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Options, Futures, and Other Derivatives (9th Edition) – Book Review

Options, Futures, and Other Derivatives by John C Hull covers derivative markets and risk management. Readers are expected to know basic finance, probability and statistics. A novice to options, futures, contracts and swaps will be hand held through the concepts by the author.

The author has also tried to maintain a delicate balance with regards to the mathematical usage. The non-essential mathematical material is put under appendices at the end of each chapter. Mathematical concepts when used, are explained in depth with several examples provided.

Options, Futures, and Other Derivatives

The areas covered in the book Options, Futures, and Other Derivatives are:

Mechanics of futures markets, determination of forward and future prices, a model of the behaviour of stock prices, Black-Scholes model, options on stock indices, currencies and futures, the greek letters, volatility smiles, value at risk (VAR), estimating volatilities and correlation, numerical procedures, exotic options, martingales and measures, interest rate derivatives: the standard market models, interest rate derivative: models of the short rate, interest rate derivatives, credit risk, credit derivatives, real options, insurance, commodity and energy derivatives and lessons from derivative mishaps, convexity, timing and Quanto adjustments, HJM, LMM and Multiple zero curves and real options.

Glossaries for notation, terms and software are also provided. A new version of the DerviaGem software is enclosed. This has an options calculator, application builder and two excel applications included.

John.C.Hull is Professor of Risk Management and Derivatives at the Rotman School of Management.
Hull is an editor of the Journal of Derivatives (since 1993), The Review of Derivatives Research (since 1993), the Journal of Derivatives Use, Trading & Regulation (since 1994), the Canadian Journal of Administrative Studies (since 1996), the Journal of Risk (since 1998), the Journal of Bond Trading and Management (since 2001), the Journal of Derivatives Accounting (since 2002) and the Journal of Credit Risk (since 2004).

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