This updated edition offers a comprehensive and accessible text on derivatives markets, balancing introductory and advanced topics. It includes extensive updates on electronic trading, globalization, hedge funds, and financial scandals, featuring over 50 text boxes with applied vignettes and historical anecdotes.
This text is designed for investment professionals who have not previously dealt with derivatives, and for individual investors who are trying to get a basic understanding of these financial instruments. From the basics of futures, options and swaps, to option combinations such as straddles, strangles, bull, bear and butterfly spreads, the study aims to provide explanations of trading, pricing and the risk management implications of these investment instruments.