realised levels, how do they choose between various yield-enhancement and risk-reduction strategies? Our analysis shows that systematic call overwriting is…
The rise of multi-currency options
Adrian Campbell-Smith (RBS Currency Options Trading) and Ben Hamdani (RBS Currency Structuring) examine the realm of multi-currency options and explain some of the reasons behind their increasing popularity.
Regulation & ETRM solutions
New financial regulation poses fresh challenges to companies’ financial technology and systems. In a Q&A sponsored by Sapient Global Markets, Energy Risk discusses with experts how they can respond and what will be the impact on market developments.
Recovery and development
The inflation market has had a challenging few months. In particular, many dealers were hurt by short positions in 0% inflation floors, causing sizeable losses for some firms.
The problems with generally used interpolation spaces
In a world increasingly focused on effective enterprise-level risk management, there are notable discrepancies in volatility management techniques. Murex proposes a cross-asset interpolation space with potentially significant risk management impacts.