Schweizer, Martin A guided tour through quadratic hedging approaches. (English) Zbl 0992.91036 Jouini, E. (ed.) et al., Option pricing, interest rates and risk management. Cambridge: Cambridge University Press. Handbooks in Mathematical Finance. 538-574 (2001). This is a broad exposition describing recent results and perspective of the development in the area of pricing and hedging options by using quadractic criteria. Two approaches are explained in detail, namely, a preference-free approach under incompleteness, and that one using surjective criteria according to which a dynamic trading strategy is chosen and option prices are computed. Special attention is paid to the case when the price process \(X\) is a local P-martingale. The possibility of a local risk-minimization in the general case are discussed, too. The latter method is compared with mean-variance hedging.For the entire collection see [Zbl 0967.91001]. Reviewer: Sergei V.Rogosin (Minsk) Cited in 132 Documents MSC: 91G20 Derivative securities (option pricing, hedging, etc.) 91-02 Research exposition (monographs, survey articles) pertaining to game theory, economics, and finance 60G99 Stochastic processes 91G80 Financial applications of other theories Keywords:financial market in continuous time; quadratic hedging approach; martingale; risk-minimization; self-financing PDFBibTeX XMLCite \textit{M. Schweizer}, in: Option pricing, interest rates and risk management. Cambridge: Cambridge University Press. 538--574 (2001; Zbl 0992.91036)