The doubtful future future of portfolio insurance: will benefits outweigh costs?
Article Abstract:
The Oct 1987 stock market crash was costly both to stockholders and to those who insure stock portfolios. Portfolio insurance generally held up to its promise to stockholders, but at great expense to the insurers. The current question is how much more expensive portfolio insurance will become if an unstable market is assumed. The utility of the futures market in implementing portfolio insurance strategies has also been curtailed by authorities on the stock and futures markets who have restricted market liquidity. The political and economic climate may also curb portfolio insurance, thought by some to have contributed to the crash. Alternative safeguards are likely to be investigated in the future, such as buying listed put options or selling stocks rather than futures. There is also the possibility of formal regulation of portfolio insurance and the futures market.
Publication Name: Cashflow Magazine
Subject: Business
ISSN: 0196-6227
Year: 1988
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Futures Guarantee Loan Rates for Up to 3 Years
Article Abstract:
Futures are now being used to guarantee loan rates for up to three years. Interest rate changes are no longer a factor in setting up budgets. The interest rate is guaranteed and the lender hedges in the futures market to uphold the guarantee.
Publication Name: Cashflow Magazine
Subject: Business
ISSN: 0196-6227
Year: 1984
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