As an accountant I have the opportunity to eat lunch with the "finance" guys. One man mentioned a movie, "The Smartest Guys in the Room" about the ENRON scandal. The conversation quickly got technical about "derivatives" something I vaguely remember from a Finance class. I quite honestly feel people assume I know far more about this stuff than I really do. There seemed to be a lot of confusion about the role of "Mark to Market" accounting and its role in the Enron debacle. My opinion was asked about FAS 133 and derivatives. Since I felt I was out of my element, I quickly changed the subject. After lunch I asked my friend to recommend a book on "Derivatives". He gave me Ms. Taylor's book which quite honestly has been the best book in the area of Finance I have read since college. The reasons are many but here are a few. At the very outset she quite politely described my predicament without any condescension. She includes a Chapter designed for those who "maybe, just maybe feel that somewhere somehow you missed something along the line". In this chapter I finally got a crystal clear understanding of the difference between LIBOR/ LIBID and the TVM connection to the Mark to Market process. It's not that I didn't know how to use EXCEL to plug in the right numbers but somehow I felt unclear about the underlying connections. Ms. Taylor's book got rid of my vague feeling of confusion without losing any precision. There is a real cut-to-the-chase feel about this stuff which is still more warmly inviting than most financial texts. Her definition of a Forward Rate Agreement as a "user-friendly packaging" of an over-the-counter financial future made perfect sense to me. There is plenty of material in my area about the new accounting standards for derivatives. What is great about Ms. Taylor's approach is that she incorporates information referencing US and International standards. Needless to say I learned more than I expected from those chapters. Last of all I need to thank her because the whole layout of the book seemed to recognize that a reader like me is not going to take away every detail. Her use of Headings and bold case reminders was far more polite than the "Dummies" books so popular today but recognizes that abstract material must get packaged for easy digestion. I remember how in a philosophy class one British writer, Bertrand Russell, seemed hell bent on turning on the lights making the toughest stuff clear. Ms. Taylor must be the Bertrand Russell of Derivatives.
An excellent introduction to options and the over-the- counter foreign exchange markets.Lays out in simple plain English trading strategies and goes about removing some of the mystery that surrounds this subject
The new edition enables readers to understand the rapidly moving world of OTC derivatives - in effect the way the financial industry has translated fundamental financial risks (such as interest rates, foreign exchange rates, credit risk) into contracts which can be priced and managed to provide solutions to an every expanding audience of users, including pension funds, investment managers and all major corporations in the world.
The book is readable by anyone from beginner onwards and includes an updated section on credit derivatives, the most dynamic sector of the OTC market at this time. This edition is expanded to include contributions from industry experts on specialist topics to widen the coverage of the book.
I have to recommend that any person who needs to know more about the OTC derivatives market buy the book. A training course (such as those provided by Francesca the author) provides more intensive coverage, but the book is a simple and (relatively) cheap way to orient yourself.
I have a number of books on financial markets and OTC derivatives which are only readable by people with significant maths ability, this one explains the basic maths but shouldn't be beyond most readers.
I should also be honest and point out I wrote chapter 17 of the book. ;-)