Volatility Institute at NYU Shanghai Talk

Many new kinds of derivative securities have been introduced in international financial markets.  Some of them have been tremendously successful.  Yet China has been quite cautious about allowing trading in these contracts, and the recent high volatility in the stock market has slowed innovation in this area.

Professor Stephen Figlewski's talk will focus on one of the most traditional of derivative instruments that has not yet been introduced in China: calls and puts on individual stocks. Options greatly expand the range of investment strategies that are available for retail and institutional investors, both to enhance returns and also, especially, to manage risk exposure in flexible and precise ways.  He will illustrate these properties using several of the most important option strategies. Most option strategies allow the investor to choose his or her exposure to price changes on the underlying stock, while maintaining strictly limited risk of loss on the downside.  Some option positions provide good profits even when the underlying stock's price doesn't move or even goes in the opposite direction. Other strategies can be used to get very favorable prices in entering or exiting a stock position. And some option trades don't depend on the direction of the stock price change at all, but on its volatility.

Stephen Figlewski, Professor of Finance at the New York University Leonard N. Stern School of Business, holds a B.A. in Economics from Princeton University and a Ph.D. in Economics from the Massachusetts Institute of Technology. He has published extensively in academic journals, especially in the area of financial futures and options. He is the founding Editor of The Journal of Derivatives and he also edits the SSRN's Derivatives eJournal series published over the Internet.  He is the director of the NASDAQ Derivatives Research Project, which supports research and sponsors conferences at Stern in derivatives, risk management, and financial engineering. Professor Figlewski has twice taken leave from NYU to work on Wall Street, doing research on equity derivatives and credit-sensitive securities, and he was at one time a member of the New York Futures Exchange and a Competitive Options Trader at the New York Stock Exchange.