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Credibility derivatives: Difference between revisions
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{{g}}[[Credibility derivatives]] were once the principal means of [[hedging]] [[tail risk]] in fashion industry. They grew out of the popular pastime of [[taste arbitrage]], a much simpler [[physically-settled]] contract on the spot market. | {{g}}[[Credibility derivatives]] were once the principal means of [[hedging]] [[tail risk]] in fashion industry. They grew out of the popular pastime of [[taste arbitrage]], a much simpler [[physically-settled]] contract on the spot market. | ||
===Origins=== | ===Origins=== | ||
History has it that [[Albert Coldfall]], an enterprising analyst in the [[taste arbitrage]] desk at [[Wickliffe Hampton]] stumbled upon the idea | History has it that [[Albert Coldfall]], an enterprising analyst in the [[taste arbitrage]] desk at [[Wickliffe Hampton]] stumbled upon the idea of [[credibility derivatives]] when shopping for records in Essex one Sunday in the 1980s. | ||
Coldfall noticed that his local record store in Chingford, which carried [[Rick Astley]]’s turgid debut ''[[Whenever You Need Somebody]]'' at its full price, had sold out of it, while fully fifteen copies of Keith Jarrett’s seminal, hard-to-find and unstintingly cool ''[[The Köln Concert]]'' lingered disregarded in a sale bin for a pound fifty each. | Coldfall noticed that his local record store in Chingford, which carried [[Rick Astley]]’s turgid debut ''[[Whenever You Need Somebody]]'' at its full price, had sold out of it, while fully fifteen copies of Keith Jarrett’s seminal, hard-to-find and unstintingly cool ''[[The Köln Concert]]'' lingered disregarded in a sale bin for a pound fifty each. | ||