Dear colleagues, On Monday, May 28, 2000, 16.00-17.30, SZ VI, IHS, Stumpergasse 56, 1060 there will be a talk by Dominique Y. Dupont at EURANDOM and Board of Governors, Washington on "Hedging Barrier Options: Current Methods and Alternatives" Abstract This paper applies to the static hedge of barrier options a technique, mean-square hedging, designed to minimize the size of the hedging error when perfect replication is not possible. It introduces an extension of this technique which preserves the computational efficiency of mean- square hedging while being consistent with any prior pricing model or with any linear constraint on the hedging residual. This improves on current static hedging methods, which aim at exactly replicating barrier options and rely on strong assumptions on the availability of traded options with certain strikes or maturities, or on the distribution of the underlying asset. JEL Classification: G12, G13, C63. Key words: Barrier Options, Static Hedging, Mean-Square Hedging best gabe ______________________________________________________________ Gabriel S. LEE Institute for Advanced Studies Department of Economics and Finance Stumpergasse 56 A-1060 Vienna, AUSTRIA Email: gabriel.lee(a)ihs.ac.at Tel: +43.1.59991.141 Fax: +43.1.597.0635 Homepage: http://www.ihs.ac.at/~lee/