A risk-technology solution
Through the Law of Large Numbers, the loss experience of a group of exposures will become increasingly predictable as qualifying additional risks are added. A large and growing pool of diverse individual risks will thus cause the impact of a single adverse event to be broadly diffused, and the mean experience of the pool to become increasingly stable.
DelphX employs that science in the new default-hedging securities and supporting technology it provides to dealers. Those utilities enable dealers to:
Secured default protection
Covered Put Options™ (CPOs) – new risk-hedging securities that enable dealers to offer qualified institutional buyers cost-effective default protection for millions of credit issues.
Enhanced credit yields
Covered Reference Notes™ (CRNs) – new credit-linked securities that enable dealers to offer qualified institutional buyers investment grade bonds offering material yield and potential alpha.
Liquid speculation
Through the DelphX platform, dealers can actively make markets in all CPOs, CRNs and underlying securities – enabling investors to speculate on the future pricing of CPO protection for any underlying security and generate additional returns through basis trading.
Continuous benchmark pricing
Continuously updating MAV≡n® pricing forecasts inform all participants of the current midpoint benchmark of dealer pricing for every CPO, CRN and underlying security.