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What Is the Difference between a Variance Swap and a Volatility Swap?

A Variance Swap pays off based on the realized variance (volatility squared), while a Volatility Swap pays off based on the realized volatility (the square root of variance). Variance Swaps are generally preferred because their payoff structure is easier to hedge dynamically using a portfolio of options.

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What Is the Difference between PPS and PPLNS Mining Pool Reward Systems?
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