I understand that Garch models are useful to predict volatility. But are they useful for hedging in practice? If I want to hedge volatility, why shouldn't I just use a Variance Swap?

In other words, other than forecasting volatility, what is the use of Garch type models?

  • $\begingroup$ What makes you think there is or should be another use for GARCH-like models? They would be as useful for hedging vol as BS would be for hedging option positions (ie, not very as they're both imperfect models) $\endgroup$ – Chris Jul 14 '20 at 1:02
  • $\begingroup$ Are you looking for GARCH based option pricing models to hedge your positions? $\endgroup$ – Alex Jul 14 '20 at 11:51

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