Retail structured products markets have shown strong activity in recent years due to attractive rates and volatility levels, positive past performance and larger number of investors starting to appreciate the benefits they bring around capital protection and yield generation.
When a structured product is brought to market it needs an investment bank to hedge it and to pay out the contracted returns to the investor at maturity. This asset creation is what makes a structured product a tangible investment. Hedging needs to take account of whatever market scenarios occur during the product lifetime and risk managing structured products and derivatives is a complex and multi-faceted task to conduct long term. The most important hedge of all is the “delta&r
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