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Enlarge cover. Error rating book. Refresh and try again. Open Preview See a Problem? Details if other :. Thanks for telling us about the problem. Return to Book Page. Destined to become a market classic, Dynamic Hedging is the only practical reference in exotic options hedgingand arbitrage for professional traders and money managers Watch the professionals.
From central banks to brokerages to multinationals, institutional investors are flocking to a new generation of exotic and complex options contracts and derivatives.
But the promise Destined to become a market classic, Dynamic Hedging is the only practical reference in exotic options hedgingand arbitrage for professional traders and money managers Watch the professionals.
But the promise of ever larger profits also creates the potential for catastrophic trading losses. Now more than ever, the key to trading derivatives lies in implementing preventive risk management techniques that plan for and avoid these appalling downturns. Unlike other books that offer risk management for corporate treasurers, Dynamic Hedging targets the real-world needs of professional traders and money managers.
Written by a leading options trader and derivatives risk advisor to global banks and exchanges, this book provides a practical, real-world methodology for monitoring and managing all the risks associated with portfolio management.
He has held a variety of senior derivative trading positions in New York and London and worked as an independent floor trader in Chicago. Get A Copy. Hardcover , pages. Published January 14th by Wiley first published December 31st More Details Original Title. Other Editions 3. Friend Reviews. To see what your friends thought of this book, please sign up. To ask other readers questions about Dynamic Hedging , please sign up.
Lists with This Book. Community Reviews. Showing Average rating 4. Rating details. More filters. Sort order. Sep 05, Austin rated it did not like it Shelves: non-fiction , finance. Do you remember reading The Divine Comedy and getting finally to the part where the two poets apparently on an extended smoke break from their barista jobs in Brooklyn get to the ninth circle of Hell only to think to yourself, "Brutus and Cassius?
I mean Judas I totally get, and these guys are distasteful and all, but the inner circle? We may forgive Signor Alighieri for his error, for he was Do you remember reading The Divine Comedy and getting finally to the part where the two poets apparently on an extended smoke break from their barista jobs in Brooklyn get to the ninth circle of Hell only to think to yourself, "Brutus and Cassius?
We may forgive Signor Alighieri for his error, for he was born years too early to recognize the ominously darkened visage of Nassim Nicholas Taleb next to the ludicrously grinning mug of Paul Wilmott as they bookend Judas Iscariot for all of eternity.
But I digress The thing is that this book is bad. Really bad, and in need of an editor. The redundant sentences bounce off of each other without forming a coherent picture of anything but Taleb's ego.
He says in the preface that he "clambered up to my attic where, during 6 entire months, I spent 14 hours a day, 7 days a week immersed in probability at a Ph. Then I began to write this book. Note that the " at a Ph. The good Dr. As they say in The Big Lebowski , I guess he's just "not into that whole brevity thing.
It didn't. There was an apparently straight-faced claim that we should care about the seventh derivatives of our options positions, which seems more than a bit ludicrous. All this was interspersed with asides in grey boxes that completely disrupted the flow of the text. Honestly, the best way to read the book is probably to read the grey boxes and nothing else. And then there was the relentless repitition of the refrain that quants don't know what they are talking about, experienced traders know these things in their sleep.
Taleb, despite his claims of hour marathon mathematical musings cannot seem to make up his mind if he is a mathematician, a trader, or both. The only thing that is clear is that he believes himself to be above all of them.
This book is not without a following, which to me is very odd. I suspect it originates from the lack of other books on the subject at the time of its publication. Taleb does manage to point out convincingly by beating you over the head with it for pages that nonlinear instruments carry with them risks that linear ones do not. Still, the amount of intuition garnered about how to deal with, or even think about such things contained in Dynamic Hedging is tiny compared with, for example, the books by Sheldon Natenberg or Lawrence G.
Lots of people write bad books, so what is it that qualifies Mess. Taleb and Wilmott to be satanic hors d'oeuvres until the end of days? The ninth circle of hell is about betrayal , and these gentlemen have repeatedly run roughshod over the very people who would be their biggest champions: quants. In their blindingly narcissitic quest to prove to the world that they are smarter than their peers, they have done more than any source since "Revenge of the Nerds" to perpetuate the myth that people schooled in the mathematical sciences can't tie their own shoes without an M.
They need you to believe that all quants follow models blindly and without question in order for you to be impressed by the fact that they themselves do not. The thing is, Nassim Taleb is a very smart guy the jury is totally out on Wilmott. Though this book is quite poorly written, I understand that his others which I've not read are better, and his public remarks seem to indicate that he has a much better than average grip on the statistical realities of the market.
His approaches seem sound. If he had just held the scimitar aloft and said, "let us slay the black swan," then I assume that lots of quants would have been there with him sparking up the torches and sharpening the pitchforks.
Instead, he chose to demonize his own kind in order to stand even farther apart. If this sounds familiar, it's because it is the plot of many a teen movie. The coolest of the unpopular kids, when given an opportunity to sit at the cool kids' table in the cafeteria read: interviewed by CNBC , inevitably turns his back on his true friends.
Et tu, Nassim? Wilmott plays his own insidious version of this game. In many ways, his is worse. Whereas Taleb wants to be recognized for his genius, Wilmott wants to be paid for it. This "there's something wrong with you that only I can fix" attitude reminds me of Scientology a bit. So what do we do with these two poster boys for Muchausen-Syndrome-by-Proxy? I say call it like you see it. Not every book that sells well is a great one. That liquid splashing your ear is not rain, my friend.
View all 3 comments. Dec 10, Carl Yang rated it it was amazing. Taleb is one arrogant dude who loves flooding his books with archaic words which were last employed in the English Language by Geoffrey Chauncer. But alas, Dynamic Hedging is a strong advanced text which goes through many nuanced topics.
For example, he makes some good points on managing option greeks. Some chapters I really enjoyed which are hugely important in practice that you don't learn in any classroom: soft American options, discrete delta vs continuous delta, fungibility.
Just a warning Taleb is one arrogant dude who loves flooding his books with archaic words which were last employed in the English Language by Geoffrey Chauncer. Just a warning that you might have to read over sections multiple times before you digest ideas. For example, for american options, you can tend to think of the early exercise having some sensitivity to interest rates as rates go higher, it becomes more optimal to exercise puts and less optimal to exercise calls , so in some circumstances, the early exercise provision of american option is actually an option on rates.
Just some great material which makes you think hard. The structure of the book jumps over the place, but mainly Taleb is focused on options, volatility, and exotics. So not exactly a good book on vanilla rates or commodities for example.
This text is certainly one I keep as a reference guide on my desk. As a sign of its value, everytime I read it, I do learn something new. I rated it highly based solely on the excellent and juicy material but the writing style is really horrible. Not for beginners but a great read for anyone interested in the deep details of trading derivatives. May 20, Andy rated it it was amazing Shelves: economics-and-finance , nonfiction.
This book will be of zero interest to anyone not involved in the securities trading industry and of small interest still to those not involved with derivatives.
Dynamic Hedging : Managing Vanilla and Exotic Options
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Dynamic Hedging : Managing Vanilla and Exotic Options (Wiley Finance) [Hardcover]
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Dynamic Hedging: Managing Vanilla and Exotic Options