IPOs Volatility and Stabilizing Tools

Download PDF IPOs volatility Initial returns of initial public offerings are usually large, averaging 15.1% over the 1965–2004 period (excluding the dot.com bubble interval that would further boost IPOs returns). For investors that can buy IPOs at the offer price, IPOs are a good short-run investment. However, we should care Read more…

Flirting with Variance

Download PDF Introduction Variance swaps are OTC derivatives that allow investors to get direct exposure to the volatility of an underlying product, such as stock indexes, exchange rates and other asset classes. They initially gained popularity during the early 2000s following the advances in derivatives pricing theory. Their pure exposure Read more…

Volatility Play on the Hidden Gold-Yuan Peg

Reserve Currencies A reserve currency is defined as a currency held by government for international payment purposes. The most important usages are: Repay back international debt (generally issued in reserve currencies) Defend the domestic currency against depreciation Improve the government credit rating Reserve currencies are many. The IMF chooses the Read more…