Product Description

&>For undergraduate and graduate courses in derivatives, options and futures, financial engineering, financial mathematics, and risk management.

Designed to bridge the gap between theory and practice, this highly successful book is the top seller among both the academic audience and derivative practitioners around the world.

Product Details

• Amazon Sales Rank: #18194 in Books
• Published on: 2008-07-10
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 848 pages

Review
featured in 5 of the best - Quality World November 2006

From the Back Cover

One of the exciting developments in finance over the last 20 years has been the growth of derivatives markets. In many situations, both hedgers and speculators find it more attractive to trade a derivative on an asset than to trade the asset itself. Some derivatives are traded on exchanges. Others are traded by financial institutions, fund managers, and corporations in the over-the-counter market, or added to new issues of debt and equity securities. Much of this book is concerned with the valuation of derivatives. The aim is to present a unifying framework within all derivatives-not just options or futures-can be valued.

About the Author
John Hull lectures at the Joseph L. Rotman School of Management from the University of Toronto.

Customer Reviews

One for applied mathies (no lemmas here)
"Options, Futures and Other Derivatives", Hull and/or "Financial Calculus: An Introduction to Derivative Pricing", Baxter & Rennie.

Either of these books individually would represent a good grounding in the mathematics underlying derivative pricing. The two books are very different to each other, though, and it is worth the reader considering his preferred approach before parting with cash. The main differences between the books are:

1. Baxter & Rennie follow a "pure maths" approach, basing the theory around a succession of mathematical theorems. Hull describes this approach in a later chapter, but builds up the theory using an "applied maths" approach, deriving a partial differential equation satisfied by derivative prices.

2. Hull includes background information on the derivative markets; Baxter & Rennie do not.

3. Hull describes how derivatives can be priced in practice, using techniques like Monte Carlo and trees; Baxter & Rennie do not.

If I had to choose one book, my personal preference would be for Hull, but this probably reflects my choice of degree courses. But having read Baxter & Rennie after Hull, my opinion is that the books compliment each other well. When things get so complicated that the intuitive realism of applied maths needs to give way to abstract pure maths (for example in considering quantos or yield curve models), the Baxter & Rennie approach is easier to follow.

A Sound theoretical foundation to the topic
I bought this books mainly to complement my knowledge for a new job, but it was also something I had in my list of books to buy for a while.

John Hull's analysis is very complete and comprehensive. The book requires a foundation knowledge of high-school / engineering algebra and calculus (maybe statistics too).

Being a novice to derivatives trading, I am still wading my way though half-way of the book, with frequient revisit to the previous chapters.

I would highly recommend this to the reader who is serious into understanding the intricacies of derivatives, and who would be patient to go though all the undepinning mathematics.

I would have given this five (or more) stars, if John Hull had included a couple of chapters explaining the very basics for the beginner, and had SOME solutions to the end-of-chapter excercises, rather than having all in another book, "Solution manual to options,...".

Written with rare clarity.
This book ('Hull') is an excellent introduction and guide to derivatives. It's also a good reference - there's enough information so that you probably won't feel you need to buy another, deeper book.

The emphasis is on a description of the various products, as well as how to price them. The emphasis stays on the theory of pricing, rather than delving right down into computer algorithms, so if you need to write derivatives software, I recommend the excellent 'C++ Design Patterns and Derivatives Pricing' by Mark Joshi - but read this book first.

This should definitely be your first book on derivatives. Only after reading several other books on derivatives, after first reading 'Hull', did I realise how clear his book is, and how some other authors manage to make things so confusing.