What specific job would this book relate to?

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Theo

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Hey guys,

I plan to buy a few finance books to read within the next few months from my school bookstore (Or Amazon if I can get them cheaper there).

Anyways, a book such as:

Options, Futures, and other Derivatives (John C. Hull)

What types of specific finance careers/jobs would this book link to? Hopefully I phrased that correctly.

Thanks for the help
 
ooooh i remember HULL.
i would assume if you get that book you'll be looking to become a derivatives or commodites trader. maybe even a structurer but i'm not too sure actually...
 
My first thought was derivatives trader too, but you really can't get this position without the requisite educational background. A lot of those people have degrees from very good schools and/or majored in CS, math, stats, engineering, etc. A book won't teach you all you need to know (though this is only speculation since I haven't actually read that book).
 
It's a great book. You should read it. It will prepare you for nothing by itself but it may lead you to all kinds of wonderful things. This was one of the first books in finance I read.
 
If you are okay with nearly new or used books, check out half.com. It's affiliated with eBay and much cheaper than Amazon, generally. They even have new books offered at times.
 
To what extent do you think derivatives knowledge is useful in finance generally (now & in the future)?

Let's say for someone who isn't involved in derivatives trading, but who is involved in other parts of finance (e.g. IB, PE, etc...). Can it give one/ a firm an edge?
 
I am reading Hull's book & he explains BSM, Ito's Limma etc. without making rocket science out of it. Here is fun look at quants: http://www.kquant.com/language.html

relinquo: please visit www.vault.com & look at the section on finance.

cfa2grunt: I got the international edition from India. It retails for $8-$9 there, but they charged me $30 (I think I went through amazon.com?), which is still cheaper than $100 you would pay in US. So, if you have any Indian friends, ask them.
 
abacus, I've seen that site. I also work for an IB.

The point of my question was to acertain whether this knowledge would be useful to people outside of derivatives or fixed income trading, i.e. can other teams use it? What are the prospects for the furture.
 
relinquo: I don't work for an IBank, so I will imagine that you are better qualified to answer that question. If the primary purpose of derivatives is to hedge risk, then they may find a use elsewhere too. For example, employing swaps to hedge your interest rate risk.
 
I was wondering whether or not one would be able to make a deal/investment "sexier" with derivatives (e.g. assume more risk/ trasfer it, etc...).
 
I guess thats the whole idea of a large category of derivatives investments
 
relinquo Wrote:
-------------------------------------------------------
> To what extent do you think derivatives knowledge
> is useful in finance generally (now & in the
> future)?
>
> Let's say for someone who isn't involved in
> derivatives trading, but who is involved in other
> parts of finance (e.g. IB, PE, etc...). Can it
> give one/ a firm an edge?

Let's see -

GDP of the US in 2005 = $12 Trillion
Notional Size of Outstanding Derivative Contracts = $90 Trillion

I would say you could just ignore it.
 
LOL JdV

did u see that i was back there thanks to Lady grail
 
Joey,

I'm not talking about hedge funds or general risk management at a bank. If you could elaborate with specifics or an example it could be useful.

For example, how would a PE fund use derivatives to enhance returns? Could they use credit default swaps and that kind of stuff to come up with a structure with more leverage/enhance their returns?

I know that this sounds very wishy washy, but I'd like some input on how a team/firm could use derivatives to enhance their strategies.
 
don't buy anything from a student bookstore unless you have a scholarship/unused refund credit that can only be used there.
 
Ways a PE Funds might use derivatives -

The PE fund might:
1) take a stake in a company by buying warrants, convertible debt or convertible preferred stock.
2) might borrow money at floating rights and use IR caps to protect against rising rates.
3) might need to value derivatives held by the target firm
4) might take a stake in a foreign company and remove currency risk from its stake by using fx swaps, forwards, options, or futures.
5) protect itself against equity revaluation by buying S&P options
6) sell deep-in-the-money call options to monetize it's PIPE (well that's illegal)
7) use credit default swaps to create some cap structure arb

and probably millions of other things...
 
Damn..For some reason I forgot all about this thread.

Thanks for all the replies. I received the book today- Which turned out to be an Indian edition. Hope the content is not different from a standard one (Does anyone know the answer to that)?

Anyways, some of the areas of the book may be too deep for me at this point, but I still think I should learn a lot. Its not for a class or anything, so I will just go at my own pace the new few weeks.



Edited 1 time(s). Last edit at Tuesday, October 3, 2006 at 01:32PM by Theo.
 
The Indian edition probably isn't any different to the US edition. I have a few foreign/international edition textbooks and the content is exactly the same.

It's a good book, enjoy!
 
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