Introduction to Derivatives Options, Futures, and Swaps

Since the 1970s, the U.S. economy has experienced relatively sharp swings in stock prices, interest rates, and exchange rates, which has increased the exposure of many debt, equity, and currency positions to market risk. Faced with this risk, many institutional investors have increased theiruse of futures, option contracts, and other derivative securities. Understanding this dynamic investment environment requires that one grasp the markets and uses for this increasing number of derivatives. The purpose of this book is to provide finance students and professionals with an exposition ofderivatives that will take them from the basic concepts, strategies, and fundamentals to a more detailed understanding of the advanced strategies and pricing models. This synthesis of fundamental and advanced topics should provide students of finance with better methods of understanding thecomplexities involved in the evaluation and selection of derivatives and derivative positions with detailed structures. Derivatives should appeal to MBA, MS, and advanced undergraduate finance students, and professionals in equity and debt management.

R. Stafford Johnson is Professor of Finance in the William College of Business at Xavier University.