Fundamentals of Futures and Options Markets

Description
For undergraduate courses in derivatives, options and futures, financial engineering, financial mathematics, and risk management.

A reader-friendly book with an abundance of numerical and real-life examples.

Based on Hull's Options, Futures and Other Derivatives, Fundamentals of Futures and Options Markets presents an accessible and student-friendly overview of the topic without the use of calculus. Packed with numerical examples and accounts of real-life situations, this text effectively guides students through the material while helping them prepare for the working world.

 

Features
Present the basics: Material that’s accessible for beginners. Fundamentals of Futures and Options Markets covers the core material addressed in Hull’s Options, Futures and Other Derivatives but does so in a way that’s easier for undergraduate students to understand. So whether it’s your first day of college or you’re a tenured professor, this book is on your level.

Offer the latest software: DerivaGem version 2.01 is included with this book. Version 2.01 of DerivaGem allows credit derivatives to be valued, is compatible with Macs and Windows, and consists of two Excel applications:
The Options Calculator consists of easy-to-use software for valuing a wide range of options.
The Applications Builder consists of a number of Excel functions from which users can build their own applications. It includes a number of sample applications, enables students to explore the properties of options and numerical procedures more easily, and allows for additional assignments to be designed.
Encourage self-assessment and practice:
End-of-chapter quizzes and problems. Students will be able to assess their knowledge with the seven quiz questions found at the end of each chapter (excluding the final chapter). This text also contains about 300 Practice Questions and over 100 Further Questions. NEW! Many new end-of-chapter problems have been added to this edition.
Solutions Manual and Study Guide: Answers to Practice Questions and advice to readers on how each chapter should be studied are in the Solutions Manual and Study Guide (ISBN 013299514X) which is published by Pearson and can be purchased separately from this book. NOTE: If you'd like to order the Book/Solutions Manual and Study Guide order the ISBN below:
0133418804 / 9780133418804 Fundamentals of Futures and Options Markets & Student's Solutions Manual and Study Guide Package consists of:
0132993341 / 9780132993340 Fundamentals of Futures and Options Markets
013299514X / 9780132995146 Student's Solutions Manual and Study Guide for Fundamentals of Futures and Options Markets
Keep it current: Many changes have been made to update material and improve the presentation
The changes taking place in the way over-the-counter derivatives are traded are explained.
The chapter on swaps (chapter 7) reflects the trend in the market toward OIS discounting. It explains how swaps can be valued using both LIBOR and OIS discounting.
New non-technical explanations of the Black-Scholes-Merton formula are provided in chapter 13 and an appendix to chapter 12 outlines how the formula can be derived from binomial trees.
New material has been added on principal protected notes (chapter 11) reflecting their importance in the market.
Products such as DOOM options and CEBOs offered by the CME Group are covered (chapter 9).
The material on exotic options (chapter 22) has been expanded to include a discussion of cliquet and Parisian options.
The material on credit derivatives (chapter 23) has been updated and expanded.
Value at risk is explained with an example using real data (chapter 20). The example and accompanying spread sheets have been improved for this edition. This makes the presentation more interesting and gives instructors the opportunity to use richer assignment questions.
Tailor your course:
PowerPoint presentations: Several hundred PowerPoint slides have been posted to John C. Hull’s website, http://www.pearsonhighered.com/hull/. These PowerPoint slides are a valuable resource that can be adapted for your personal class needs.
Instructors Manual: The Instructors Manual is made available online to adopting instructors by Pearson. It contains solutions to “Further Questions,” notes on the teaching of each chapter, and notes on course organization.
Test Bank: The Test Bank has been greatly improved for this edition and is also available online to adopting instructors from Pearson.

Updates include:
The changes taking place in the way over-the-counter derivatives are traded are explained.
The chapter on swaps (chapter 7) reflects the trend in the market toward OIS discounting. It explains how swaps can be valued using both LIBOR and OIS discounting.
New non-technical explanations of the Black-Scholes-Merton formula are provided in chapter 13 and an appendix to chapter 12 outlines how the formula can be derived from binomial trees.
New material has been added on principal protected notes (chapter 11) reflecting their importance in the market.
Products such as DOOM options and CEBOs offered by the CME Group are covered (chapter 9).
The material on exotic options (chapter 22) has been expanded to include a discussion of cliquet and Parisian options.
The material on credit derivatives (chapter 23) has been updated and expanded.
Value at risk is explained with an example using real data (chapter 20). The example and accompanying spread sheets have been improved for this edition. This makes the presentation more interesting and gives instructors the opportunity to use richer assignment questions.
Many new end-of-chapter problems have been added.
The Test Bank available to adopting instructors has been improved and expanded.

Table of Contents
1. Introduction
2. Mechanics of futures markets
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
17. The Greek letters
18. Binomial trees in practice
19. Volatility smiles
20. Value at risk
21. Interest rate options
22. Exotic options and other nonstandard products
23. Credit derivatives
Answers to Quiz Questions
Glossary of terms
DerivaGem software
Major exchanges trading futures and options
Tables for N(x)
Index