August 2nd, 2010 
kk 
Product Description
New ways to profit in the post-credit-crisis market!
Trading complex formulas and intricate theories for clear descriptions and real-world examples, the second edition of All About Derivatives introduces you to the vast array of derivatives in today’s market. It covers all aspects of derivative contracts, explains techniques for pricing and trading them, and shows how to use each to hedge risk or increase profits. You’ll learn everything there is to know about:
- Contracts, including forwards, futures, swaps, options, and credit derivatives
- Key terms, such as volatility, arbitrage, and the Greeks
- Key mechanics, like storage, settlement, valuation, and payoff
- Pricing methods and mathematics for determining fair value
- Hedging strategies for different types of risk
Plus, you get brand-new chapters on high-frequency trading and the role derivatives played in the 2008 credit crisis
All About Derivatives Second Edition
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I have been trading my own account for a while and got interested in trying to make a few options trades. I went looking for a book so that I could review the basics. I found one book which basically said, “Here is how these terms are defined, and here are some formulas which employ these terms and here are some examples.” Well, that left me cold, because the author of that book made no attempt to make sure that I really understood the basic concepts. I “kind of” understood, but not really.
“All About Derivatives” by Michael Durbin is totally different. You can tell from the way he goes about explaining things that he really wants you to understand the basic concepts, and he doesn’t want you to feel “dumb” just because he brings it down to a pretty basic level from time to time. What he’s trying to do is make sure you don’t get tripped up on important concepts at the early stages and he really does bend over backwards to clarify things to a very great degree. Whereas it was pointless to try to work my way through the first book, I read “All About Derivatives” pretty much from cover to cover and I think there were only a few places where I still got stuck. Still, that’s a vast improvement over the other book and in fact it was only after reading Durbin’s book that I was able to make sense of the first one.
Some people try too hard to impress you with how academic their approach is. Michael Durbin doesn’t play that game. He really wants you to understand the concepts and I think that if he needed to do cartwheels to get the point across he would do it.
I wish this guy had written my calculus textbook when I took it in college; I wouldn’t have had to take it over to improve my grade.
I hope Durbin makes enough money in the derivatives game to retire and write full time. He’s quite a talent.
Rating: 5 / 5
This is an extremely well-written introduction to derivatives. I used it as a supplement to a graduate course in Risk Management which had assigned Don Chase’s classic book. I found this book to be much more readable, with less formal notation and fewer equations to wade through (not to mention being much cheaper and easier to carry around). Despite its small size, it still manages to convey the essential characteristics of the major types of derivatives (forwards, futures, swaps, options, and credit derivatives) and how they are priced, without getting bogged down in excessive theory. It’s written in a pleasant, conversational style, with (horrors!) even a dash of humor thrown in. It contains the right amount of detail and math in the main text, with a series of appendices and nicely separated subsections for the more mathematically inclined. It’s a great introductory text, and I strongly recommend it for anyone starting out in the subject.
Rating: 5 / 5
This book provides the reader with confidence throughout the book, tackling a difficult topic. It was well written, and
things were easy to understand because he made the concepts simple. Its actually the best book I’ve read on options because it explains what is going on under the hood. Im hoping he’ll write another book on another interesting topic soon!
Rating: 5 / 5
I picked up this book for two reasons. I wanted to learn what derivatives are, and I wanted to learn about the math around them. At first glance, in the bookstore, it looked like this book would meet my needs. Now, I have to say that this the first book I ever read about derivatives and have nothing to compare it against.
The first few chapters do a good job explaining what derivatives are and how they are used, though I found the chapter on swaps somewhat confusing despite reading that chapter twice. Additionally, I found the conversational nature of his writing, and the frequent drift into sidebar discussions, quite distracting. The chapters on pricing derivatives were worse.
In the pricing chapters I found the basic explanations ok, but there are a number of errors and typos that make those chapters confusing. The author also changes terminology occasionally and that is a little confusing. At one point I emailed the author in order to clear up my confusion, and he directed me to the errata list on his web site. I found I had to read the section on the Black-Scholes model backwards because the second half of that section gave me what I needed to understand the first half.
I found the explanation of the math most frustrating. The equations use symbols to mean something different than I would expect based on how those symbols are used in math and science texts. For example, he uses Greek delta to mean “amount of” instead of “change in.” Now, perhaps this is the standard usage in the financial field, but that isn’t explained very well. In many cases the author does not explain what the terms in the equations are, where their values come from, or what they are measuring. More explanation here would go a long way in helping the reader to understand the math better.
In summary, like my headline says, the book is ok, but not that great. Perhaps other books on the subject are very bad, but I would advise reviewing other texts for a bit before buying this one.
Rating: 2 / 5
I am a newbie in the world of financial mathematics and needed to learn the concepts related to derivatives. I was told to read Hull’s book, but I ended stuck in some of the early chapters because of the definitions apparently aimed at someone who already has had a background course in Finance.
Using online resources didnt help that much, and I was getting rather desparate. Then I landed on this one and all my worries are disolving away as I read this extremely helpful book.
OK there are passages where the author feels we might be terrified of mathematical formalism, but I wont hold it against him.
I am no longer stuck in a Hull.
This book is a joy.
Rating: 5 / 5