{'fraction_non_alphanumeric': 0.01943198804185351, 'fraction_numerical': 0.0, 'mean_word_length': 5.504854368932039, 'pattern_counts': {'":': 0, '<': 0, '<?xml version=': 0, '>': 0, 'https://': 0, 'lorem ipsum': 0, 'www.': 0, 'xml': 0}, 'pii_count': 0, 'substrings_counts': 0, 'word_list_counts': {'cursed_substrings.json': 0, 'profanity_word_list.json': 0, 'sexual_word_list.json': 0, 'zh_pornsignals.json': 0}}
Contracting for Financial Execution

Financial contracts often specify reference prices whose values are undetermined at the time of contracting, which makes them prone to manipulation. To study such situations, we introduce a stylized model of financial contracting between a client, who wishes to trade a large position, and her dealer. Under certain conditions, a simple contract based on the market volume-weighted average price (VWAP) emerges as the unique optimal solution to this principal-agent problem. This result explains the prevalence of guaranteed VWAP contracts in practice and also suggests considerations for the optimal design of financial benchmarks.