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Two distinguished Morgan Stanley “alumni” discuss how their management of risk and uncertainty has not only preserved but increased the profitability of their businesses. In both cases—one involving a commodities trading operation and the other a long‐short hedge fund—the key has been to find cost‐effective ways to “cut off the left tails” of the distribution by avoiding naked long or short positions and creating option‐like payoffs with limited downside. In the case of the hedge fund, the combination of longs and shorts with the use of other risk‐reducing strategies has enabled the fund's managers to produce twice the market's returns with only half the volatility (and only one losing year) during the 18‐year life of the fund. In the case of the commodities trading operation, the strategy is described as combining ownership of physical assets with the use of option pricing models to create what amount to “long gamma positions in the asset” that “produce payoffs regardless of whether the asset goes up or down in value.”

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Plaque psoriasis is a chronic, inflammatory, immune-mediated skin disorder that negatively impacts a patient's quality of life, both physically and psychologically 1,2 In individuals with a genetic predisposition, environmental factors (eg physical and psychological stress) may trigger the initiation of psoriasis, beginning with the activation of dendritic cells (Figure 1) 1,3 Topical treatments containing corticosteroids and vitamin D analogues target key steps in psoriasis pathogenesis and are essential, well-established first-line treatments for patients with mild-to-moderate psoriasis 4,5 Here we discuss recent data showing the anti-inflammatory and immunomodulatory mechanisms underlying the efficacy of fixed-dose combination therapy versus topical steroidal monotherapy, and explore developments in topical drug delivery and the clinical relevance of these data Corticosteroid and vitamin D analogue combination treatment addresses therapeutic goals, resulting in increased effectiveness versus monotherapyThe treatment goal is to clear the psoriatic plaques by inhibiting the underlying inflammation via immunomodulation (rather than immunosuppression), thereby normalizing skin homeostasis, keratinocyte proliferation and differentiation Both corticosteroids and vitamin D analogues inhibit pro-inflammatory mediator release ( Figure 1) from dendritic cells, Type 1 and 17 (cytotoxic and helper) T-cells, and keratinocytes. [6][7][8][9] Vitamin D analogues exert normalizing effects on the hyperproliferation and abnormal differentiation of keratinocytes and also have immunomodulatory effects 6,10 Recent preclinical data show that fixed-dose combination treatment provides significantly increased inhibition of pro-inflammatory cytokines compared with monotherapies ( Figure 2) 11 The effect of fixed-dose combination therapy on cellular targets in psoriasis pathophysiology is summarized in Figure 3a-d Corticosteroid and vitamin D analogue combination topical treatment may provide long-term management of psoriasisUpon clearance of psoriatic plaques and normalization of skin homeostasis, the therapeutic objective shifts to the maintenance of a relapse-free state as psoriatic inflammation tends to recur in previously affected skin locations 12,13 -This may be caused by the expression of inflammatory cytokines upon reactivation of immune cells present in the apparently normalized, plaque-free skin after treatment 12,13 New data indicate that combination treatment is able to induce regulatory T-cells, as well as counteract the activation and differentiation of cytotoxic T-cells, more effectively than corticosteroids alone ( Figure 3e Attenuates reduced skin flexibility/ elasticity observed in topical steroidal monotherapy Downward arrow indicates down-regulation, upward arrow indicates up-regulation, equal sign indicates no effect. The data presented here are based on non-inflamed skin. AMP, antimicrobial peptide; KC, keratinocyte Challenges of drug delivery in topical formulationsPoor penetration of active ingredients int...