RISK MANAGEMENT: THE IMPORTANCE OF THE GREEKS IN THE ESTIMATION OF THE RISK IN FINANCIAL PORTFOLIOS COMPOUND BY DERIVATIVE PRODUCTS

Abstract

The article is based on the study of the different forms in which financial institutions and investors measure the risk of the operations they realize on the market. Today, most investment portfolios include derivative products (mostly options), which is why this work is focused on the risk management of portfolios which include such products. The article describes some methods of assessing and managing derivatives. Most of the above mentioned methods will inevitably require the use of the Greeks as indicators of various types of risks. All theoretical explanations rely on numerical examples in order to demonstrate the practical application of the methods and tools studied.