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Most Helpful Customer Reviews
19 of 19 people found the following review helpful:
5.0 out of 5 stars
The gold standard (although you may not need to upgrade to the seventh edition),
By
This review is from: Options, Futures, and Other Derivatives with Derivagem CD (7th Edition) (Hardcover)
This is the definitive introduction to derivatives. As evidence of its relevance, the following chapters are assigned to Financial Risk Manager (FRM) candidates: Hedging Strategies using Futures (Chapter 3), Determination of Forward and Futures Prices (5), Interest Rate Futures (6), Swaps (7), Properties of Stock Options (9), Trading Strategies Involving Options (10), Binomial Trees (11), Black-Scholes-Merton Model (13), Greeks (15), Volatility Smiles (16), Exotic Options (22).
Given that this is an expensive text, the most frequent question I get is, do I need to buy the latest edition? Perhaps you do not: the updates from fifth to sixth edition, and from sixth to seventh edition, have both been modest "version" upgrades. Here is a rule-of-thumb: the more introductory the topic (i.e., the earlier the chapter), the less likely you want/need the upgrade. The early chapters on futures, hedging, interest rate futures, swaps, and option pricing have barely changed since the fifth edition. Further, from what i can tell, the end-of-chapter questions are largely the same/similar. In regard to the seventh, in addition to a number of refinements (e.g., some reorganization), the two noticeable differences are: a new chapter on valuation of employee stock option (a particular expertise of Hull's) and more material on certain credit derivatives (CDOs, credit default swap) including a bit more help on Gaussian copula. However, in regard to credit derivatives, in total, Hull gives a quick tour which may be challenging to the new learner. It is maybe not the best place to start for credit derivatives per se. But, this is the gold standard, a work of art, as far as finance texts go. It may be an introduction but it offers encyclopedic breadth. I've read it several times over, worked most of the problems, taught from it, argued with it, and yet I keep needing to refer to it--Hull is the trusted adviser you call in a crunch, because you know he knows--full mastery is probably still years away.
4 of 4 people found the following review helpful:
5.0 out of 5 stars
classical book,
By
Amazon Verified Purchase(What's this?)
This review is from: Options, Futures, and Other Derivatives with Derivagem CD (7th Edition) (Hardcover)
I was planning to buy this book for a few years.
This is a classical book on Derivatives. A must have for anyone that is interested in learning how derivatives work and how to price them. It provides good reasoning and intuitive ideas on risk-neutral pricing. I tried learning that from other books before but the main ideas are so well explained here that now I can understand what those other books say (concepts like market price of risk and the equivalent martingale result for change of numeraire). Interest rate derivatives are well introduced here and the new chapter on more numerical procedures extends the results from previous chapters to dynamics with stochastic volatility and so on. So, this is a must have and basic reading book for any quant analyst.
5.0 out of 5 stars
Excellent gateway text,
By
This review is from: Options, Futures, and Other Derivatives with Derivagem CD (7th Edition) (Hardcover)
Hull provides an excellent introduction to the world of financial engineering. I find myself referring to his text after years in industry. He glosses over more advanced topics such as variance reduction techniques, random number generation, and martingales, however he provides excellent references to these topics. I actually wish he wrote texts on credit and interest rate derivatives as, unlike many in the industry, John Hull can write elegantly and succinctly. He takes care to build up the topics in an intuitive way. His treatise of the Black Scholes model is a little light on details, however, Wilmott and Shreve pick up the slack in their texts.
I woul say this is a MUST buy for anyone who wants to work in finance.
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