A pricing model for Vix options developed by and deployed at Morgan Stanley earned its creator Quant of the Year honors in the recently announced Risk 2008 Awards from Risk Magazine .

Vix options are options based on an index designed to track market volatility on the Chicago Board Options Exchange. Determined by option-trading activity, the Vix is used as an indicator of investor sentiment, suggesting negative sentiment when up positive sentiment when down.

Over the last year, the pricing model has been helping clients and the Firm hedge their risk on these instruments by making what moves them up and down in the market more transparent.

For the Firm, having the minds and the model continues an on-going deepening of the understanding and practice of risk management.

In making their decision, the editors noted particular difficulty in 2008. "This year's awards were among the most difficult Risk ‘s editorial team have ever had to judge," they wrote.

After submitting applications covering the last 12 months, candidates who made a shortlist were interviewed. A due-diligence process followed, with editors speaking with the applicants' clients.

The deciding criteria included liquidity provision, innovation, infrastructure, systems, organization and client service - in particular, helping clients with financing or risk management solutions in the third and fourth quarter.