ESSAYS IN DERIVATIVES SECOND EDITION Derivatives can be a painfully difficult subject to master, usually requiring a steep learning curve. As Don Chance points out, "many legal pads are used up, sometimes frustratingly, in working through some of the principles covered in technical derivatives books." This book is different. In the updated second edition of Chance's well-received Essays in Derivatives, the author once again keeps derivatives simple enough for the beginner, but offers enough in-depth information to satisfy the more experienced investor. This book provides up-to-date and detailed coverage of various financial products related to derivatives in several key areas: derivatives and their markets, the basic instruments, derivative pricing, derivative strategies, exotic instruments, and fixed income securities and derivatives. Chance begins with the basics, defining what a derivative is, outlining four common types--forward contracts, futures contracts, options, and swaps--and explaining the kinds of situations in which one type might be used and preferred over another. From there, he gradually moves on to more complex topics--all presented in the same accessible, down-to-earth style and nontechnical language. Since the first edition of this book was published in 1998, the derivatives business has become vastly more sophisticated. Recognizing this, the author has eliminated outdated material and, in addition to revising almost every chapter in the book, has added many completely new chapters, covering subjects that include why derivatives are used, forward and futures pricing, operational risk, volatility derivatives, weather derivatives, good and bad practices, and other new topics. In addition, the end of each chapter includes practice questions that allow you to test how much of the material has been retained. Answers are provided at the end of the book. The material in Essays in Derivatives will appeal to individuals at all levels of expertise. Beginners will find these essays particularly useful in gaining a fundamental grasp of the subject, and experts will appreciate the simple manner in which such seemingly complicated subjects can be presented. Both will agree: a basic understanding of derivatives need not be hard . . . and can even be enjoyable.
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