The paper discusses the problem of hedging not perfectly replicable contingent claims by using a benchmark, the … pricing and hedging for an increasing number of not fully replicable benchmarked contingent claims. …

pricing under incompleteness is modeled by the choice of the market prices for risk. The hedging is performed under …

and market risk. We further discuss briefly the hedging of European options along with the local risk minimization … stochastic volatility models. And, we propose both a new vision and a general framework for valuing European options in the light … principle. Specifically, we attempt to find a strategy which dominates the usual partial hedging technique often imposed by …

-sloping implied-volatility skew in VIX options. This observation contradicts a common perception in the literature that jumps are …, without sacrificing analytic tractability. The model produces a good short-term fit to the implied volatility of index options …