A Step-by-Step Guide to Forwards, Futures, Swaps and Options
Andrew M. Chisholm
This book can be downloaded and read in iBooks on your Mac or iOS device.
Derivatives are everywhere in the modern world and it is important for everyone in banking, investment and finance to have a good understanding of the subject. Derivatives Demystified provides a step-by-step guide to the subject, enabling the reader to have a solid, working understanding of key derivative products.
Adopting a highly accessible approach, the author explains derivative products in straightforward terms and without the complex mathematics that underlie the subject, focusing on practical applications, case studies and examples of how the products are used to solve real-world problems. Derivatives Demystified follows a sequence that is designed to show that, although there are many applications of derivatives, there are only a small number of basic building blocks, namely forwards and futures, swaps and options. The book shows how each building block is applied to different markets and to the solution of various risk management and trading problems.
This new edition will be fully revised to reflect the many changes the derivatives markets have seen over the last three years. New material will include a comprehensive history of derivatives, leading up to their use and abuse in the current credit crisis. It will also feature new chapters on regulation and control of derivatives, commodity derivatives, credit derivatives and structured products and new derivative markets including inflation linked and insurance linked products.
Derivatives Demystified is essential reading for everyone who operates in the financial markets or within the corporate environment who requires a good understanding of these important financial instruments.
Very Good Introduction
Mr. Chisolm is an outstanding writer and has done a great job of taking a subject that is necessarily complex and presenting it in a very concise and coherent book.
This is an introductory level book, the perfect reference for someone with an interest in derivatives, someone who would like to better understand business/finance news, and students. The descriptions are very well written and the examples with graphics very useful and support the descriptions well.
The only reason I didn't give it 5 stars is that it is just an introductory book and there isn't much here for professionals dealing daily in derivatives. I trade futures and options daily and those portions were good, but they are simple and the examples very generic. I appreciated descriptions of the over the counter instruments and structures that I don't deal with and in no way do I think this is adequate preparation to deal in derivatives professionally.
I highly recommend the book for journalists assigned to write about finance or anyone that isn't a derivative trader or finance professional that may come in contact with these instruments and structures. This book will give a solid foundation to converse with those that do deal in derivatives and better understand the risks, rewards, and tradeoffs inherent in them.