1. Introduction
2. Futures Markets and Central Counterparties
3. Hedging Strategies Using Futures
4. Interest Rates
5. Determination of Forward and Futures Prices
6. Interest Rate Futures
7. Swaps
8. Securitization and the Credit Crisis of 2007
9. Mechanics of Options Markets
10. Properties of Stock Options
11. Trading Strategies Involving Options
12. Introduction to Binomial Trees
13. Valuing Stock Options: The Black–Scholes–Merton Model
14. Employee Stock Options
15. Options on Stock Indices and Currencies
16. Futures Options and Black's Model
17. The Greek Letters
18. Binomial Trees in Practice
19. Volatility Smiles
20. Value at Risk and Expected Shortfall
21. Interest Rate Options
22. Exotic Options and Other Nonstandard Products
23. Credit Derivatives
24. Weather, Energy, and Insurance Derivatives
25. Derivatives Mishaps and What We Can Learn from Them

• The text covers the core material in Hull's Options, Futures, and Other Derivatives in a way that's easier for a larger audience of undergraduate students to understand.
• Streamlined material based on recent trends in the derivatives market makes the text both more appealing and logical.
• • The derivatives market's move towards IOS discounting has continued since the last edition, and changes have been made to the first seven chapters to reflect this trend.
  • LIBOR discounting is no longer presented as a way to value instruments such as swaps and forward rate agreements. Instead, the valuation of these instruments requires a) forward rates for the rate used to calculate payments (usually LIBOR), and b) the zero-coupon, risk-free zero curve used for discounting (usually the OIS zero curve).
• New regulations concerning the clearing and trading of OTC derivatives has been expanded on throughout the text.
• Chapter 7 on swaps has been majorly reworked to improve material presentation and reflect the derivatives market's move to OIS discounting.
• Discussion of the impact of daily settlement when futures contracts are used for hedging has been expanded.
• Details on the calculation and use of Greek letters are included.
• Discussion of the expected shortfall measure reflects its increasing importance in the field.
• End of Chapter Problems include seven quiz questions, which students can use to test their understanding of key concepts. Students can check their answers at the end of the book.
• Practice Questions appear throughout the text to enhance student retention.

Information Throughout Has Been Brought Up-to-date

• NEW! New regulations concerning the clearing and trading of OTC derivatives has been expanded on throughout the text.
• REVISED! Chapter 7 on swaps has been majorly reworked to improve material presentation and reflect the derivatives market’s move to OIS discounting.
• UPDATED! Discussion of the impact of daily settlement when futures contracts are used for hedging has been expanded.
• UPDATED! Details on the calculation and use of Greek letters are included.
• UPDATED! Discussion of the expected shortfall measure reflects its increasing importance in the field.

• End of Chapter Problems include seven quiz questions, which students can use to test their understanding of key concepts. Students can check their answers at the end of the book.
• Practice Questions appear throughout the text to enhance student retention.

• NEW! DerivaGem Fundamentals 4.0 includes two excel applications, the Options Calculator and Applications Builder. The first consists of easy-to-use software for valuing many of the derivatives discussed in this book, and the second includes a number of excel functions from which users can build their own applications.