Similar to previous editions of Options, Futures and Other Derivatives (8th edition), this edition has several readers. Options, Futures and Other Derivatives (8th Edition) can be used as a teaching material for graduate students majoring in business, economics, financial mathematics and financial engineering, and can also be used as a teaching material for senior undergraduates with a good foundation in quantitative mathematics. In addition, practitioners in the derivatives market will find Options, Futures and Other Derivatives (8th Edition) a very useful reference book. I am very pleased that half of the readers who buy books are analysts, traders and other related practitioners in the derivatives market.
A key decision that the author of derivative products must make is the degree of application of mathematics. If the mathematics used in the book is too difficult, many students and practitioners will find the content unattainable. If it is too difficult to use the mathematics in the book, the discussion of many important issues will inevitably stay at a very simple level. In writing, I am very cautious about the mathematics and symbols used in the book. Some non-critical mathematical contents are either omitted or included in the appendix at the end of each chapter, and some contents can be obtained on the author's website. I have carefully explained the concepts that may be new to many readers and given many numerical examples of these concepts.
Options, futures and other derivatives (8th Edition) can be used as derivatives for introductory and advanced courses. Teachers can use this book in various forms in class. Teachers who teach derivative introductory courses can spend most of their class time in the first half of the book; Teachers who teach advanced derivatives courses can teach in different ways in the second half of Options, Futures and Other Derivatives (8th Edition). I find the contents of Chapter 35 very useful for both introductory courses and advanced courses.
What's new in this release?
Many contents of Options, Futures and Other Derivatives (8th Edition) have been improved and updated. Version 8 updates include:
1. Options, futures and other derivatives (8th edition) added a chapter (Chapter 8) to describe securitization and credit crisis. The new trend of financial market after the publication of the seventh edition is closely related to the content of chapter 8.
2. Options, futures and other derivatives (8th edition) have added more contents about commodity price simulation and commodity derivatives pricing (Chapter 33), and energy derivatives and other commodity derivatives have become more and more important in recent years.
3. The chapter on futures hedging (Chapter 3) has been simplified. In the appendix of this chapter, I introduced the capital asset pricing model, and several teachers have suggested this change.
In this issue, I introduced central settlement, liquidity risk and overnight index swap. After the credit crisis, these contents should be familiar to students.
5. In appendix 12A, I added the content of deducing Black Scholes Merton formula by using the limit of binary tree. Some teachers like to introduce Blake Scholes Merton formula like this.
6. When calculating the value at risk, I used the real market data during the credit crisis. On my website, readers can download the calculation table about these examples, which will make the reading materials more interesting and the homework questions more abundant.
7. In this edition, we introduce the contents of capital preservation securities, gap options, ratchet options and jump process to reflect the importance of these contents in derivative markets.
8. This edition has added some contents about the application of Waal-Siczek and CIR models, which can help readers to further understand key concepts and is very important for actuarial students and fund managers.
9.DerivaGem software has been updated several times, and now it can be used to price credit derivatives. This software also has Open Office and Linux versions of Mac. According to the needs of many users, I give the derivation program of software functions. At the end of Options, Futures and Other Derivatives (8th Edition), I made an easy-to-understand explanation.
10. At the end of each chapter, I added some new exercises.
software
Options, Futures and Other Derivatives (8th Edition) includes the derivative gem software version 2.0 1, which includes two Excel applications: option calculator and application generator. The option calculator includes pre-released software (used to improve the startup of the work page), and the application tool includes several Excel functions. Users can develop their own applications based on these functions, and the application tools include several sample programs. Students can use these programs to verify the nature of the options and can easily use these programs for numerical calculation. Teachers can also use these functions to design more interesting homework problems.
The latest version of DerivaGem software can be used to price credit derivatives. A version of the software is compatible with Mac's Open Office and Linux systems, and users can directly contact the programs with DerivaGem software functions. Growth Enterprise Market for Derivatives is easy to install, and the derivatives such as options and futures (8th edition) are accompanied by easy-to-understand explanations.
At the end of Options, Futures and Other Derivatives (8th Edition), there is a description of this software. Users can download the latest version of this software on my website.
examination question bank
The improved question bank includes multiple-choice questions and some exam questions that need simple calculation. Teachers can use this question bank to test students.
technical report
Some ideas in the book are illustrated by technical notes. Readers can download these technical reports on my website. In Options, Futures and Other Derivatives (8th Edition), the reason why I didn't include these technical reports is to better organize the materials and ensure that students can better understand the contents introduced.
Express gratitude/gratitude
In the process of writing Options, Futures and Other Derivatives (8th Edition), many people provided help. In fact, it takes too long to list all the people who have given advice. Here I want to emphasize that I have benefited from the advice of many colleagues who teach options, futures and other derivatives (the eighth edition of the original book) and the comments of financial practitioners; At the same time, I would like to thank the students in my class at the University of Toronto, who provided many very good suggestions for this book. Thanks to Eddie Mizzi, the geometry publishing house, for editing and binding Emilio Barone of Luiss Guido Carli University in Rome provided many detailed suggestions for options, futures and other derivatives (8th edition).
I want to thank Alan White in particular. Allen is my colleague at the University of Toronto. In the past 25 years, Allen and I have done a lot of cooperative research in the field of options and futures. During this period, we spent a lot of time discussing in some key areas. Allen and I * * * have many new ideas adopted in Options, Futures and Other Derivatives (8th Edition) and new ways to explain some old ideas. Allen is the main developer of DerivaGem software.
I especially want to thank the staff of Pearson Publishing House, especially Tessa O 'Brien, Donna Batista and Nancy Fenton. I want to thank them for their warm help, advice and encouragement. Readers are welcome to make suggestions on derivatives such as options and futures (8th edition). My e-mail address is.
john c.hull
Rotman School of Management, University of Toronto