The infimum of initial costs of admissible superhedging portfolios. Positive pricing kernels supply lower bounds: if and , then whenever these expectations exist.
Articles by others on the same topic
Superhedging is a financial concept primarily used in the context of options and contingent claims. It refers to a strategy where an investor takes a position to completely hedge against potential losses from a certain financial obligation or payoff, ensuring that the worst-case scenario is covered, regardless of market conditions. The "superhedging price" is the minimum cost at which an investor can acquire the necessary financial instruments (like options or other derivatives) to achieve this complete hedge.