Leland O'Brien Rubinstein Associates, Inc.: Portfolio Insurance

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Leland O'Brien Rubinstein Associates, a small financial advisory firm founded in 1980, has created a successful business by selling a product commonly known as portfolio insurance. Portfolio insurance is a trading strategy that institutional investors use to establish a floor on the value of their equity portfolios, by essentially manufacturing a put option on a broad market index. The crash of 1987 highlights the flaws of this manufacturing process and forces principals of LOR to consider what to do next.
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