Instruct: Identify the main and secondary category of Arxiv papers based on the titles and abstracts
Query: Hedging large risks reduces the transaction costs   As soon as one accepts to abandon the zero-risk paradigm of Black-Scholes,
very interesting issues concerning risk control arise because different
definitions of the risk become unequivalent. Optimal hedges then depend on the
quantity one wishes to minimize. We show that a definition of the risk more
sensitive to the extreme events generically leads to a decrease both of the
probability of extreme losses and of the sensitivity of the hedge on the price
of the underlying (the `Gamma'). Therefore, the transaction costs and the
impact of hedging on the price dynamics of the underlying are reduced.

1
The categories of this paper are: cs
6
The categories of this paper are: astro-ph
37
The categories of this paper are: supr-con
32
The categories of this paper are: atom-ph
20
The categories of this paper are: acc-phys
35
The categories of this paper are: mtrl-th
11
The categories of this paper are: hep-lat
21
The categories of this paper are: adap-org
31
The categories of this paper are: ao-sci
12
The categories of this paper are: nucl-th
23
The categories of this paper are: solv-int
8
The categories of this paper are: hep-ex
34
The categories of this paper are: chem-ph
10
The categories of this paper are: q-bio
18
The categories of this paper are: econ
13
The categories of this paper are: quant-ph