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Derivatives




Keep It Simple Stupid


The language of derivatives (such as delta, DV01, vega, gamma, notionals, vol-vol, fugit, etc) may be hard and confusing to understand and interpret by investors, fellow employees, customers, and even many seasoned investors and dealers. As such, departments working to build momentum for a new derivative product will have to consider this concept keep it simple, stupid! or “KISS” (which was originally an old adage used in Wall Street). For example, fellow employees, retail brokers, and investors need, in order to consider an investment in a new derivative product, to understand it in simple terms before moving on to adopt it. Using familiar concepts and parlance will help to market structured products more easily and readily than using complicated and abstruse expressions and industry jargon.

 



ABC
Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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