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Getting physical
- By Steve Leppard
- Published 10/11/2007
- Trading strategies
- Unrated
Asset-backed trading strategies usually employ a combination of physical positions, which are subject to physical risk; and financial hedging intruments, which are not. Here, Steve Leppard shows how value-at-risk, applied to this combined risk scenario, can go a long way towards the thorny issue of hedging physically risky power generation assets.
