We study performance and competition among high-frequency traders (HFTs). We construct measures of latency and find that differences in relative latency account for large differences in HFTs' trading performance. HFTs that improve their latency rank due to colocation upgrades see improved...

A company's overall risk profile is in no small measure determined by how much liquidity it has available to meet unforeseen cash outflows, and by how much debt leverage it has in its balance sheet, which may limit its access to new funding. In addition, the overall risk profile is clearly also...

Risk appetite has become a byword for bringing peoples' attention to the question of how much risk the organization is prepared to accept. While we agree that more attention on risk is often desirable, the current usage of the concept is highly inconsistent and may only serve to make firms more...

This study tests if managerial preferences explain how firms hedge, i.e. how they choose between linear contracts and put options, and if they finance these hedging positions with cash-on-hand or by selling upside (call options). Using hand-collected data on derivative portfolios we characterize...

A strategically minded CFO will realize that strategic corporate risk management is about finding the right balance between risk prevention and proactive value generation. Efficient risk and performance management requires adequate assessment of risk and risk exposures on the one hand and...