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Risks
Special Issues
Financial Investment, Derivatives Hedging, and Risk Management
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Financial Investment, Derivatives Hedging, and Risk Management

A special issue of Risks (ISSN 2227-9091).

Deadline for manuscript submissions: 28 February 2027 | Viewed by 2121

Special Issue Editors

Prof. Dr. Vivek Bhargava

E-Mail Website
Guest Editor
Lutgert College of Business , Florida Gulf Coast University, Fort Myers, FL 33965, USA
Interests: financial investments; derivatives; finance
Dr. Mukesh Chaudhry

E-Mail Website
Guest Editor
Lutgert College of Business, Florida Gulf Coast University, Fort Myers, FL 33965, USA
Interests: finance; hedge fund; volatility; risk management

Special Issue Information

Dear Colleagues,

The journal Risks is seeking high-quality original papers for a new Special Issue that endeavors to examine latest original research on derivatives hedging, financial investment, and risk management practices in capital markets, financial institutions, hedge funds, mutual funds, and futures and options markets.

It is noteworthy that financial investment risk management is a crucial practice that helps investors protect their portfolios from unexpected losses due to market volatility, economic changes, or geopolitical events. At its core, risk management involves identifying potential risks, measuring their impact, and implementing strategies to mitigate them. One effective tool in this process is the use of derivatives for hedging purposes.

The researchers and practitioners may also consider topics related to how derivatives offer powerful risk management strategies, but may carry their own risks, such as counterparty risk, liquidity risk, and due to its complexity, some unknown risks. Therefore, effective financial risk requires a thorough understanding of these instruments and a well-structured approach to their use. Areas of interest include, but are not limited to, the following topics:

  • Performance evaluation of active versus passive investment strategies;
  • Crypto currencies as an investment asset—risk-return analysis;
  • Portfolio optimization techniques using modern portfolio theory versus machine learning models;
  • Investment strategies during high inflationary periods;
  • The role of derivatives in market liquidity and efficiency;
  • The use of derivatives by institutional investors;
  • The impact of derivatives trading on underlying asset volatility;
  • Hedging with derivatives;
  • Measuring and managing market risk;
  • Tail risk management using derivatives instruments;
  • Application of artificial intelligence in financial risk assessment.

Prof. Dr. Vivek Bhargava
Dr. Mukesh Chaudhry
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 250 words) can be sent to the Editorial Office for assessment.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Risks is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1800 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • financial risk management
  • hedging
  • derivatives
  • volatility
  • performance evaluation
  • optimization
  • active versus passive investment
  • Value-at-Risk (VaR)
  • liquidity and efficiency

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Further information on MDPI's Special Issue policies can be found here.

Published Papers (2 papers)

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Research

27 pages, 950 KB  
Article
Contagion and Default Risks in Derivative Pricing: A Hawkes-Based Model
by Francis Agana and Eben Maré
Risks 2026, 14(3), 53; https://doi.org/10.3390/risks14030053 - 2 Mar 2026
Viewed by 407
Abstract
Modern financial systems do not exist in isolation but form part of a complex global network of interconnected financial systems. This globalization of financial systems significantly increases the risk of contagion in financial markets, impacting asset prices and other important economic factors, including [...] Read more.
Modern financial systems do not exist in isolation but form part of a complex global network of interconnected financial systems. This globalization of financial systems significantly increases the risk of contagion in financial markets, impacting asset prices and other important economic factors, including interest rates and market volatility. This phenomenon informs not only investors’ investment strategies but also the prices of contingent claims. In this article, we present a derivative pricing model in an incomplete and globalized financial market. To appreciate the dynamics and impact of some important market factors, particularly default risks due to contagion, we consider two different financial markets with defaultable assets: in one market, we consider a stock whose price process follows a Heston stochastic volatility model, and in the other, a stock that follows a Hawkes-type jump diffusion model whose intensity is subjected to external systemic shocks. In both markets, we derive an indifference price for a contingent claim that is subject to the risk of default and show the impacts the investor’s risk aversion and external shocks on the price of the contingent claim. Full article
(This article belongs to the Special Issue Financial Investment, Derivatives Hedging, and Risk Management)
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19 pages, 461 KB  
Article
The Impact of Financial Derivatives on European Bank Value and Performance
by Bassam Al-Own, Mohannad Obeid Al Shbail, Zaid Jaradat and Ghaith N. Al-Eitan
Risks 2026, 14(2), 39; https://doi.org/10.3390/risks14020039 - 12 Feb 2026
Viewed by 1133
Abstract
Using a panel dataset of 385 European bank-year observations covering the 2012 to 2022 period, this study aimed to investigate the impact of derivatives on bank value and performance. We used bank-level panel data and conducted several multivariate statistical analyses, i.e., ordinary least [...] Read more.
Using a panel dataset of 385 European bank-year observations covering the 2012 to 2022 period, this study aimed to investigate the impact of derivatives on bank value and performance. We used bank-level panel data and conducted several multivariate statistical analyses, i.e., ordinary least squares (OLS), random-effects, and feasible generalized least squares (FGLS) regressions, to examine the ways in which using derivatives for different purposes influences bank value and performance. The regression results indicated a positive and significant association between hedging derivatives and bank performance, while trading derivatives had a negative effect on bank performance and value. Furthermore, the findings suggest that using such derivatives for hedging does not enhance value. Regarding the practical implications of this study and banking sector soundness, financial market regulators and policymakers should be cautious of the potential negative consequences of extensive trading derivative use. In particular, maintaining an acceptable level in this regard is essential to ensuring that the costs of engaging in derivative markets do not surpass their benefits. Hedging through derivatives may not translate into higher bank value, thus managers should justify to investors how such hedging derivatives enhance shareholder wealth. Additional research could focus on whether using derivatives in the banking industry offers any palpable advantage in the intermediate to long term; whether their use by non-financial organizations has different implications that than of financial firms; and the extent to which such financial instruments are useful for enhancing bank value. Full article
(This article belongs to the Special Issue Financial Investment, Derivatives Hedging, and Risk Management)
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