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What is a Target Redemption Forward (TARF)? The hidden risks of this exotic FX option. If Lewis Carroll had been a risk manager he might have written: “Beware the TARF my son The vol that bites, the losses that snatch Exotic options are no fun When you learn there’s always a catch” TARFs (or Target Redemption Forwards) are complex foreign currency derivatives (a form of exotic option). In essence they provide enhanced protection against adverse currency moves but terminate if

Implied vs historical volatility explained: what rising vols mean for your earnings John, our by now well-known Head of Procurement for Fancy Gizmos, was sitting at his desk and working through all the New York Times puzzles. Since he had implemented Forge aHedge and automated his copper hedging and risk management he had freed up a lot of time cleaning data, downloading forecasts, and checking and double checking a sprawl of spreadsheets. I mean he had to use his extra time