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An example: Non-tradable asset: VIX index; Tradable assets: VIX Futures, VIX Options


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The concept of a tradable asset is closely related to the principle of (no-)arbitrage. Much of quant finance is about the connection between the price of a derivative and the price of its underlying. The fundamental reason that there is a connection at all, is the possibility to set up self-financing trading strategies in the underlying(s) which replicate ...



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