System and method for increasing yield from performance contracts

摘要

A method for increasing the yield from performance contracts having intrinsic volatility. The intrinsic volatility involves elements affected by changes that are controllable. The method involves converting a future upside potential value of the intrinsic volatility into a current monetary benefit, and using the current monetary benefit to hedge against future extrinsic volatility that could diminish the future upside potential value. The future extrinsic volatility involves elements affected by changes that are hedgeable. A corresponding system is also disclosed.