Summary |
The primary focus of the book is pedagogical, to provide instruction on the important but often overlooked connection between risk management and speculation. A central theme is to demonstrate that effective risk management requires an in-depth understanding of speculative strategies.
This book aims to provide a unified treatment of important concepts and techniques useful in applying derivative securities in both risk management and speculative trading. Some of the techniques examined are well knows, such as the Black-Scholes option pricing methodology. However, the extensions to specific situations such as speculative trading strategies, are not. Other techniques examined in the book are either ignored or given too brief a treatment in conventional texts. This book is not intended to provide a comprehensive introduction to derivative securities. There are many excellent sources that contain the relevant background material. This book aims to proceed beyond an introductory treatment of derivative securities in order to have additional space and time to deal with more advanced topics. By design, this involves approaching the subject matter from a somewhat different perspective.
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