Guide to Derivatives: What They are, How They Work, Their Uses, Their Risks

Guide to Derivatives: What They are, How They Work, Their Uses, Their Risks


By (author) Pablo Triana

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  • Publisher: Economist Books
  • Format: Hardback | 288 pages
  • Publication date: 18 January 2008
  • Publication City/Country: London
  • ISBN 10: 1861978472
  • ISBN 13: 9781861978479

Product description

Since the early 1970s the derivatives market has grown to become the world's largest financial market. Between 1999 and 2004 the value of contracts traded on options exchanges worldwide soared from $62 trillion to $312 trillion. Options, swaps and futures are now used every day by companies, investors, speculators, pension funds, financial institutions and governments with the purposes of hedging risks, generating attractive returns and for asset-liability management.Derivatives, which have been described by Warren Buffett as "weapons of financial mass destruction", are sophisticated products, sometimes extremely sophisticated, and lack of understanding of them among buyers (and many sellers) is a large part of the reason behind the well publicised big losses made by firms such as Procter & Gamble on derivatives. Most derivatives books published take a specialist, mathematical approach. This book is different in that it will explain derivatives to the non-specialist - what they are, how they work, their uses and their risks. It explains basic principles and particular products in plain English and it is supported by an easy reference glossary of terms together with appendices that reveal the sheer scale of trading in different types of derivatives.

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Author information

Pablo Triana has worked in derivatives trading in New York, London and Madrid. He is now a Professor at Instituto de Empresa business school in Madrid where he teaches courses on financial engineering. He is also a regular contributor to newspapers such as the Financial Times.