DERIVATIVES

An Option Pricing Model Based on Market Factors

Posted on February 21, 2023 By Harbourfront Technologies

In option pricing theory, the risk-neutral measure is a measure that allows for the valuation of financial instruments such as options. The risk-neutral measure is obtained by assuming that investors are indifferent to the risk and that the expected rate of return on all assets …

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RISK MANAGEMENT

Tail Risk Hedging Using Put Options: Is It Effective?

Posted on May 17, 2023 By Harbourfront Technologies

Tail risk hedging using put options is a risk management strategy employed by portfolio managers to protect against severe market downturns and mitigate potential losses. Put options are financial instruments that give the holder the right, but not the obligation, to sell an underlying asset …

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TRADING

Selecting Pairs Using Principal Component Analysis

Posted on May 28, 2023 By Harbourfront Technologies

Pairs trading is a market-neutral strategy that involves identifying two correlated securities and taking positions based on their relative price movements. The concept behind pairs trading is to identify pairs of assets that historically exhibit a high degree of correlation, meaning they tend to move …

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Latest Post

Is Life Insurance an Asset? Understanding the Financial Nature of Life Insurance Policies

Posted on May 28, 2023 By Maria Deneuve

Life insurance is a financial product that provides protection and financial security to individuals and their families in the event of the policyholder’s death. While it is primarily seen as a means of providing a death benefit, questions may arise …

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