Derivatives: A Manager's Guide to the World's Most Powerful Financial Instruments [Hardcover]

Philip McBride Johnson (Author)

Book Description

Publication Date: April 1, 1999 | ISBN-10: 007134506X | ISBN-13: 978-0071345064 | Edition: 1

As a corporate manager or executive, you probably have little contact with the actual day-to-day trading of derivatives contracts. Regardless, your oversight responsibilities place your career directly in the hands of aggressive derivatives traders. Do you really know what they're up to? DERIVATIVES is the first and only book written for the manager who is not a derivatives expert but is responsible for the experts. Concise, uncomplicated, and often entertaining, it gives you a basic understanding and appreciation for these complex yet powerful financial tools. DERIVATIVES isn't another "how to trade" book. Instead, it eschews technical jargon and mathematical formulae to show you "how to survive" when derivatives inevitably cross your professional path. Real life examples of derivatives disasters (Proctor & Gamble's 1994 loss of $102 million, Barings Bank's 1995 loss of $1.3 billion, and the Belgian government's 1997 loss of $1.2 billion) are accompanied by analyses of where they went wrong. Far from the daredevil, all-or-nothing reputation they are often given, derivatives are basically conservative hedging instruments designed to REDUCE risk. They allow organizations to pass the assumption of natural risks to speculators (who intend to profit from those risks). From simple agricultural futures to the latest versions of credit derivatives and swaps, DERIVATIVES will give you a basic appreciation of how derivatives operate and where the dangers lie. Look to this comprehensive yet easy-to-read overview for valuable information on: How to instinctively recognize different types of risk, and choose the instruments which best counteract each; Examination of the legal environment for derivatives, and how to protect your firm from potential liabilities; Strategies to structure your firm's checks and balances to keep pace with the changing structure of the derivatives business. While it may be the quants and traders who make the costly errors, it is the managers and executives who ultimately answer to the authoritiesÑnot to mention their stockholders. DERIVATIVES will help you safeguard your company from undue risk, provide you with a new level of comfort and understanding regarding these vibrant and valuable risk protection tools, and help ensure that your companyÑand careerÑwon't be the next cautionary tale splashed across financial pages worldwide. Derivatives can be both beneficial and devastating. DonÕt let yourself get burned! Derivatives will give you a step-by-step tour through the amazing benefits of derivativesÑas well as an overview of their hazardsÑand put you firmly in control of your corporation's risk control program.

Editorial Reviews

From the Back Cover

The Corporate Executive's Guide to Understanding Derivatives. How to Keep Your Company Out of TomorrowÕs Headlines! As a corporate manager or executive, you probably have little contact with the actual day-to-day trading of derivatives contracts. Regardless, your oversight responsibilities place your career directly in the hands of aggressive derivatives traders. Do you really know what they're up to? Derivatives is the first and only book written for youÑthe manager who is not a derivatives expert but is responsible for the experts. Concise, uncomplicated, and often entertaining, it gives you a basic understanding and appreciation for these complex yet powerful financial tools. Designed to offer real advice to real managers, with a minimum of academic jargon and theoretical sleight of hand, Derivatives provides: Descriptions and uses of major derivative classesÑfutures, options, swaps, and hybrids; Examinations of billion-dollar debaclesÑand simple steps managers could have taken to avoid them; Guidelines on how to structure your organization's oversight of derivative activities. Derivatives can be both beneficial and devastating. DonÕt let yourself get burned! Derivatives will give you a step-by-step tour through the amazing benefits of derivativesÑas well as an overview of their hazardsÑand put you firmly in control of your corporation's risk control program.

About the Author

Philip McBride Johnson (Washington, D.C.) is a partner at the law firm of Skadden, Arps, Slate, Meagher, and Flom. An accomplished author, he was chairman of the CFTC and played a key role in drafting federal derivatives legislation.

Product Details

• Hardcover: 210 pages
• Publisher: McGraw-Hill; 1 edition (April 1, 1999)
• Language: English
• ISBN-10: 007134506X
• ISBN-13: 978-0071345064
• Product Dimensions: 9.4 x 6.3 x 0.9 inches
• Shipping Weight: 1.2 pounds
• Average Customer Review: 5.0 out of 5 stars  See all reviews (1 customer review)
• Amazon Best Sellers Rank: #2,800,584 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

5 of 6 people found the following review helpful:

5.0 out of 5 stars Excellent book! Very lucid, and very comprehensive!, July 23, 2001

By 

Shashank Tripathi (Gadabout) - See all my reviews
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This review is from: Derivatives: A Manager's Guide to the World's Most Powerful Financial Instruments (Hardcover)

This is a superb book, get it if you are interested in the world of derivatives. As the title suggests, however, this is a *managerial* intro to the world of the world's "most powerful financial intruments" and will be excellent introduction for MBA students. COntains some excellent examples from this world as well (great to know this if you are going to interview).

If you want something a lot more numerical and yet friendly, I'd suggest "The Complete Guide to Option Pricing Formulas by Espen Gaarder Haug" to go alongside this book - thats a classic as well. If you want to see the Black-Scholes model in operation, check out http://erudition.com/derivatives/. Good luck.