Talking about derivatives, these are nothing but basically financial instruments. The values of these instruments rely on assets like stocks, bonds and other types of traditional securities. You will find several forms of derivatives instruments that people use for trading and hedging.
For most people, trading is a daunting and scary area to start with. They fear taking risks and but; this is the reason there are several books in the market for derivatives. They provide information on trading and help people to learn more about this sector. Given below is a list of derivative books which will help you in understanding the principles of derivatives.
1. Introduction to Futures and Options Markets
This book by John Hull is by far the best book for derivatives. It will introduce the basic principles of derivatives which will help you in understanding derivative in the most effective manner. It has detailed information on mathematical concepts which you can use for evaluating and analyzing derivatives.
This book is a better choice for people who have prior knowledge of mathematical concepts. A few essential topics covered in this book are- presentation of swaps, value-at-risk, scenario analysis, and other such things. If you are new to the derivative market, then this book can serve as an introductory guide for you.
2. Derivatives- The wild beast of Finance
This book was written by Alfred Steinherr and was published in the year 1998. It is considered as one of the boldest books of that time which made correct predictions about the future of global finance.
It provides an excellent overview of the kinds of risk a person has to face in banking. When it was first published, it made predictions about the consequences of the then global financial market. The recent edition of the book has brought in changes which makes it user-friendly by enhancing the readability of the previous version.
3. Merton Miller on Derivatives
This book by Merton Miller is one of the best when it comes to addressing critical issues based on derivatives. Derivatives have always been looked with skepticism in the industry but, Miler has done a fantastic job of clarifying derivatives. You get to know the unique and rare side of the world of derivatives. It also gives an insight into how things have changed in the industry.
4. Financial Derivatives by Robert Kolb and James Overdahl
This book will help in disclosing different aspects of derivatives and their potential in the market. If you are interested in learning more about derivatives, but you are getting bogged down by everything then consider this book. It has thorough and detailed information about derivatives and explains the ways in which you can use them in real life.
The book will introduce you to the broad spectrum of types under derivatives- from futures, swaps, options to structured products. It will also give you a detailed introduction on derivatives and its importance for managing risks.
5. Options, Futures, and Other Derivatives
Written by John Hull, this one is another of his masterpieces. He has done an excellent job in updating and revising the previous version. What can you find in this book? You can find information on real-world situations and issues.
It comes with a manual guide which will provide you with answers to the question and problem sections. The starting chapters have successfully met the needs of students and instructors.
These were the five best books for derivatives which will provide you with real-life situations and their solution. If you are thinking to buy one, then choose the one that best fits your requirement.
