MANAGING THE USE OF DERIVATIVE INSTRUMENTS FOR PORTFOLIO RISK PURPOSES

Abstract

The priority in portfolio management is a good risk assessment and management. Of great importance is the margin that an asset portfolio guarantor must use with specific expertise in certain areas of market temporal inefficiency in order to improve its management performance. The relevant validity of the financial market and the emphasis laid on risk management carried along the development of financial instruments tailored to risk management. New derivative financial instruments have revolutionized the methods of portfolio management, of corporate treasury management, of banking management and, more generally, all financial strategies.

Keywords

• risk management
• portfolio management
• Treasury management
• hedging
• derivative structures
• financial strategies
• options
• futures
• OTC products
• securities traded outside the Stock Exchange
• financial leverage
• PUT options
• CALL options
• bull spread
• binomial model