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Hedging in complete markets driven by normal martingales

Youssef El-KhatibNicolas Privault — 2003

Applicationes Mathematicae

This paper aims at a unified treatment of hedging in market models driven by martingales with deterministic bracket M , M t , including Brownian motion and the Poisson process as particular cases. Replicating hedging strategies for European, Asian and Lookback options are explicitly computed using either the Clark-Ocone formula or an extension of the delta hedging method, depending on which is most appropriate.

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