Credit Risk: Definition and Management
Understanding credit risk is important for developing a general understanding of derivatives markets and how they are affected by risk. What is Credit Risk? Credit risk is a significant element…
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What is hedging: Managing Financial Price Risk
To answer the question “what is hedging?” in the general sense, we can imagine a company entering into a transaction whose sensitivity to movements in financial prices offsets the sensitivity…
Risk Assessment: Scenario Analysis and Value-at-Risk
The derivatives Greeks are tools derivatives end-users employ to describe and to characterize the various exposures to fluctuations in financial prices inherent in a particular position or portfolio of instruments.…
Risk Holes and Liquidity Risk: Definition and Examples
Professional investment managers use a variety of sophisticated tools to measure risk. Two important dimensions of risk are described as risk holes and liquidity risk. Risk Holes and Liquidity Risk:…
What’s a dividend payment?
What are dividends? The history of dividends began when companies were deemed to be legal entities in their own right under the law.
Greek Options: Intro to Option Strategies
Greek Options are specific risk aspects that capture the sensitivities of an option value to market parameters such as time, interest rate and volatility. An important aspect to consider in…
