Product Description

Destined to become a market classic, Dynamic Hedging is the only practical reference in exotic options hedgingand arbitrage for professional traders and money managers

Watch the professionals. From central banks to brokerages to multinationals, institutional investors are flocking to a new generation of exotic and complex options contracts and derivatives. But the promise of ever larger profits also creates the potential for catastrophic trading losses. Now more than ever, the key to trading derivatives lies in implementing preventive risk management techniques that plan for and avoid these appalling downturns. Unlike other books that offer risk management for corporate treasurers, Dynamic Hedging targets the real–world needs of professional traders and money managers. Written by a leading options trader and derivatives risk advisor to global banks and exchanges, this book provides a practical, real–world methodology for monitoring and managing all the risks associated with portfolio management.

Nassim Nicholas Taleb is the founder of Empirica Capital LLC, a hedge fund operator, and a fellow at the Courant Institute of Mathematical Sciences of New York University. He has held a variety of senior derivative trading positions in New York and London and worked as an independent floor trader in Chicago. Dr. Taleb was inducted in February 2001 in the Derivatives Strategy Hall of Fame. He received an MBA from the Wharton School and a Ph.D. from University Paris–Dauphine.

Product Details

• Amazon Sales Rank: #10892 in Books
• Published on: 1997-01-23
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 528 pages

Bruno Dupire, Head of Swaps and Options Research Paribas Capital Markets
"If pricing is a science and hedging is an art, Taleb is a virtuoso."

Stan Jonas, Managing Director FIMAT-Societe Generale
"This is not merely the best book on how options trade, it is the only book."

William Margrabe, President The William Margrabe Group, Inc
"Dynamic Hedging bridges the gap between what the best traders know and what the best scholars can prove."

Customer Reviews

A book long overdue
It is nearly impossible to write a book that is both mathematically rigorous and sufficiently down to earth to be accessible to the professional trader. This book is a step in the right direction. It maintains the mathematical accuracy and depth without bogging the reader down with technical derivation of formulae. At the same time, it is written by a trader whose experience in the real market compels him to constantly question the 'nice' assumptions used to derive these formulae.

Taleb is first a market practitioner who uses models and pricing formulae to enhance trading and not the other way around. If there is a discrepancy between theory and reality he doesn't blame the markets.

The book is very personal and leaves no doubt what the author's opinion is on VAR, continuous hedging and other sacred cows of modern finance. The debacle in the financial markets in 1998 and the apologetic excuses by famous traders and theoreticians indicates that there is more than a grain of truth in Taleb's skepticism.

The importance of this book is that whether one agrees or disagrees with Taleb, it forces the reader to question his basic assumptions and rethink common truths. The book is unique: it is stylish, philosophical, literary, and if one may say so of a hardcore financial book - it is very entertaining.

If there is a better options trading book i'd love to see it
This is without a doubt the best book that has ever been written on professional options trading and I simply cant understand why anyone would give a less than glowing review. If there is anything better out there (and i dont mean a pricing book that leaves the reader to infer his own trading realities from the models and hedge ratios that ensue) then I'd love to see it.

Of course this isnt a mathematically rigourous platform to learn the pricing and hedging of option products, Taleb is entirely clear that it wasnt meant to be. Instead it offers one source for a multitude of much, much more intuitive lessons on trading, probability, and market realties offered in a persistently thought provoking, even entertaining style.

As a junior trader I found this a real bonus step up the learning curve (im sure you could realise all of this knowledge elsewhere, but in one place? - never.) I eagerly await seeing any additional material included in the second edition.

Invaluable book that bridges gap between theory and practice
Taleb's book successfully bridges the gap between well-posited but academic accounts of options theory and the practical knowledge and vernacular that are privy to the best traders. It is thoughtful and interesting, scholarly yet intuitive - and written in such picturesque prose that will at once charm and provoke you! The author makes the point well that market reality at times can be grim and much less forgiving - and certainly much richer - than current theoretical modeling make it out to be and shows how the trader can stack the odds in his or her favor. This book is an invaluable source of ideas for anyone who wants to monetize their empirical research on markets.