Hedging structured products: the role of equity pricing models

This is because equities are considered to be the natural long-term asset class for growth. Equity markets, through indices and headline stocks are well known to all investors. In some markets, credit, FX and fixed income have a strong niche following due to market conditions or local preferences, but equities are in general the asset class of choice. Equity derivatives (calls, puts, complex or exotic options and their combinations) are the building blocks that investment banks use to create an