variance swap การใช้

Any volatility smile model which prices vanilla options can therefore be used to price the variance swap.
A variance swap can be perfectly statically replicated through vanilla puts and calls whereas a volatility swap requires dynamic hedging.
For example, using the Heston model, a closed-form solution can be derived for the fair variance swap rate.
This makes the payoff of a variance swap comparable to that of a volatility swap, another less popular instrument used to trade volatility.
However, the variance swap is preferred in the equity market because it can be replicated with a linear combination of options and a dynamic position in futures.